Sequel Budgets and Revenues

May 13, 2018

I was curious to see the correlations of franchise budgets and revenues over time so I threw together graphs for three of the big ones: Star Wars, Harry Potter, and Lord of the Rings. More detailed observations are below, but my overwhelming takeaway is that if you're a movie executive and someone suggests making a sequel for an already successful franchise, just say yes. Note that all dollar values are given in 2018 dollars. 


Star Wars
There are a number of interesting things going on in this graph. First, you can see that A New Hope did just spectacularly well and had results that were not replicable in any sequel. Second, notice that each time the series was brought back, the first reboot did better than those immediately following -- Episode I did better than II and III and Episode VII did better than Rogue one and VIII. Also note that initial reboots (Episode I and VII) each had higher budgets than those immediately following ($173 million and $324 million respectively).

Harry Potter
What jumps out to me in this graph is the fact that the budget for Half-blood Prince so much higher than that of the rest of the movies in the Harry Potter franchise. Equally interesting is the fact that the budget for each of the two Deathly Hollows is exactly half that of the Half-blood Prince. Apparently the movie executives assigned the same budget to the final two books in the series and then decided to split the final film into two parts to eek it out a little longer. Like the suckers that we are, we all went to see Deathly Hollows, making it the most profitable and the highest grossing of all of the Harry Potter movies when really--if movie quality is correlated with budget--we should have all been lining up to see Half-blood Prince. 


The Lord of the Rings (and the Hobbit)

Unlike Star Wars that started out with a bang and then just did super well after that, The Lord of the Rings just gained momentum (that is, until we get to the Hobbit series). What's really interesting here is the budget Peter Jackson was able to demand for the Hobbit. There is no reason why he needed a budget almost double that of each of the Lord of the Rings movies, but the LOTR movies each made such a phenomenal return on investment (~8-12X returns) that Peter Jackson could have asked for whatever he wanted. And the movie executives have no reason to complain--the Hobbit movies still saw returns of about 4X. 

Data source: the-numbers.com




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