Consumers can easily watch movies on their favorite streaming devices or visit the nearby library. While it’s easy to turn on a flick, a lot of effort goes into producing a movie. Teams gather to create a plot, decide on actors, and identify good locations and scene setups.
A lot of planning goes into producing a movie, but all of that planning doesn’t guarantee success. Sure, there have been major blockbusters that grossed over $1 billion for studios. However, the movie industry has also seen several flops, including films that lost over $100 million for studios.
While great movies can teach valuable life lessons, the planning and production of these projects can shed light on the best practices of
money management and mistakes to avoid.
The Top Grossing Movies
1. Avatar
Cost: $387 million
Gross: +$2.9 billion
Avatar has been on top of the list for over a decade. The instant hit was released in 2009 and raked in $2.9 billion at the box office. The production budget was $237 million, but production budgets don’t tell the entire story. 20th Century Studios spent $150 million promoting the movie to get people excited about the movie. In total, it cost $387 million to produce and market a movie that made over $2.9 billion.
Although $387 is a significant investment, it paid off with over two billion dollars in profit. Sometimes you have to invest in yourself to generate a higher return. You don’t have to start with $387 million, but reading books and watching educational videos can make a difference.
2. Avengers: Endgame
Cost: $556 million
Gross: $2.798 billion
Endgame was a cultural phenomenon when it came out in 2019. Iron Man 1 launched the saga in 2008, and each movie seemed to build on to the next. It’s telling that storylines from the Marvel Cinematic Universe have four placements in the Top 10 and two additional movies in the Top 15 of the highest-grossing movies of all time.
Gross revenue doesn’t indicate if a movie profited, but Endgame brought in a major haul. Endgame grossed nearly $2.8 billion, barely getting edged out by Avatar for the top spot. The star-studded lineup of actors, CGI elements, and other details contributed to a $356 million production cost. Add an estimated $200 million for marketing costs, which equals $556 million.
Even though Avengers: Infinity War was a smashing success that built hype for End Game, Marvel Studios still felt the need to spend approximately $200 million on marketing. It shows that businesses should continue promoting themselves and trying to reach new audiences even if they have figured it out.
Endgame has been tough to follow, and many Marvel movies have flopped, prompting delays and production cuts for the MCU’s Phase 5 projects. A string of massive success does not guarantee infinite success, but Endgame is the culmination of over a decade’s worth of stories that provided Disney with over $2 billion in profits.
3. Avatar: The Way of Water
Cost: $460 million
Gross: +$2.315 billion
Brand recognition is an important force and helped Avatar: The Way of Water exceed $2.3 billion in gross revenue. With Disney at the helm, over $460 million went into production and marketing, again netting a profit exceeding $1 billion. The movie has mixed reviews, but most people agree that the visuals are stunning.
Avatar: The Way of Water is one of the entries on this list that demonstrates nostalgia’s pull on audiences. If something works well for your business or finances, why not keep doing what works? Reintroducing old characters with new storylines can give people more reasons to watch new releases. Many top-grossing movies are reboots from iconic storylines with large followings across decades. However, not all movies follow this pattern.
4. Titanic
Cost: +$400 million
Gross: $2.254 billion
Unlike most entries on the top-grossing movies of all time, Titanic is a standalone film with no prequel to build excitement. 20th Century Studios spent over $400 million on production and marketing, but the investment was worth it. Titanic grossed $2.2 billion and netted a hefty profit in the process.
While the tragic movie had a happy ending for the studio’s bottom line, it’s clear that this was a risky gamble. During an LA Times interview, Bill Mechanic, former chairman of 20th Century Fox, stated, "It’s not a good business proposition to be in the $200-million or $150-million movie business — it’s uneconomic.”
Titanic paid off, but not all projects record profits. Some of those losses can force studios to make cuts on other productions. Trends in the movie industry suggest that bloated budgets are here to stay.
5. Star Wars: Episode VII — The Force Awakens
Cost: +$533 million
Gross: +$2.0 billion
Star Wars Episode VII started off innocently enough, capitalizing on its predecessors to capture a little over $2.0 billion at the box office. The Star Wars franchise has built a fanbase for decades since the 1978 release of Star Wars: A New Hope. The Force Awakens had a noticeably strong domestic release. Domestic revenue accounted for 45.2% of the gross revenue, while other movies on this list generated approximately 30% of their revenue domestically. Total costs for the movie came to $533.2 million after including production and marketing.
The movie was profitable for Disney and marked a good beginning to the Lucasfilm acquisition. While other Star Wars entries yielded profits, gross revenue declined for Episodes VIII and IX and angered the fans. Some fans petitioned for an Episode VIII remake after not being satisfied with how the movie presented past characters and the overall storyline.
