The Real Way Blockbusters Make Their Money

March 15, 2019

The most important way that blockbuster movies make money isn't always at the box office. Cheddar explains what the secret pull for PG-13 ratings are from filmmakers & studios, and how that impacts audiences.

FULL TRANSCRIPT

Speaker 1: This is a list of most of

Speaker 1: the top 10 highest grossing films of all time.

Speaker 1: So what do all these films have in common?

Speaker 1: For one thing, they're

Speaker 1: almost all franchises that have many sequels.

Speaker 1: They're all rated PG-13.

Speaker 1: Normally about half of the money they all raked in

Speaker 1: collectively was brought in through box office sales.

Speaker 1: The other half is made in a much more unexpected way that

Speaker 1: wasn't really directly related

Speaker 1: to the target audience of the film.

Speaker 1: [MUSIC] To make any kind of franchise,

Speaker 1: especially the cinematic kind that spawns

Speaker 1: many sequels you have to make

Speaker 1: a lot of money off of your film.

Speaker 1: Measuring this financial return and

Speaker 1: judging how well audiences like movies,

Speaker 1: usually comes in the form of tracking box office sales.

Speaker 1: But the actual money made off with each ticket is

Speaker 1: split in more ways than you might think.

Speaker 1: While this is a perfectly adequate system,

Speaker 1: it isn't the most ideal way to capitalize off of

Speaker 1: a film's profits because it's just

Speaker 1: being split between so many different entities.

Speaker 1: That's why it's so important that

Speaker 1: Star Wars did something that

Speaker 1: changed the way the film industry operated forever.

Speaker 1: Up until this point,

Speaker 1: toys were not part of distribution.

Speaker 1: They were based off movie properties but only as

Speaker 1: an afterthought when these movies

Speaker 1: repeatedly performed well at the box office.

Speaker 1: But Star Wars flip this idea on its head.

Speaker 1: It didn't wait for the film to be released

Speaker 1: to act on a desire for toys.

Speaker 1: George Lucas believed so firmly that

Speaker 1: Star Wars characters and props can make great toys that

Speaker 1: he passed up a $500,000 directorial

Speaker 1: salary in order to retain

Speaker 1: licensing and merchandising rights for the franchise.

Speaker 1: With that belief, he and his team

Speaker 1: reached out to toy manufacturers

Speaker 1: six months in advance of the film to make

Speaker 1: toys based off of concept art.

Speaker 1: This was previously unheard of.

Speaker 1: Many big time manufacturers like

Speaker 1: Hasbro and Mattel completely passed

Speaker 1: up this opportunity because what

Speaker 1: they and so many other people didn't

Speaker 1: expect was just how well Star Wars would over perform.

Speaker 1: Well before, toys are made to supplement films.

Speaker 1: Star Wars completely changed the tide.

Speaker 1: This one film had the power to raise

Speaker 1: all industry toy sales up eight percent in 1978.

Speaker 1: It was the first movie tying with the Lego brand

Speaker 1: and one of the few film franchises which has been

Speaker 1: able to generate a lot of money even in between

Speaker 1: the huge gaps of time between some Star Wars films.

Speaker 1: Today, these films have a similar impact

Speaker 1: to the revolutionary 1977 counterparts.

Speaker 1: The Force Awakens is still

Speaker 1: the number one highest grossing film of all time in

Speaker 1: the US and the Last Jedi is

Speaker 1: not far behind at number eight on that list.

Speaker 1: And while that proves that ticket sales

Speaker 1: are strong with this franchise,

Speaker 1: toy sales are even stronger.

Speaker 1: Episodes 1 to 7 collectively took

Speaker 1: home four billion dollars in box office revenue but

Speaker 1: the toy lines associated with them generated a

Speaker 1: whopping $12 billion in the same time frame.

Speaker 1: There is one big difference between

Speaker 1: the Star Wars films of the '70s, '80s, and today.

Speaker 1: Since 2005, every Star Wars film released in

Speaker 1: theaters has garnered a PG-13 rating where before,

Speaker 1: they were just PG.

Speaker 1: It's also worth noting however,

Speaker 1: that the PG-13 rating wasn't even invented until 1984.

Speaker 1: That's six years after the first Star Wars movie

Speaker 1: and almost 50 years after Batman,

Speaker 1: Superman and a lot of

Speaker 1: other superheroes became pop culture phenomenon for kids.

Speaker 1: Before this, there was only PG and R ratings.

Speaker 1: PG-13 was created as a middle ground between the two,

Speaker 1: for movies that might contain

Speaker 1: more violence than you'd expect out of

Speaker 1: a PG movie but not as much as an R rated film.

Speaker 1: Because apparently, seeing a man's

Speaker 1: still beating heart get ripped out of his chest,

Speaker 1: was deemed a smidge too violent for children

Speaker 1: but not so much that it should be

Speaker 1: restricted to adults above the age of 18.

Speaker 1: So, thank you Indiana Jones.

Speaker 1: But the thing is, a lot of

Speaker 1: film franchises that are big blockbusters today,

Speaker 1: were grandfathered in as kid friendly content because

Speaker 1: they proceeded the PG-13 rating

Speaker 1: in terms of their intellectual property.

Speaker 1: But the thematic nature of a lot of

Speaker 1: these films contain a lot of punching, slicing,

Speaker 1: biting and violence which means

Speaker 1: that films that were originally released as

Speaker 1: PG are now being bumped up to PG-13 in their sequels.

Speaker 1: Well, this trend seems to push kids to

Speaker 1: engage in material that's deemed to be

Speaker 1: above their age range but also pushes movies to

Speaker 1: engage in practices that meet kids at their own level.

Speaker 1: This is exemplified by the fact that for

Speaker 1: every new superhero sequel that comes out,

Speaker 1: your main character is bound to get

Speaker 1: a new costume and a new toy associated with that costume.

Speaker 1: This isn't really a trend for R

Speaker 1: rated movies as Deadpool's costumes stays the same from

Speaker 1: one movie to the next and Logan never

Speaker 1: suits up in any kind of recognizable garb.

Speaker 1: It's important to note that because of these practices,

Speaker 1: it's easy to see family friendly PG-13 movies

Speaker 1: as devious marketing tactics

Speaker 1: trying to get kids in to sell toys.

Speaker 1: While it's clear that this is the driving factor,

Speaker 1: it's also important to note that a lot of

Speaker 1: the money made on toys goes back to

Speaker 1: the studios and filmmakers so that they can keep

Speaker 1: producing movies that are loved not just by kids,

Speaker 1: but by people of all ages.

Speaker 1: And at the end of the day,

Speaker 1: the MPAA isn't a government regulated organization.

Speaker 1: The ratings that they put in place

Speaker 1: are suggestions, not laws.

Speaker 1: If history is any indicator,

Speaker 1: these ratings are updated

Speaker 1: when there's a heavy amount of outcry

Speaker 1: from parents based on content in certain films.

Speaker 1: And seeing as 88 percent of parents surveyed by

Speaker 1: the MPAA feel that their ratings are accurate,

Speaker 1: it doesn't seem like the trend of using PG-13 movies

Speaker 1: to sell toys is going to stop anytime soon.

Speaker 1: [MUSIC]