'Paranormal' Now the Most Profitable Film Ever

I guess if you want to pick and choose which numbers go into the equation you could make the case that Paranormal Activity is the most profitable, or Clerks, or El Mariachi, or... lots of films. But if you don't limit it to accounting numbers and allow for estimation it's still, and will probably always be, Deep Throat, like it or not. With the involvement of organized crime the hard revenue data simply doesn't exist, but the $600+ million estimated gross take is very reliable, and the $25,000 cost is verifiable. Using those numbers Paranormal Activity needs to cross $350 million to be in the ballpark. If you also add in post production costs, such as the close to $10 million poured into advertising Paranormal Activity by Paramount versus the $0.38 in dental floss for Deep Throat, Paranormal Activity won't become the most profitable movie ever until it's well over $2.4 trillion--that's with a T.

here is a simple way to level the playing field if one likes to play with numbers.
there are 4 components to a distributed film.
1. pre PRODUCTION
2. PRODUCTION
3. post PRODUCTION
4. marketing and distribution

notice the word conspicuously missing from #4. if you stop your calculations at #3, before the wildly variable process of marketing and distribution things can be much more relevant. this particular numbers pissing match holds no interest to me, but i am an independent cinematographer and i can bring that perspective to this discussion. costs incurred up to the end of post prod are pretty easy to figure out. things get muddy past that. factors including the reputation of the distributor and economy of scale begin to factor in and apples to apples becomes difficult. when everyone involved with a no name film are, well, no name you dont have to consider what it would have really cost to have travolta and harvey kietel in your low budget affair as a favor. anyway.

I can't believe how absurd your interpretations of the numbers generated, so far only talking domestic theatrical, by "Paranormal". Don't you understand that the box office numbers ONLY represent ticket revenue collected by the theatres? The actual return/film rental to the distributor/studio only represents about, if you wish to use a major theatre circuits average film rental paid, of 54% or 55%? You don't use the box office gross when determining so-called "roi". You use film rental EARNED. So your so-called roi numbers are already almost cut in half. I find it almost impossible to believe that a supposedly knowledgeable movie analysis web site would use such incredibly inept and inaccurate methodology. And not even factor in prints, advertising, publicity,distribution fees, etc etc? Strictly bush league. Try to learn a little bit about motion picture distribution before you write/publish articles such as this.

I've read a lot here about how 'Paranormal's' P&A cost should have been factored in. What many of you folks are forgetting is that every major release requires at least some level of this expenditure. At under $10 million, 'Paranormal's' P&A is about 20 percent of what is typical for a major release. So if we had figured how a way to account for the broader expense reality of this film, it very well might have proven to have the largest ROI ever by an even wider margin.

IMO everyone is on target & at the same time off base.

It is true, this film was "produced" for 15K. Like any product, marketing expenditures are always more than production of the product. That's just business.

Journalists should, and have, properly disclosed the fact that this budget was padded with another $10mil. Of course it was, it had a Paramount backed distribution deal (who's last major licensed hits were Godfather & grease).

But should we really care about how hefty the ROI was? Any seed, angel or VC investor would give their right arm for a 100% ROI, let alone a 600% ROI (after calculating the Paramount expenses).

The big story here is not splitting hairs over journalistic reporting of the precise ROI of some film. The big story is that the little guy made it big. Maybe the show sucked? I don't know, I never saw it and probably wont because I'm not really into horror flics. Whether this production was huge big, or just big big, does it really matter? They still made it big.

Independent producers are happy if their shows or movies "break even" and survive another day so they can continue pursuing their passion of production. Making a profit is an added bonus to living the dream. Does anyone other than hair splitting skeptics care if this movie had a 600% ROI or 443K + ROI?

The bottom line is the little guys made it again, and made it big. How big? If you are one of the little guys you don't really care how big "big" really was. We just want the world to know that you don't need to be a 60 year old billion dollar movie studio to make a good show.

Congratulations to the indie producers behind this movie that showed that Blair Witch was not just a one time fluke in the annals of Indie history, but a reflection of what the indie industry can do if given the right platform of marketing & distribution.

- Jamie

Oops, Frankel & Smart are correct! I didn't deduct the cost first... now Titanic's percentage of ROI is worse - LOL!

Its 824.4% ROI (using Baffled's numbers)....

Umm Baffled you do know that you should have your facts straight before you talk big game right?
Titanic's 1.8 Billion - its 200 Million = 1.6 Million
now we have to divide by 200 million and we get 8.
8 multiplied by 100 and we get the actual percent which is 800%
Baffled, dude or gal or it, i dont know what you are, i'm in 9th grade and know this.
Go back to night school sir or maddam.......or it

Always remember, Baffled, that rough and baffled is a bad combination. In your calculations, you forgot to divide the adjusted profit by the production budget. I'll do that for you, on the count of the fact that you seem like such a nice, reasonable person. Comes out to about 800%. Nice, but not in the top five in terms of ROI. Again, my methodology is unstoppable. NEXT!

to Baffled:

Using your Titanic numbers (assuming those are correct), the ROI is 924.4%, well below the ROI of all of the films listed in the chart (and 469 times lower than 'Paranormal')

to others:

The point is well taken that while the production costs were low, the marketing costs are enormous - unfortunately in today's inane world marketing seems to matter more than product.

