Are the Boomers cashing out? 6 6

[Westy Steve]

 Hey something to consider is that westerns persisted on television long after western movies faded out. Same is true with musicals to a lesser extent like Lawrence Welk.

 

 Another thing to consider is that whatever form of fiction the movies embraces next probably has a comic book counterpart. If they move into westerns we got western comics. If they move into sci-fi we got Syfy comics. The different genres within comics mirrors the different genres within movies. I can see Disney just changing their game but continuing to make money off of their properties. 

Edited September 6, 2017 by Westy Steve

[Rezin1234]

1 hour ago, FSF said:

Their valuable IP as far as I'm concerned is the Star Wars franchise, which is an entirely different thing from comics IMO and in the minds of many.  The entire studio division brings in less than I think 15% of their profits.  A huge chunk of that must be Star Wars.  I'm sure they'll milk Star Wars for all that its worth but I'm not sure what other IP needs protecting that has meaningful impact on their profits apart from a short term blip here and there.

 

 

I am not sure how you think 15% is a little piece of pie. That's a huge segment of their revenues. Disney's stock would take a huge hit if they are off top line by even 2%. The returns on Marvel products have been astronomical as has been Star Wars. While the first SW movie was an absolute beast and really made a difference, the Marvel features have been huge and much more frequent.

 

Look at Fox, they have lost a fortune on Fantastic Four but have continually rebooted it just to keep the rights that's how valuable it is. The movies are just 1 piece, but look at all the ancillary sales they get off the movies, from video games to costumes to toys. If you think Marvel is just another drop in the bucket you are missing the picture big time. Any top 50 company would absolutely love finding an acquisition that adds even 5% to the bottom line at a cheap cost.

 

 

[FSF]

We don't know how astronomical any of it has been.  15% is a lot but you make it sound like it's predominantly comic movies and Star Wars.  They also do a LOT of animation movies as well as every other kind.  What we do know is that it take $300-$400 million to make one these movies and market them.  Which means that it takes about $700 million plus to break even.  It's a risky proposition.  Fox may be rebooting FF but only because they see that comic movies are lucrative and the Jessica Alba franchise didn't do THAT bad as I recall.  If the comic movie scene proves itself to be less profitable or not at all, then you would see FOX throwing the FF on the shelf perhaps never again to be seen in our lifetimes.

One thing you can count on with human beings is that they have a STRONG tendency to believe that the way it is now, is what will always be.  And virtually in every case, that has proven to be folly.  It's like the mentality that Hulk 181 has gone up exponentially so that must continue right?  I'm not in that camp.  I can see a day when increases are rather tepid.  In fact, I expect the next recession with a few years to prove out that point.  We've already seen virtually all non-keys from SA to modern become substantially less.  And these books contain all of these super popular characters.  

[Mmehdy]

4 hours ago, Gatsby77 said:

Mitch!

I appreciate your post, but (clearly) disagree with the above.

We are smack dab in the middle (perhaps even at the apex) of the comic book movie bubble -- equivalent to where Hollywood was in the late '90s with "disaster movies" (a la Independence Day, Volcano, Armageddon, Deep Rising).

Once we have a few big-budget failures in a row, and audiences tire of superheroes we'll see far few fewer films greenlit and far fewer risks taken on lesser known characters.

This could start in 5 years, or 10.

But sometime in the next decade the pendulum will shift. And the (so far) 15 year-run that has fueled incredible gains in vintage superhero movie material will end.

Sure, they'll still be occasional comic book films -- as there have been basically perpetually since 1978 -- but nothing like the 3-4 major release per year that we've seen lately.

Decades from now, I believe film historians will regard comic book movies (somewhere between 2012 and 2016) as the equivalent of where westerns were in 1955-58.

The western still lives on today, but at a rate of maybe one per year.

The last good one I recall came last year -- with a modern take, as Hell or High Water.

I agree that nothing lasts forever but folks, I believe toy division is another profit center. There are a heck of lot more people, new people reading and chatting about comic characters, now that there 2 R rated comic books hits in a row (Logan/Deadpool) the market will expand. GA/SA prices are gonna adjust over time I would advise buying comic book material at a "sane" price and not get hyped up to pay 8X guide on the difference between a 9.4  and 9.2 which you can barely tell the difference on.

[Aweandlorder]

5 minutes ago, Mmehdy said:

I agree that nothing lasts forever but folks, I believe toy division...

 

[Senormac]

35 minutes ago, Mmehdy said:

5 hours ago, Gatsby77 said:

Mitch!

