September Insights from Cinelytic
2023 Toronto International Film Festival Special
Throughout this year, we at Cinelytic have been reviewing the projections we published back in September of 2022 for the full 2023 slate, with which we estimated a total domestic gross of US$8.65b. This efficient early prediction model also allows us to forecast home video and TV revenues, offering a truly unique tool for the film industry. So far in 2023, as shown in the graphic below, we’ve maintained impressive precision as it relates to our domestic box office projections, currently tracking at around 93% accuracy through the month of August:
With the 48th annual Toronto International Film Festival (TIFF) about to kickoff this week, we at Cinelytic decided to utilize this same forecasting tool and take a deep dive into a series of upcoming releases that are garnering significant attention as potential “hot sales titles” at this year’s ceremonies: THE CRITIC, MEMORY and LEE. While our signature ROI forecasting, which is incorporated later in these Insights, is more useful for financiers, producers and all those providing equity for a project, our sales estimates tool allows both buyers and sellers at festivals like TIFF to view the per territory value estimations of a title inclusive of all media rights (box office, home video, TV and ancillary). As highlighted in the graphic below, this tool may be more interesting to those in a market setting who are attempting to calculate the correct figure each territory’s rights should be bought or sold for:
THE CRITIC, a British period thriller that starring Ian McKellan, Gemma Arterton, Mark Strong and Lesley Manville, may have considerable international appeal, particularly in the United Kingdom, due to its attractive genre, setting and exclusively English cast. LEE, a historical drama starring Kate Winslet, is predicted to be in higher demand abroad in comparison to MEMORY, a drama starring Jessica Chastain and Peter Sarsgaard. This make sense when one takes into account the foreign appeal of British star Kate Winslet and WWII related subject matter that incorporates international storylines and characters, while MEMORY is a more understated and focused American story with a fully American cast.
Revenue Forecasting: Spotlight – THE CRITIC
As mentioned above, we also ran director Anand Tucker’s THE CRITIC title through our predictive tool to showcase what may lie ahead for these types of releases in terms of revenue. This tool takes into consideration 19 material input attributes to determine a full-performance waterfall, P&L and ROI. We estimated a budget of US$10m, an additional US$7m in total P&A costs and proposed a modest theatrical release strategy of 800 screens with Ian McKellan in the lead. The Cinelytic platform predicts a DBO of roughly US$6.3m, domestic gross revenues (BO, HV, TV) that total roughly US$13.9m, and international gross revenues totaling US$13.5m:
Based on the anticipated global net revenues (including BO, HE, TV net of distribution fees and expenses), the film is expected to result in a slight loss for whichever studio decides to take it on, with a projected ROI of –6.8% before the talent back-end, which can be substantial.
To understand whether the ROI, investment, and domestic/global net revenues are in sync for a film of this scale and caliber, it is helpful to compare the same data points for the other aforementioned notable titles that will be up for sale at TIFF. As such, we used the Cinelytic platform to also run projections for MEMORY and LEE. The table below outlines the results output by the Cinelytic platform:
As shown above, all three of these titles are projected to result in a loss, with an average ROI of -26.4%. Despite being the first feature film directed by Tucker in 13 years, THE CRITIC’s combination of a mid-tier budget and attractive mystery-focused plot could explain why this title seems like the best bet amongst these three, and thus why our projections for this title are particularly aggressive in terms of international revenue.
Director Michel Franco’s last feature, SUNDOWN, screened as a special presentation at the 46th TIFF back in 2021. His follow-up MEMORY, which has clearly earned him another invitation to the festival, is a drama that delves into the complexities of mental health. While Jessica Chastain presents considerable and marketable star power, Franco’s signature melancholy and slow-burn approach coupled with this type of subject matter are projected to net a substantially negative ROI for this project.
The final release in this comp set is a biographical drama starring Kate Winslet as Lee Miller, a historical figure who went from a career as a glamour model to enlisting as a photographer to chronicle the events of World War II for Vogue magazine. Kate Winslet’s European appeal also lends itself to slightly aggressive international projections, and while director Ellen Kuras has only one documentary film to her name, she has had a recent and prolific career in television, helming episodes of high profile shows like OZARK, THE UMBRELLA ACADEMY and THE TERMINAL LIST over the past few years.
All to Say…
For feature films there is no crystal ball, and it is very difficult to predict performance with a high degree of success. What we’ve hopefully been able to showcase is that one can make better decisions, in a more efficient way using Cinelytic. Each of THE CRITIC, MEMORY and LEE are important indie films that deserve to be released in the best formats possible. What we can say using Cinelytic is that there is a proper price point for each film, along with an appropriate P&A and distribution strategy. If both are correctly applied, a definitive road to providing a positive ROI can present itself. It may be that a film releases theatrically in all markets or that it eschews theaters all together to release first at home. The reality is that we take the guesswork out of the equation replaced with proven science and business fundamentals to allow you to make the right choice.
TIFF will provide many a distributor with the opportunity to buy great quality films, so let Cinelytic provide you with the tools to buy them at the right price.