I haven't seen the film, but if its anything like Blair Witch (which was ingenious in marketing and in its basic concept) I wouldn't expect anything earth shattering. I live on a large farm (with a lot of woods) and to me Blair Witch was like watching 3 city people go crazy in my back yard (LOL!!!)

You do realize that you people are stupid right? Ok, lets take the highest grossing film of all time. Titanic. That movie made $1,848,813,795. 1.8 BILLION DOLLARS. Now lets take the budget. $200 million (Fun Fact: Titanic is also the most expensive movie ever made).
1,848,813,795 - 200,000,000 = 1648813795
1648813795 X 100 = 164881379500
164881379500 percent... That can't be larger then Paranormal Activity's UNTHINKABLE 414,233 percent. Do your fucking research before you go spouting off crap about stuff you know nothing about

I understand business is business, or the accomplishments, or the supposed success, but I could care less, this isn't business, this is theft!!

A lot of people (like myself) went to watch this film believing in the reviews that were shown on T.V. "The scariest, horror, heart stopping, and what not". We about fell asleep, I think that Disneys Cloudy with a Chance of Meatballs movie has more suspense in it than PA. It is not putting the film down, but also it is not right to say that it is the best horror movie ever. All they are doing is counting their money, laughing at how many of us they suckered in. I would like to see on T.V. some of the real reviews of people like me, that almost walked out of the theater not because I was terrified, but because the movie was plain boring, then people would really think twice, if to watch Saw VI, or this so called horror film, how disappointed we were, halfway into the film we regreted not choosing to watch Saw VI. We should have gottn our money back, most people agreed with us. Good thing we ate before going in, or we would have been more upset if we spent money on soda and popcorn.

Dear journalists_dont_understand_business:

If accurate total costs could realistically be acquired and put into a neat formula, I would have used it... But you have to draw line somewhere... And something tells me Paramount's minimal investment would still yield a spectacular result. Keep those comments condescending and coming!

Seriously? Will someone explain "profit" to Mr. Frankel? This is like calculating profit P&L of a product company spending $20K in R&D to develop the product, then ignoring all the manufacturing cogs, inventory, distribution, and marketing budget. I'm sure they have spent at least $20MM+ just in the marketing budget?

I think if you looked at movies like Spiderman and Pirates, you'll find they were much more profitable over thier lifetime when you add in international, rentals, DVD sales, brand licensing royalties, etc, etc...

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Dude and Slappy

Sour grapes much?

Even if the studio kicked in 50 mil on other stuff they still made more profit than any of use will ever see.

Jerzy: "The Full Monty" made $257.9 million globally on a reported production budget of $3.5 million for an ROI of 7,268%. Close, but not in the top 5. My methodology is unstoppable.

OMG...do you work for Paramount's publicity department. Your credibility is now lower than ever. Not only are there films like Full Monty not in your list, but Whatever Dude is exactly right. Jesus, how does this stuff get printed? Is there no skepticism in journalism anymore?

Whatever dude's point is really not well thought out. Why bash the success of the film. First of all, this is exactly what the film business needs right now. Some type of success. We should all be gladly watching from the sidelines as this little film scores big and applaud it's/their success because maybe it'll help jumpstart more production. Secondly, even if the studio pumps "millions" into the film to "clean it up and get it ready for theatrical release" the cost to profit ratio is still staggering. Let's say Paramount put in an additional $10 million for addition post and P&A et al. So far that's $65.5 million on a $10 million $15 thousand dollar film. That is pretty good math and it's good for the business. Let's hope all the studios find a comparable film to match the success of Paranormal Activity so we can start making films again instead of having time to write responses to news articles.

I agree with Alan, it is important to look how this film accomplished what it did, which is pretty amazing. Whatever numbers are used, it is a very profitable movie. Whether Hollywood will learn from it time will tell.

For another perspective on this movie, see this post on Thompson On Hollywood, http://bit.ly/E7usd Full disclosure, I wrote it.

This is not bunk. It attempts to put into perspective the monumental achievement of the film. Sure it's not scientifically correct, but as a comparison to those other films, it makes its point very well.

BTW: Read Robert Rodriguez's book Rebel Without a Clue, which debunks any misconception of how Rodriguez 'sweetened' his film after it got studio distribution. He was still doing the work by hand using the same rubberband and duct-tape methology as used in production.

Agree with Whatever Dude. I'd add that the production budget doesn't include the studio-financed new ending...not to mention those figures don't take in to account marketing cost, P&A costs, studio overhead costs, exhibitor fees, distributor fees, et al. I'm so sick to death of people making these pronouncements based on this over-simplified nonsense of (REPORTED!!! not actual) Production budget vs. Box Office Gross (Which as reported are also not 100% accurate).

It just is not that simple, people.

Please. This is bunk. Just like with "El Mariachi" and dozens of these so-called "cheap" movies, the production budget is dwarfed by the millions the studios pour into them after the fact in order to sweeten the picture and sound, perform DI's and get the in shape for theatrical release. In the case of something like "Clerks" there's also a soundtrack and heaps of money in licensing added after the fact which also goes unreported on the "production budget." Why? So they can publicize its profitability and make it a marketing hook. But it's bunk. Someone got this thing in the can for $15,000, but the studio's investment still probably runs into the millions for after-the-fact sweetening. Please don't play into this marketing hoax.