I appreciate your post, but (clearly) disagree with the above.

We are smack dab in the middle (perhaps even at the apex) of the comic book movie bubble -- equivalent to where Hollywood was in the late '90s with "disaster movies" (a la Independence Day, Volcano, Armageddon, Deep Rising).

Once we have a few big-budget failures in a row, and audiences tire of superheroes we'll see far few fewer films greenlit and far fewer risks taken on lesser known characters.

This could start in 5 years, or 10.

But sometime in the next decade the pendulum will shift. And the (so far) 15 year-run that has fueled incredible gains in vintage superhero movie material will end.

Sure, they'll still be occasional comic book films -- as there have been basically perpetually since 1978 -- but nothing like the 3-4 major release per year that we've seen lately.

Decades from now, I believe film historians will regard comic book movies (somewhere between 2012 and 2016) as the equivalent of where westerns were in 1955-58.

The western still lives on today, but at a rate of maybe one per year.

The last good one I recall came last year -- with a modern take, as Hell or High Water.

I agree that nothing lasts forever but folks, I believe toy division is another profit center. There are a heck of lot more people, new people reading and chatting about comic characters, now that there 2 R rated comic books hits in a row (Logan/Deadpool) the market will expand. GA/SA prices are gonna adjust over time I would advise buying comic book material at a "sane" price and not get hyped up to pay 8X guide on the difference between a 9.4  and 9.2 which you can barely tell the difference on.

Clint Eastwood has been doing westerns since the 60's and the thing about westerns is.... they almost always are about the "bad guys" getting shot up with guns at the end.   That's never going to go away.  It's part of our American culture

[Readcomix]

41 minutes ago, Senormac said:

Clint Eastwood has been doing westerns since the 60's and the thing about westerns is.... they almost always are about the "bad guys" getting shot up with guns at the end.   That's never going to go away.  It's part of our American culture

C'mon Disney! Giddy up!

[FSF]

Dilly! Dilly!

 

 

[Rezin1234]

6 hours ago, FSF said:

We don't know how astronomical any of it has been.  15% is a lot but you make it sound like it's predominantly comic movies and Star Wars.  They also do a LOT of animation movies as well as every other kind.  What we do know is that it take $300-$400 million to make one these movies and market them.  Which means that it takes about $700 million plus to break even.  It's a risky proposition.  Fox may be rebooting FF but only because they see that comic movies are lucrative and the Jessica Alba franchise didn't do THAT bad as I recall.  If the comic movie scene proves itself to be less profitable or not at all, then you would see FOX throwing the FF on the shelf perhaps never again to be seen in our lifetimes.

One thing you can count on with human beings is that they have a STRONG tendency to believe that the way it is now, is what will always be.  And virtually in every case, that has proven to be folly.  It's like the mentality that Hulk 181 has gone up exponentially so that must continue right?  I'm not in that camp.  I can see a day when increases are rather tepid.  In fact, I expect the next recession with a few years to prove out that point.  We've already seen virtually all non-keys from SA to modern become substantially less.  And these books contain all of these super popular characters.  

Astronomical can be easily determined by how the marve properties are littering the all time revenue charts. Not sure if even 1 marvel movie didn't make a huge sum of profit. You are stating the movie division is tiny at 15%. Look at the revenues of the movies, marvel is the serious player, disneys other movies can be hit or miss but I don't think anyone can say marvel movies haven't all delivered to some degree. 

I didn't state anywhere that there will continue to be growth like I wouldn't say hulk 181 is likely to continue to grow so I'm not sure where that argument came from or is even going. 

Also, maybe there too end movies cost 300-400 but Thor dark world was not $300M to make. Go to box office mojo and find other movies that cost the same as the marvel movies  based on your logic almost none are profitable (here's a hint, most are). $700 to break even? Where are these numbers even coming from? You're telling me doctor strange needed $700m to make a dime, I don't think any movie studio would green light anything with a similar budget  

 

Edited September 7, 2017 by Rezin1234

[FSF]

