Study: big movie budget = big movie profit

A new study offers reassurance for studio heads worried about runaway budgets. Films boasting production pricetags of more than $100 million actually generate higher returns than mid-range pics, averaging $247 million in net profits per release, according to the study by SNL Kagan, which analyzed all films released on 1,000 or more screens from 2004-08. Pics that cost $90 million-$100 million earned an average of $118 million. When it comes to specific genres, animated films performed most strongly, averaging $221 million in net profits per toon. Sci-fi and fantasy films follow at $125 million. The least profitable of the 10 genres listed in the study were horror pics, with an average domestic gross of $33 million and an average net profit of $17.9 million, and thrillers, with an average domestic gross of $40 million and an average net profit of $13.7 million. The study, "Economics of Motion Pictures," analyzed 764 films. Net profits were based on a typical distribution fee scenario at major studios. SNL Kagan tallied 83 films with budgets of more than $100 million during the four-year period. (The study did not factor in marketing expenditures, however.)