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In response to
"You're ignoring the cost of making the movie itself. I assumed $200m for the film and $50m for marketing in a reduced way."
by
spamlet
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I’m definitely not. Those costs get split among investors, but at $37, Disney brings in $444 million.
Posted by
David (aka David)
Aug 11 '20, 08:34
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Which conveniently takes the low nine figures they would have staked in a $175 million production before factoring in the tax credits, which cuts their expense close to half. If anything, I erred on the side of caution.
The investors are the ones left holding the bag on a sunk cost in exchange for a split of the revenue. Any of them who had theatrical earnings only are a special kind of screwed. The last time anyone published anything about this, home video was part of investor returns, but Disney+ likely wouldn’t qualify.
You’re looking at this in too-general terms or aren’t factoring in the $7 for the subscription. And that leads to the genius of this potential new model. Mulan will keep earning this way, which it wouldn’t after a month in theaters. The real question is the cost of cannibalizing their home video market, which is what I’m investigating this week.
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