“How many movies recoup their investment?”

You hear me and others quote the Broadway recoupment stats all the time:  4 out of 5 shows never make their money back (it sounds like a Trident commercial, doesn’t it?  “4 out of 5 dentists surveyed . . . “).

An inquisitive reader whom I’ll call Joseph, because that’s his name, wrote in over the weekend and asked, “How much better off are movie investors than Broadway investors?”
A good question that I was disappointed that I didn’t have the answer to . . . so I got on my google and did some research.
I found this interesting Freakonomics blog, written not too long ago, that featured a Q&A with the President of the Motion Picture Association of America, Dan Glickman.  In it, he talks about the increasing price of movie tickets (sound familiar?) as well as why he thinks movies do well in times like these (buzz word alert:  “staycation”).
He also says this about recoupment stats in the film industry:

Movie making is inherently a risky business.  Last year, the average cost to make and market a studio film was over $100 million.  Contrary to the perception you might get if you just read the headlines about the big summer blockbusters, 6 out of 10 movies never recoup their original investments in their domestic runs.

Well there you have it, curious Joe who’s not from Hannibal, Mo.   Movies have a 60% failure to recoup rate in their domestic runs.  
(It must be stated, however, that looking at a movie’s domestic run is a bit like looking solely at a show’s Broadway’s run (like our “Will It Recoup” rules), and not accounting for any subsidiary income, etc.  The rub is that a movie’s post-domestic run can be much more rewarding than a show’s life post-Broadway, thanks to the number of places available for distribution and the cost of that distribution compared to the potential income.)
While I’m glad Joe got me digging for this stat, the most important bit of info I learned from his question was not how many movies fail to recoup.  No, no . . . the most interesting thing to me was that both Broadway and Hollywood constantly refer to their recoupment rates in failing terms!  

“4 out of 5 shows never make their money back . . .”

“6 out of 10 movies never recoup . . . “

Depressing, right?
Well, I’m changing my semantic tune, and accentuating the positive from now on.  A 20% success rate may not be much to shout about, but it’s better than the 10% success rate associated with drilling for oil, and that hasn’t stopped people from digging . . . and 20% won’t stop us from producing, will it?  I didn’t think so.
So from now on, you have permission to e-slap me if you catch me using any of the above negative phrases in the future.  And I promise to do the same to you. Deal?
From now on it’s 1 out of 5 shows recoup their investment, or 2 out of 10 pay profit!
Unless, of course, you’re involved with one of my shows . . . and then the ratio is a lot higher. 😉

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Ken created one of the first Broadway podcasts, recording over 250 episodes over 7 years. It features interviews with A-listers in the theater about how they “made it”, including 2 Pulitzer Prize Winners, 7 Academy Award Winners and 76 Tony Award winners. Notable guests include Pasek & Paul, Kenny Leon, Lynn Ahrens and more.