Revenues aren't profits.  As I stated, these movies are very expensive to make.  And it's not like the theaters air them for free just to give all the money to the studios.  That's why a common breakeven point is usually 2-3x the total costs, though it tilts closer to 2x for these types of movies.  Your comments aren't determining anything regarding being astronomical, you're just speculating.  There's no question that a lot of comic movies have grossed a lot.  But one, they cost A LOT to make and market.  And two, there are tons of other movies, like Star Wars and all of their animation movies, that are part of Disney.  And quite frankly, I would bank on the longevity of Star Wars and eternally timeless princess type movies than what are basically a fad whose tenure of popularity is much more suspect.  Here is the revenue list for their top movies of all time:

http://www.boxofficemojo.com/studio/chart/?studio=buenavista.htm&view=parent

While there are a lot of comic movies at the top, there are tons of IP assets they have that AREN'T comic related.  Only one comic movie in the Top 5, albeit there are 5 of the top 10.  But then it thins out quite a bit after that.  There's only so much saturation that can occur before these movie start to cannibalize each other, even if it were to remain as popular as it is today. 

And while this is personally anecdotal, I've watched virtually all of the comic movies and can scarcely remember the plot to any of them (even quite a few that I saw twice).  I recall with good clarity Finding Nemo (which I only saw once well over 10 years ago) or Frozen (which I didn't even like).  The comic movies are a collage of a mess to a large extent.  I can easily see a day where the entire genre dies overnight, just like disco did.

 

 

[FSF]

There are a million links out there for those who care.  I spent a quite a bit of time a couple of years back researching movie profitability.  It is difficult to get exact answers because the studios do not share this kind of information in detail. Here is an article that gives a good primer on movie costs and all that's involved and you can see the 2x there.

http://io9.gizmodo.com/5747305/how-much-money-does-a-movie-need-to-make-to-be-profitable

Dr. Strange had a reported $165M dollar budget.  On top of which they had to have spent probably at least $100M or so, if not more on advertising and promotion.  Then there is the required internal rate to consider which for a company like Disney is probably about 12%.  So you'd have to increase the costs by 12% for each year that goes by before money is recouped.  The mid point of that spend is about 18 months.  So that's $300M+ to recoup.  In Dr. Strange's case, it may have made up to about $100M before taxes.  But there are some other costs (some direct and some allocated) that will reduce that number.  Then of course, there is some extra backend with video and all but that's relative chump change.  This is how the movie industry works.  That's why the industry said if Star Wars VII didn't get $1 billion in gross, it would have to be considered a flop.

[Rezin1234]

14 hours ago, FSF said:

There are a million links out there for those who care.  I spent a quite a bit of time a couple of years back researching movie profitability.  It is difficult to get exact answers because the studios do not share this kind of information in detail. Here is an article that gives a good primer on movie costs and all that's involved and you can see the 2x there.

http://io9.gizmodo.com/5747305/how-much-money-does-a-movie-need-to-make-to-be-profitable

Dr. Strange had a reported $165M dollar budget.  On top of which they had to have spent probably at least $100M or so, if not more on advertising and promotion.  Then there is the required internal rate to consider which for a company like Disney is probably about 12%.  So you'd have to increase the costs by 12% for each year that goes by before money is recouped.  The mid point of that spend is about 18 months.  So that's $300M+ to recoup.  In Dr. Strange's case, it may have made up to about $100M before taxes.  But there are some other costs (some direct and some allocated) that will reduce that number.  Then of course, there is some extra backend with video and all but that's relative chump change.  This is how the movie industry works.  That's why the industry said if Star Wars VII didn't get $1 billion in gross, it would have to be considered a flop.

You do know internal rate is the amount of profit a company sets as the bar of profitability. It isn't a cost. Basically if I spend $100M I want 12% ROR which means I need $112M to hit my goal. The $12M isn't a cost but my hoped profit.

 

Here is the calculation from deadline on Dr Strange

 

"Kevin Feige’s Marvel just doesn’t miss when it launches franchises, even the ones that focus on secondary characters. This was a big swing at a $165 million budget, which was $30 million more than Ant-Man. It crushed the competition early last November with an $85 million domestic opening weekend that was fueled by strong reviews. Doctor Strange grossed $232 million domestic and $335 million foreign, with another $109 from China for a total of $677 million. Factor in about $38 million in Participations and Off-the-Tops, and that leaves Marvel’s parent company Disney with a net profit line of $122 million, and a Cash on Cash Return of 1.3. A nice welcome to the Marvel family for Doctor Strange, with a sequel and appearances in the upcoming sequels to The Avengers already in the offing."

 

This is before all other income from selling rights to netlfix and tv channels (which is more than chump change) and is all pure additional profit. End of the day total profit was through the roof for one of the lesser known Marvel titles.

 

And taxes? why is this even relevant, all income is subject to tax. This is why analysts look at EBITDA.

