Stephen Follows on Windows and how Hollywood makes money

I’ve been following Stephen Follow’s writings on film data for the past couple of years, and he’s doing a stellar job. He recently published this excellent long-read on How Hollywood makes money (or whether if they do) on Blockbusters. It’s a fascinating read, and he breaks down everything you could possibly want to know, from budgeting to production, marketing to windows, and everything else. He promises to write one soon about other types of films, indies, etc. but while a lot of this is particular to Hollywood Blockbusters a lot of it is useful for indie filmmakers as well.

In particular, I think no one has done a better job at defining release windows for films. Here’s a nifty chart Stephen made:

Windowing via Stephen Follows

Over at the article, he breaks down how each of these work, and how the revenue comes back to the studios. It’s pretty much true for indies, albeit with smaller numbers.

He also debunks a myth I’ve often believed about marketing costs. Here’s the graph and relevant points:

Via Stephen Follows

It is often claimed that marketing a Hollywood movie can cost up to twice of the cost of the film’s budget, however from the numbers above we can see that this is untrue. Across my dataset of $100m+ movies, the average budget was $150.6 million and the average combined marketing spend was $121.1 million (i.e. 81% of the budget).  

When expressed as a percentage of the total costs involved with making and selling a movie, marketing accounts for an average of 29% of costs.  Across my dataset, the largest proportion of total costs going towards marketing was 40% and the lowest was 24%.

With both P&A and Marketing all together, it remains close to  the same as the production budget. This is something indie filmmakers need to realize as well  – you need to spend almost as much on marketing and you do on making your film.

There’s a great need for more transparency around the numbers in film. I’ve helped Sundance on this with the Transparency Project a bit, but more work needs to be done, and Stephen is doing a great job. Read the whole article here.

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