Hollywood’s Biggest Bang for Its Buck

By CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

Earlier this week Forbes had an article on the return on investment on this summer’s films, noting that some have still not collected box office grosses that exceed their original production budgets. “R.I.P.D.,” for example, cost $130 million to make, but has earned shy of $50 million at the global box office, according to Box Office Mojo.

The horror movie “The Purge,” on the other hand, cost $3 million to make and has grossed nearly $80 million worldwide. That’s a box office return more than 26 times the original cost. The Forbes article then observed that “Horror films are definitely Hollywood’s best bet in terms of turning a profit.”

So I decided to look at the data to see if that is usually true.

I figured it was too soon to calculate the box office R.O.I. for a lot of 2013 films, since they may still be running in theaters, so I pulled data on movies from 2003 to 2012 that grossed at least $2 million domestically. I then sorted them by genre. Here’s what I found:

Data shown refer to films with at least $2 million in domestic box office grosses. Most data comes from OpusData, with some select entries from Box Office Mojo.

The average movie earned 452 percent of its original production budget in global box office revenues, or about 4.5 times the budget.

The genre with the biggest box office R.O.I. was actually documentary, with domestic box office returns averaging 12 times the original production budget, and global returns at nearly 27 times the original budget. Of course, documentaries are generally much cheaper to make than other genres, averaging about $2.6 million in production budget versus $95 million for action films (unadjusted for inflation). So it makes sense that for the small subset of documentaries that do well (remember, these averages include only those films with domestic grosses above $2 million), the R.O.I. can be enormous.

Horror films did second best, earning on average six times their budgets when you look just at American box office returns, and about 12 times their budgets worldwide.

Some caveats: Remember that these are just box office returns (not all of which go back to the studio). Films have other revenue streams (including DVD sales, television rights, licensing for games, etc.) that have become more important over time.

And these R.O.I.’s are ratios, not raw dollar figures; documentaries may make a lot of money relative to their initial budgets, but the average nominal global box office for the documentaries in my sample is $24 million, compared to more than $200 million for action movies.

Finally, note also that some of the sample sizes are small, both because there were not many films in a given genre made over the last decade that made more than $2 million domestically (e.g., in the concert/performance genre), and because in some cases the production budgets are not made public. This appears to happen especially frequently for documentaries, unfortunately.

Here’s a table showing the count of films in each genre, and then then count of films in a given genre for which I was able to obtain production budget information.

Genre	Total films in genre	Total films in genre that I have budgets for
Documentary	78	23
Horror	129	113
Concert/Performance	8	6
Drama	488	357
Comedy	466	373
Thriller/Suspense	206	170
Romantic Comedy	122	88
Black Comedy	14	11
Musical	21	19
Western	10	10
Adventure	197	176
Action	221	190
All genres	1960	1536