Is Profitability Possible for Indiana Jones and the Dial of Destiny?
Some time ago I made an estimate of how well (or poorly) Indiana Jones 5 is likely to do commercially based on the reported cost of the film, the grosses of prior films in the series, and the “headwinds” I saw the film facing (e.g. an aging fan base, waning nostalgia, skepticism in some quarters about a new director and Disney’s oversight in the wake of a less than perfectly happy experience with Star Wars, etc.). My guess was a gross in the vicinity of a billion dollars, with a 25 percent margin up or down from that mark, with a performance below the billion dollar mark more likely than one much above it (and acknowledgment of a dim prospect of a Solo-like collapse). I also argued that given the reported $300 million cost of the movie (which according to my formula meant that the movie had to make 4–5 times that much to be assumed safely out of “flop” territory, and thus a $1.2 billion gross minimum, perhaps as much as a $1.5 billion gross necessary) this could easily leave the film making a loss — at least, as of the end of the theatrical run.
I see no reason to change any of that now.
Still, I do see some grounds for expanding on it. As my qualifier “as of the end of the theatrical run” indicates I did not concern myself with subsequent earnings — home entertainment, streaming, TV. However, crunching the recent Deadline numbers on twenty movies of 2022, which show pretty much the same picture in this respect as we had before the pandemic, it seems to me that one can say something of those home entertainment, etc., earnings, specifically that they tend to come to about two-thirds of what a movie took in theatrical rentals (the 40–50 percent of the gross the studio gets) in the case of big-budget films, which is to say that the final revenue averages roughly 60 percent theatrical, 40 percent from those other streams. It also seems that one can say something of the fuller expenses — like the costs of that release in those other media — which mean that the total expenses on a film commonly run three times the production budget these days (and sometimes more).
Going by the “ production budget times three formula,” and in the absence of information to the contrary the assumption that the $300 million production cost is the net figure, Disney-Lucasfilm may be spending up to $900 million on Indiana Jones altogether (a colossal but not unprecedented outlay). Going by the 60/40 theatrical/non-theatrical split, the movie would need some $500-$550 million in theatrical rentals — which means $1-$1.3 billion in box office gross — just to reduce the gap to be made up by the non-theatrical options to the proportions at which home entertainment and the rest could be expected to make it up. And this might be optimistic, given the role of participations and residuals here given that, after all, they brought Harrison Ford back to play Indiana Jones a fifth time.
The result is that, unless what we have heard about the production’s costs are way off (and sometimes the expenditures do indeed turn out to be significantly less), it is easy to see the Indiana Jones film falling short of what it would need not only to make its money back in theaters, but to do so even with the help of post-theatrical revenue. A “mere” $750 million gross could leave the studio well into the red on this production, with the gap too big to be filled up by those other revenues. Of course, for all that the film may have some value to the franchise by keeping up interest in the older Jones films, moving associated merchandise, etc., but a bigger success would fulfill that object much more effectively than an underperforming Indiana Jones movie. And in the end there is a world of difference between merely minimizing one’s losses, and enjoying the kind of roaring success that motivated Disney’s purchase of Lucasfilm, and backing a big-budget Indiana Jones film.
Considering such a return on investment I find myself thinking of the trajectory of the blockbuster. Raiders of the Lost Ark, way back in 1981, cost what in today’s terms would be some $60 million to make — a fifth what this movie has run — while the other associated expenses (e.g. publicity) were probably still smaller — while Indiana Jones 5 for all the extra investment, would be doing very well indeed to merely match its box office take (in today’s terms, in the vicinity of $1.3 billion), which would still, even with the vastly enlarged home entertainment/streaming/TV income, just let it break even.
Just as with the historical epics and musicals that bloomed in the ’50s, increasingly struggled in the ’60s, and did not wholly survive that latter decade, the outlays have got to a point that makes vast investments to highly uncertain result the norm, so much so that just as with those genres I look at movies like this and think “This can’t go on.” But for the time being “this” is still going on, because at its level of capitalization, and facing the competition it does from those other media, Hollywood simply cannot go on in any other way.