The Year's 9 Biggest Payoffs: ‘Insidious: Chapter 2' Tops Tony Stark and Katniss Everdeen

The Year's 9 Biggest Payoffs: 'Insidious: Chapter 2' Tops Tony Stark and Katniss Everdeen

None of the year's biggest films — not “Iron Man,” “Hunger Games” nor “The Hobbit” — offered as good a return on investment as “Insidious: Chapter 2”

“Iron Man 3” was the year's highest-grossing movie and “Despicable Me 2” its highest-grossing animated movie. Yet grosses aren't everything in modern Hollywood.

Profitability matters most to studios, which are subsidiaries of massive corporations. To justify more spending, they need to prove that spending helped the bottom line, and that the movie posted a good return on investment (commonly known as ROI).

TheWrap counted down the biggest payoffs and bombs of summer a few months ago, and we decided to bring the idea back for the whole year. We covered the bombs here, so we're focused on the success stories.

Also read: Is '47 Ronin’ One of 2013's Biggest Bombs?

The best investment of 2013 was “Insidious: Chapter 2,” released by the all but defunct FilmDistrict and myriad international partners. The horror film grossed $160 million worldwide from a reported budget of just $5 million.

The second most successful film? ”The Purge.” The fourth? “The Conjuring.”

Also read: Best & Worst of 2013: TheWrap's Year-End Review

Now you see why every studio wants to birth its own low-budget horror franchise.

How do we calculate the most lucrative movies of the year?

Studios’ immense gift for disguising cost and fudging numbers makes precision a challenge. Yet it's still possible to give a general sense of a movie's profitability with a back of the envelope calculation.

To calculate ROI for a movie, you take how much it grossed, subtract how much it cost and then divide that figure by how much it cost.

For example, “Insidious: Chapter 2” cost $5 million to make. It grossed $160.4 million. So here's how we did it: $160.4M- $5M = $155.4M. $155.4M/$5M = 31.1.

Here are the year's nine most successful movies:

(Economists, we look forward to your snarky comments. Our response? Hey studios, show us the real numbers!)

Screen shot 2013-12-30 at 1.01.09 PM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Box Office Mojo

For the record: An earlier version of this post featured the name ‘Katniss Evergreen’ in the headline. This was a mistaken reference to the protagonist of “The Hunger Games,” who goes by the name Katniss Everdeen. TheWrap regrets the error. TheWrap has also updated this post to include “Instructions Not Included,” which Lionsgate pointed out was missing from the list.

  • Brooke Pratt

    Thank You for the article, I enjoyed reading it. Your title caption has a pretty big typo. Her name is Katniss Everdeen, not Evergreen. I bet Spellcheck had something to do with it. =o)

    • telast

      Unless that spelling error is a pun on making money.

      • Brooke Pratt

        Well, then that would just be clever.

      • Brooke Pratt

        …but since they corrected it… ;o)

  • Guest

    Unless that spelling error is a pun on making money.

  • hupto

    Are you forgetting that half the gross is kept by the exhibitors?

  • cnall

    What does roi matter whan iron man 3 profited 1 billion dollars?

  • Astral Writer

    Making a huge profit is better than ROI. Avatar and TItanic made a huge profit. We would rather make those movies. It's obvious that James Wan and Leigh Whannell are taking backend deals instead of upfront salary on both Insidious and Insidious Chapter 2.

    To be quite honest, Insidious Chapter 2 was a poorly done movie. It was one of those movies that just got made because there was demand – a space filler. No astral projection reference, the dorky Josh scenes talking to himself and using the cross dressing serial killer backstory showed poor execution.

    Too much though was put into this movie. It moved away from the astral projection sub-genre that created a whirlpool of demand. In any case, great multiple return on the horror movie. Congratulations James Wan for directing two horror movies opening with $40+ million in the same year. That is an accomplishment which is unheard of and deserves far more credit than the ROI.

  • Hello

    For this to be useful we need to subtract exhibitors share and marketing cost and add back ancillary revenues. Can you get/ estimate those numbers and re-do the chart?

    • MartiniShark

      Yes, this is a very basic accounting. “We're The Millers” for example had a significant marketing campaign that ballooned costs and should knock down the ROI. There is also consideration on how much stars, directors ect. have backend deals cutting into profits. And in the case of a studio selling off foreign rights the oversees gross is negligible some times.

  • Sally Struthers

    Right.. try adding in the nearly the 30 million for M&A to get movies like the PURGE & INSIDIOUS chapter 2 into 2,500 to 3,000 plus screens…

    • MrSteed

      you mean P&A, right? as in prints and advertising.

  • MrSteed

    Not a good way to evaluate results.

    Correct me if I'm wrong but the budget costs published refer only to what is normally known as “negative costs” i.e. all the money spent up to the release of the film. Another important figure is missing: Prints & Advertising.

    This makes all the difference because:

    a) a very low budget film may require more money to promote and distribute than it was actually spent during the production phase.

    b) Even among the big titles, it is pretty clear that some films require more marketing spending than others. Think of “World War Z”. Think of “Anchorman 2” overseas.

    And there is the small detail that only approximately 50% of the domestic GBO goes to the studio. The other half stays with the exhibitors. In terms of int'l GBO it is even less (a lot less if you think of China…).

    There is also all the ancillary revenue that comes later in the game… and so on, and so on…

    It is possible to make an educated guess but you should first create a rule regarding P&A costs and apply it to your calculations. For example, that a 100 million film will require 20 million to promote and distribute. 40 million for a 200 million dollars production, 10 million for a 40 million dollars flick… etc.

  • Jesus Christ

    Insidious: Chapter 2 is so scary. I shall bless it.

    Patrick Wilson is hot.

  • funnybuthurts

    This is pointless and ridiculous without adding marketing costs to the mix.

  • funnybuthurts

    Also, it doesn't matter what the budget is, it's what the studio paid for those films. The Purge was sold after it was made, so the MG for the film is what matters, not the budget. I think Insidious and Conjuring went to production with strings attached already. It will also be counted into consideration what inside deals were made to the producers, which may have added to the costs. Although everybody knows that once you give away your film to the studio, they will drown you in overhead costs and you will be never see a dime ever again.

  • Richard J. Lott

    Only two I saw were Iron Man 3 and Despicable me 2, but have yet to see the Hunger Games series. The rest just looked like crappy movies, and as for Gravity I was concerned this was nothing but a repeat of Open Boat! I can't believe people actually waste money to see some of these cheap flicks!

  • Buffet

    If you think Purge only “cost” 3 Million you have no business reporting on the finances of this industry. Published budget and “cost” are two entirely different things. Just who are you claiming gets this “Return on Investment?”

    Because if you're just saying the whole random pot of everyone involved, then you might as well just be doing a straight up BO numbers comparison.

    Reality is, movies like Purge have deferments, backends and distribution fees that add heavily to the cost. And you're not accounting at all for differing levels of marketing spend.

    Even without studios opening the books — it was very publicly proclaimed that Ethan Hawke made millions because of his deferred salary plus participation. Surely that wouldn't count as part of the “Return on Investment”

    I know you sarcastically invited the snark and economic lecturing… But at least define WHO it is you're giving this mythical “ROI” to. Who's the investor you're defining? At least you would be reporting from a point of view instead of just random numbers floating in the ether.