Why Box Office “Success” Doesn’t Mean Profit

Wait, Do Films Actually Make Money?

Recently, I read an article that described acclaimed film Hamnet as a runaway success. In some aspects, this is correct. After all, eight Oscar nominations is nothing to sniff at. When I saw it at Vue – along with about half the middle-aged women of Norfolk – I was not the only one in floods of tears. What I held issue with was it’s describing Hamnet, more specifically, as a commercial success. As I will describe later, a film simply earning more than its budget does not necessarily balance the books.

Films are notoriously difficult to make. During principle photography (when the bulk of filming takes place), crews are large and there is always the possibility of something going wrong, meaning that reshoots can drag for months afterwards. This is without accounting for the steep costs of pre and post-production. All-in-all, this can lead to film production being lengthy and incredibly expensive. For context, the top ten grossing films of 2025 had an average budget of around $170 million, and the Best Picture nominees at this year’s Oscars (where budgets are often lower due to the Academy’s preference against blockbusters) averaged around $86 million, though this was heavily brought down by this year’s foreign-language nominees.

This means that films need to make a lot of money just to break even. And no, they don’t just have to cover the announced budget to achieve this, they have to do much more. This can be done in multiple ways, with the traditional method being the theatrical box office (ie: revenue from ticket sales), but other revenue streams can include physical release (eg: DVDs) and licensed products (I think to the plethora of Wicked-branded merchandise that I have not been able to escape since the end of 2024). With the rise of digital streaming, many platforms are focusing on releasing their own films so as to attract more subscribers.

However, when accounting just for box office revenue in covering budgets, there are two main factors that prevent a neat revenue equals costs equation being used. One is that the production companies do not receive the entirety of box office revenue. Chunks are split between many parties, including the cinemas, distribution companies, studios, and producers. This can also include directing and lead acting talent, which is partly why straight-to-streaming films frequently have above-average budgets for similar cinema-released movies, as those that would have previously taken royalties are paid a higher up-front salary. As a result, cinema-released films have to make enough money for studios and the distribution companies to make their budgets back.

The second is that marketing budgets are often not included in the main film budget. This is due to the nature of film distribution, which is often done by a separate company than the one that produced the film. Film production companies cover the budget that is publicly listed while distribution companies cover marketing and promotion costs, which are often not publicly listed. For example, my favourite terrible film, The Mortal Instruments: City of Bones, had a budget of around $60 million and made $95 million at the box office. Was it a financial success? Absolutely not, due in part that an additional $60 million was spent on overseas advertising. It did not even break in. For those that have seen it, that is probably a blessing. I don’t think I could have coped with a sequel.

This brings us back to Hamnet. With a budget estimated to be between $30 and $35 million, it has pulled in $44 million. Likely, this amount will have been insufficient to return production and distributors budgets, though it is still in cinemas in some countries and revenue from lending to streaming services towards the Oscars build-up may generate enough.

After all this, it comes to question: what are the consequences of films losing money? For small to mid-budget films like Hamnet, costs will likely be absorbed and still be seen as a worthy investment due to the awards-season prestige which in turn can bring a boost to earnings (though, it has been statistically proven for the most part that having previous Oscar winners as actors or directors has little consequence to a film’s earnings).

However, for the blockbusters that bomb, they can result in studios losing millions of dollars (unless they are a made-for-streaming film that wants a limited cinema release to qualify for awards season). Recent examples include 2024’s Furiosa: a Mad Max Saga and 2025’s Snow White, which lost around $120 million and $115 million respectively. Box office bombs of this scale have widely-felt impacts. Starring actors and directors may struggle to find work following, as they have failed to prove their bankability. Studios may cut staff, which in the precarious labour market of the film industry can be disastrous for careers and livelihoods, and cancel future projects (see City of Bones’ cancelled sequel).

Large losses can also limit experimentation by studios, who have increasingly in the last twenty years been putting their money behind existing intellectual properties, because they are seen to have proven bankability. For the highest grossing films of last year, nine of the top ten were adaptations or sequels. In 1995, it was six; in 2005, it was seven; by 2015, it was nine, meeting 2025 levels. While adaptations, reboots, and (more recently) sequels are Hollywood mainstays, they now dominate box office pulls more than ever before. Playing this safe may make money, but the impact on wider culture by narrowing experimentation can be nothing but disastrous for modern popular culture, and will likely harm studios fiscally in the long-run. Disney has already been seeing the harm of this in recent years with their Marvel franchise, with many recent additions failing to pull in audiences.

This poses a problem; more experimental projects are more likely to create losses in the short-run, but relying heavily on existing properties create echo chambers that people eventually grow tired of. It is evident that the current model of the film industry is not conducive to creativity or reliable profits, and seem to see a plan. However, by taking risks with their productions, I have faith that while some may fail, others will break through to make up for those, resulting in losses being absorbed and fresh waves of creativity. That being said, I am but an opinionated student has absolutely no experience in the industry and loves nothing more than to speak nonsense, so I would take everything I say with truckloads of salt. Whatever your opinion, I would recommend watching Hamnet. It may be an adaptation, but it is unlike any film I have seen in years like any film I have seen in years.