How the Film Industry Makes Money Revealed

Filming Mad Max took only $300, 000 and ended up making more than $100 million. 1999’s The Blair Witch Project took $20, 000, but made more than $250 million. As if that isn’t enough, many actors including Clint Eastwood, Tom Hanks continue to earn their fame as the top richest actors of all times. The truth of the matter is, there is more money in the film industry than can be imagined.

The question is, how can a newly released movie bring such millions? What strategies does the music industry use to earn so much money?

Here is how:

  1. Tickets

If you are a movie fanatic, it is likely you are planning to buy a ticket a newly released movie that will show in your local cinema. And even if you are not a fan, you can’t reject a free ticket. If you go to a studio during a weekend, you will find a long queue of movie fanatics with money on their hands waiting to get their tickets.

According to some statistics published by THR, studios sold up to 1.34 billion tickets in 2013 alone. During that year, the price of a movie ticket was $8.13, meaning, tickets alone, earned the film industry up to $10.9 billion. Even before these movies cross the border into other countries, the movie industry in the US would have made more money to keep it going.

  1. Promotion

If you are a Star Wars fanatic, it is likely you have some toy representing a character from the movie. Sources say that in the year 1977, Star Wars made up to $12 billion from toy licensing. Despite how popular the movie became after the first release, Star Wars movies was only able to fetch up to $4 billion which is far behind from what they got from star wars toy licensing. The point is movies, especially those that feature unique characters, earn a lot from Merchandising apart from what they get from tickets and more. If you have some doubts, visit Disney Toy Store and see what I mean.

  1. Video On Demand

In the previous years, people were more interested in DVDs and more. Now it is all about VOD streaming and television rights. Many producers see VOD as a way of getting more money because it is the fastest way to reach their targeted audience across the globe. It is also profitable compared to selling tickets and foreign sales because it doesn’t require investment in marketing and other costs.

The funny thing is, even after the movie has been shown in theaters and has lost taste, people will still want to see it on television screens. I bet you’ve watched some movie that was released some years back on your TV. Most probably, it has been repeated, and you’ve never got bored of it. While VOD might take some time to earn the movie industry billions, it will continue bringing in some money even if it is five years after its release.

  1. International sales

Movies unlike many products, don’t take a lot of time to cross the border. Immediately, it is released it will be showing in all cinemas across the globe. What happens is that the movie industry after a release of a new movie, they will sell distribution rights to foreign countries so as to cover their budget.

Doing this exposes them to crimes such as piracy and more, but they still get a lot of money from it. Probably, if they would have their agents in foreign countries to distribute these movies, they would have earned twice or more than what they get from ticket selling.

Other ways movie industries make money

  • DVD sales – While the market of DVD has gone down, people still have their DVD players and would want to watch their movies. Apparently, this won’t earn the movie industry billions like Merchandising and the rest, but it still brings in some millions. For example, Hunger Games alone was able to fetch more than 3 million from DVD sales the first week of its release.
  • Video games and Novels – Probably, you have heard, seen or played games such as Mortal Combat, Spider-Man and more. I also guess you’ve read, heard about or seen novels that are created based on a movie such as Boxtrolls and more. Video games and Novels sell more than you think. And according to some sources, the video game industry makes almost the same money a movie industry makes. So, you know what the movie will earn if it was benefiting from what the game gets from its sales.
  • Airlines – A film is always shown in airlines after a theater window as well as services such as Pay Per View in 5-star hotels. To access this theater window, you have to pay tens of dollars that more often go up to $500 for every movie rental that goes for 24 hours. If you have the money and you need to see a particular movie, you can’t miss this chance.

The bottom line

As you have seen, movie sales alone can’t bring in all those billions that will turn a local celebrity to one of the richest people on the planet. What happens is, there are many ways the movie industry gets money. Even after the film has appeared on Theatres, people will want to watch, and that is why we have the Video on Demand and the rest. If you are planning to invest in movie industry, remember, you are not limited to foreign sales, tickets and more. If you are inspired to be a movie star, check out – Old School New Body user review. It is a great way to gain confidence. You will be ready for casting time and time again!