 

This is how the business world works and Marvel products have been the closest thing to guaranteed profits this side of Harry Potter.

[FSF]

I realize that IRR isn't a cash out but any project has to meet that thresshold as a return to achieve.  However, in a lot of cases, there are debt leveraged companies that actually pay interest to fund projects so it would be a cash out of some amount.

And no one suggested that Marvel movies haven't been wildly successful.  We all know they have.  This is about what the future may bring and the bar is higher and higher to make an impact.  The passage you quote doesn't at all detail exactly how those numbers are derived so we can't know for sure what costs have or haven't been included, though I assume there were plenty of profits to be made which I never stated otherwise.  Would it really shock anyone if the budget for the next one or a final third or whatever winds up with a budget of $250M and more s&m and grosses only $600M (an impressive revenue number to the vast majority of lay people going to these movies), but one which will ultimate result in millions in losses?

I mentioned taxes because the net profit number is what ultimately is made.  Companies don't keep taxes so one always has to look at the BOTTOM line and know exactly what is in it for them.  As for EBITDA, that is a Wall Street concoction to peddle overvalued equities in an effort to pretend that companies are making more than they actually are.  If EBITDA is what's so important, why does the SEC require income statements to be submitted on a net income basis???

 

 

 

 

[Von Cichlid]

22 hours ago, FSF said:

Revenues aren't profits.  As I stated, these movies are very expensive to make.  And it's not like the theaters air them for free just to give all the money to the studios.  That's why a common breakeven point is usually 2-3x the total costs, though it tilts closer to 2x for these types of movies.  Your comments aren't determining anything regarding being astronomical, you're just speculating.  There's no question that a lot of comic movies have grossed a lot.  But one, they cost A LOT to make and market.  And two, there are tons of other movies, like Star Wars and all of their animation movies, that are part of Disney.  And quite frankly, I would bank on the longevity of Star Wars and eternally timeless princess type movies than what are basically a fad whose tenure of popularity is much more suspect.  Here is the revenue list for their top movies of all time:

http://www.boxofficemojo.com/studio/chart/?studio=buenavista.htm&view=parent

While there are a lot of comic movies at the top, there are tons of IP assets they have that AREN'T comic related.  Only one comic movie in the Top 5, albeit there are 5 of the top 10.  But then it thins out quite a bit after that.  There's only so much saturation that can occur before these movie start to cannibalize each other, even if it were to remain as popular as it is today. 

And while this is personally anecdotal, I've watched virtually all of the comic movies and can scarcely remember the plot to any of them (even quite a few that I saw twice).  I recall with good clarity Finding Nemo (which I only saw once well over 10 years ago) or Frozen (which I didn't even like).  The comic movies are a collage of a mess to a large extent.  I can easily see a day where the entire genre dies overnight, just like disco did.

 

 

So you are saying that production companies pay theaters to air their movies?  I was always under the impression that theaters pay the movie makers for the privilege of airing their movie.  

Think about it.  If a theater doesn't have any movies to show, who would go to that theater?  It seems to me the theater should be the ones doing the paying.

 

Edit:  I just looked it up.  Production companies lease the movie to a theater.  In return, a theater gets to keep a small percentage of the ticket sales.  So, a production company never puts any money up front for a theater to air their movie.  But, as you said, the theater is certainly not airing the movie for free, it is just that in this scenario, only the theater has the chance of losing money.  The worst that can happen to the production company is that they don't make any money on their investment.

Edited September 8, 2017 by Von Cichlid
I googled some data.

[The-Collector]

On 8/26/2017 at 11:10 AM, JollyComics said:

Interesting thread and theory.  CGC graded over 4 million comic books. Digital comic books are coming. The future generations will become environmentalists so the printed comic books may be extinct soon.  Do you really think the comic books become worthless except rare/mega key comic books?  Like currencies?   Hollywood rarely did a good job to produce the movies since 1992. We have experienced vibes in IH 181 and ASM 129 twice before the prices settled down. Everything is in digital that may put CGC out of the business. The last year of the Baby Boomer generation is 1964 when I born.  I think it will be good for 10-15 more years. Maybe the comic collections may be passed over to other generations. Comic Cons are not excited anymore. Who knows?  I hope Sgt Rock and Haunted Tank get a deserve to be in movies.

'Digital comic books are coming.'??? Digital comic books are well and truly here. 

[JollyComics]

1 hour ago, The-Collector said:

'Digital comic books are coming.'??? Digital comic books are well and truly here. 

