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Frequently Asked Questions:
1.How is a movie's net profit calculated? Which items are included in a movie's extra revenue and cost?
According to the Deadline website, a movie's net profit is its total revenues minus total costs. In a traditional revenue model, except for the theatrical rental derived from box office receipts, a movie will also create extra revenue through home entertainment (physical/digital), domestic/foreign TV sales, and more recently, streaming subscription fees. On the other hand, on top of its production cost, studios will also have to pay for prints and ads, participations, residuals and off-the-tops, interests and overhead before net profit.
2. How is the a movie's revenue/cost estimated?
First, a movie's box office receipts is available to public, accessible throuth The-Numbers website. In order to come to its theatrical rental estimation, different ratios need to be applied to the box office numbers, usually divided into three categories: North America, overseas and specific region with a special cut rate.
Second, according to a movie's genre, budget, cast, public reports, and most importantly, historical dataset of profit published by the Deadline website, its extra revenue/cost can be estimated based on these metrics.
Third, though a movie's net profit is estimated to the best accuracy based on current infomation, these numbers are rough and only used for comparison with other titles to compile the ranking.
3. Why only Hollywood movies are included in the ranking?
Outside of North America, there are certainly huge hits elsewhere in the world. However, a foreign movie's budget is hard to be retrieved in a reliable and verifiable way, which is key in estimating a movie's profitability. If such information is available for non-Hollywood films, it's possilbe that an updated ranking will include these titles.
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