Revisiting old franchises can tap into nostalgia, but a brand name alone does not ensure long-term success. Just three years after The Force Awakens, the movie Solo: A Star Wars Story became the first Star Wars movie to flop at the box office and lose money. The follow-up to The Force Awakens, The Last Jedi, had lower gross revenue than its predecessor. Episode IX: The Rise of Skywalker had lower gross revenue than Episode VIII: The Last Jedi. Disney opted for a smaller production budget for The Rise of Skywalker than The Last Jedi.
The Biggest Office Flops
1. John Carter
Cost: $250 million
Gross: +$284 million
Loss: $200 million
John Carter was released in 2012 based on a popular sci-fi novel, but the project lost over $200 million. The movie had an expansive $250 million production budget and $100 million in marketing. The movie grossed $284 million at the box office, but additional expenses allowed Disney to write off a $200 million loss when it was all said and done.
Disney has historically released many hits, but even one of the best in the business is vulnerable to box office flops. The movie performed well in Russia but didn’t gain as much traction at the domestic box office. Disney initially planned sequels to this movie, anticipating a good reception. However, those sequels got axed as Disney came to grips with its big loss.
2. The Lone Ranger
Cost: $215 million
Gross: $260 million
Loss: $190 million
The Lone Ranger is a Western movie that didn’t perform as hoped at the box office. The project grossed $260.5 million, which wasn’t enough to cover roughly $250 million in production costs and $150 million in marketing costs.
Disney released movies like Iron Man 3 and Monsters University, demonstrating the value of diversifying your projects. Those two movies helped their profits, but The Lone Ranger lost $190 million for the media giant. The movie highlights the dangers of a big budget film, a commonality in today’s industry. Higher budgets and increased risk may explain why many movie makers focus on reboots for popular classics to varying success. Once it became apparent The Lone Ranger was going to flop, Disney’s Executive VP of World Distribution Dave Hollis remarked, “Everything was perfect on paper, so today was incredibly frustrating.”
Johnny Depp was a star actor in the movie with international acclaim, but even a big name like him didn’t bring enough people to the seats to break even. People watch movies for their stories, and star actors can be great bonuses when the storytelling is done properly. Not enough people were drawn to The Lone Ranger for the studio for it to perform well at the box office. Internal battles and a temporary suspension of production due to the poor performance of Cowboys & Aliens also contributed to the project’s lackluster performance. Although The Lone Ranger is based on an iconic radio show, younger audiences couldn’t connect to nostalgia and didn’t feel attracted to watch the movie. A violent beginning to the movie also drew criticism and discouraged people from seeing it in theaters.
3. The Marvels
Cost: $270 million
Earnings: $206 million
Loss: $237 million
Riding high on the heels of Avengers' success, Disney went in big with The Marvels, which debuted in 2023. The sequel to the successful Captain Marvel, the film again starred Brie Larson as Captain Marvel began development not long after its 2019 debut. It premiered in November 2023 after years delayed by Covid.
The lowest-grossing movie in the Marvel Comic Universe franchise, it was reported it needed to earn $700 million to return a profit. Some attributed it to superhero fatigue, but others blame Disney's overexposure to Marvel content.
4. Mortal Engines
Cost: $100 million
Earnings: $84 million
Loss: $175 million
Mortal Engines was released in 2018 and is one of the more recent releases on this list. This movie had a lower budget than most of this list. The production budget was barely over $100 million, and the studio spent tens of millions on marketing. Despite the smaller budget, the studio didn’t break even, as the project only yielded $83.7 million at the box office, making it a $175 million loss.
Smaller budgets theoretically make it easier for studios to release profitable projects. However, spending less on a project won’t do much good if it does not draw people to the movie theater. Spending more money on production and marketing is sometimes necessary, but other movies on this list demonstrate that throwing money at a problem doesn’t make it go away. Sometimes, throwing money at a problem can make it worse.
5. Cutthroat Island
Cost: $98 million
Earnings: $18.3 million
Loss: $210 million
Geena Davis was at the top of her game in 1995 when her director husband Renny Harlin debuted his swashbuckler movie that also starred Matthew Modine. But from the moment filming began, rumors of rewrites and recasts were circling the production like sharks circling a lifeboat. One notable recast was Modine, who was pulled in to play the role originally given to Michael Douglas.
Modine wasn't the second choice either. Bigger names like Cruise, Reeves, Crowe, Neeson, Fiennes, Sheen, Day-Lewis, and others turned down the part. Critics found no chemistry between Modine and Davis, and the movie did so poorly that Guinness World Records called it the biggest box-office bomb of all time.
The bottom line
When moviegoers watch films, they focus on the story, characters, and other plot points. These details ultimately get people into theaters and make them eager to discuss the movie with friends. Behind the scenes, studios carefully plan out movie releases, budgets, marketing, and other logistics to increase the likelihood of generating profits. Blockbusters like Avatar and movie flops like John Carter demonstrate the varying results studios have at the box office.