Yes, I have a feeling. The digital will replace everything soon. The printing era may be over soon - maybe scarce.

[FSF]

5 hours ago, Von Cichlid said:

So you are saying that production companies pay theaters to air their movies?  I was always under the impression that theaters pay the movie makers for the privilege of airing their movie.  

Think about it.  If a theater doesn't have any movies to show, who would go to that theater?  It seems to me the theater should be the ones doing the paying.

 

Edit:  I just looked it up.  Production companies lease the movie to a theater.  In return, a theater gets to keep a small percentage of the ticket sales.  So, a production company never puts any money up front for a theater to air their movie.  But, as you said, the theater is certainly not airing the movie for free, it is just that in this scenario, only the theater has the chance of losing money.  The worst that can happen to the production company is that they don't make any money on their investment.

I'm not exactly sure what you're saying but I was not implying that the studios pay the movie theaters.  While it may have been expressed better, the implication is that the theaters get the money and have to remit a certain percentage to the studios.  How much that is varies but usually, the studios get 50-60% for the domestic gross and around 40% for foreign, or roughly half the world wide gross, usually a little less than that, especially with foreign sales becoming a bigger and bigger piece of the pie.

But what I really don't understand is your comment, "only the theater has the chance of losing money.  The worst that can happen to the production company is that they don't make any money on their investment."

If a studio puts up $200M to produce a film, plus another $150M to market and promote that film, that is $350M they have to recoup.  That's before the time value of money is even considered, which is where the IRR comes into play but lets keep it simple.  If the film grosses $500M (which sound like a lot and as you suggest goes to the theaters first, the studio ultimately gets about $250M of that $500M gross).  Hence, the studio would lose $100M.  So how is it that the studio can't lose money? 

All of this is even before the allocation of overhead, which has to be considered in any NPV analysis of a movie project.  And then there are costs for developing movies that get scrapped before ever being made or issued, which has to be recouped as well though we could just consider that as another component of overhead.

[Von Cichlid]

15 hours ago, FSF said:

I'm not exactly sure what you're saying but I was not implying that the studios pay the movie theaters.  While it may have been expressed better, the implication is that the theaters get the money and have to remit a certain percentage to the studios.  How much that is varies but usually, the studios get 50-60% for the domestic gross and around 40% for foreign, or roughly half the world wide gross, usually a little less than that, especially with foreign sales becoming a bigger and bigger piece of the pie.

But what I really don't understand is your comment, "only the theater has the chance of losing money.  The worst that can happen to the production company is that they don't make any money on their investment."

If a studio puts up $200M to produce a film, plus another $150M to market and promote that film, that is $350M they have to recoup.  That's before the time value of money is even considered, which is where the IRR comes into play but lets keep it simple.  If the film grosses $500M (which sound like a lot and as you suggest goes to the theaters first, the studio ultimately gets about $250M of that $500M gross).  Hence, the studio would lose $100M.  So how is it that the studio can't lose money? 

All of this is even before the allocation of overhead, which has to be considered in any NPV analysis of a movie project.  And then there are costs for developing movies that get scrapped before ever being made or issued, which has to be recouped as well though we could just consider that as another component of overhead.

Sorry, it was late at night and I was rambling.  What I meant was is that only the theater stands to lose money in the transaction between the production company and the theater.  The production company's investment in the film and the need to recoup that money was outside of the theater-production company relationship in my mind.   

[FSF]

7 hours ago, Von Cichlid said:

Sorry, it was late at night and I was rambling.  What I meant was is that only the theater stands to lose money in the transaction between the production company and the theater.  The production company's investment in the film and the need to recoup that money was outside of the theater-production company relationship in my mind.   

The"lease" agreement betwen the studio or distributor and the theaters is not a standard "lease" as most of us think of it.  It is a variable contingent one in which a certain percent of the gross ticket sales get remitted.  The first week is usually like 80 percent to the studios, the second week like 60 percent and on and on until the theater keeps the majority with each passing week.  That's for domestic sales.  International usually works thru distribution through each country but the end result is about 40 percent of the take.

The overall point is that a movie that may take in $600 to 700 million is teetering pretty close to break even more than one would think depending on how much the production and marketing budgets are, which appear to be exceeding $300 million regularly.

[N/A]

Wow do these new boards suck.  When a comic is worth more than I paid I sell. Simple as that. Only 3 runs left but unless Princess Amethyst becomes a hit series I will always have one run.