What Is A Box Office Flop? Why The Answer Is Not As Simple As It Used To Be

For as long as I've been reading about box office minutiae, one rule for determining a film's theatrical profit endured: the 2.5 rule. This technique suggests a movie has to do 2.5 times its budget worldwide before being considered "successful." Whether I was reading Rope of Silicon, Box Office Mojo, or JimHillMedia, the 2.5 rule endured. It was a steady lighthouse in the fog of uncertainty clouding the film industry. No matter how wonky the box office landscape got, this measurement helped separate the flops from the hits.

In the 2020s, though, the 2.5 rule has pretty much gone out the window — as have any easy perceptions of what constitutes a "flop" in the modern theatrical landscape. This goes far beyond scenarios like Dwayne Johnson allegedly leaking misleading "Black Adam" financials to counter claims that the film bombed at the box office. Today, Hollywood's business rules have changed dramatically in such a short period of time that it's no longer so easy to dub something "a flop," or at least the classical definition of one.

The circumstances informing the confusion and chaos plaguing box office freaks like myself are endless. Breaking down why it's no longer so easy to discern a box office flop vividly reflects how much the film industry at large is in the middle of tremendous change. No wonder my memories of the 2.5 rule seem so ancient.

A new term entering my lexicon and the vocabulary of anyone writing about the box office for a living is "the streaming curve." Basically, this is the idea that movies hailing from streamers can afford to rack up theatrical losses because they'll eventually make oodles of money on their respective platforms like Prime Video, Apple TV, and Shudder. A good example of this is Chris Pratt's "Mercy," which bombed at the box office. 

On its own, the film's big screen revenue couldn't be considered remotely acceptable. However, the streaming curve suggests Amazon MGM Studios views the feature as part of a long-haul plan where it eventually becomes not only a Prime Video smash, but also bolsters other Pratt programs on the streamer (like "The Tomorrow War" and "The Terminal List"). Thus, flexibility could, in theory, be granted to "Mercy." Under this theory, "Crime 101" doesn't need to break even since its theatrical run is a precursor to an eventual Prime Video debut.

I'm a bit dubious about this concept. Sure, some box office flops do become more popular on streaming, where people can watch them basically "for free" as part of their monthly subscription. However, various 2021 Warner Bros. box office bombs also flopped on HBO Max when they simultaneously debuted on the service. Today's dud doesn't equal tomorrow's streaming hit, but for now, studios are clinging to the "streaming curve" mentality.

When I was young, outlets would trumpet about how many millions of "Cars" or "G.I. Joe: The Rise of Cobra" DVDs were sold when they hit shelves. It's an understatement to say how disorienting it's been to witness this transparency give way to a modern-day reality where studios don't disclose revenue of their premium-video-on-demand exploits. All the dollars earned from iTunes, Google Play, and other digital marketplaces are shrouded in secrecy.

That's a massive problem because PVOD moolah has become an integral part of the equation. This is especially true for Comcast movie studios Universal Pictures and Focus Features, which began embracing PVOD releases starting with 2020's "Trolls World Tour." In the past, I could see that "The Benchwarmers" didn't quite double its $35 million budget theatrically, but did almost match it in its home video revenue. That provided valuable insight into what movies turned a profit and when they accomplished that in their lifespans.

With specific PVOD figures banished to the shadows, there's no way for box office observers like myself to figure out when titles like "Black Bag" might turn a profit. The vagueness of PVOD earnings, though, allows studios to wriggle around any movie being a flop. After all, it might possibly break even through digital rentals and purchases. Uncertainty has now consumed the post-theatrical world.

How long do movies stay in theaters? It's more complicated than you think. Basically, the major studios each have different approaches to when their releases head from theaters to PVOD and streaming. Universal and Focus Features send certain titles, like box office dud "The 355," to PVOD around the 17-day mark, while smaller studios like Neon will often wait 60+ days before sending projects like "Anora" and "It Was Just An Accident" to PVOD. But typically, big wide releases are available in your home within 45 days.

This release shift has done more than solidify box office records that will never be broken, while also diluting the significance of box office flops. In the past, duds like "Stealth" or "Final Fantasy: The Spirits Within" quickly vanishing from theaters while other titles played on the big screen for months reinforced their financial shortcomings. It was clearer what was a success and what wasn't. 

Now, I can watch a hit movie like "Wicked" at home via digital rental just 39 days after it launches in theaters. When everything's rushed onto PVOD and subsequent streaming launches, the significance of its theatrical run and any money made (or lost) there is diluted. It may seem like a silly, technical thing, but abbreviating theatrical-exclusive runs does take away some of the big screen's luster. That's a much bigger problem than indicating flops are now less meaningful (since further revenue streams are quicker to reach).

"That can't be true." Those four words rattled in my brain when I first saw the gargantuan Chinese box office numbers for "Transformers: Dark of the Moon" in 2011. With China drastically expanding its theatrical footprint and hungry for American blockbusters, the global box office exploded. Thus, the 2010s delivered some of the world's biggest movies ever at the box office, including multiple titles that cleared $1+ billion internationally. With such moneymakers on the table, it was much easier to declare something like "Terminator: Dark Fate" a flop compared to "Avengers: Endgame."

In the 2020s, though, the global box office potential for American movies has drastically declined. Massive hits like "Spider-Man: No Way Home" and "Barbie" are still possible, but the biggest box office flops of the 2020s so far indicate how low costly tentpoles can now go. Even once-invincible Marvel movies like "Thunderbolts*" can't clear $385+ million worldwide. 

Under these circumstances, numbers that would've been inexcusable in 2016 are given more leeway today. What might look like a flop on first glance becomes a lot more complicated when accounting for how tricky and subdued the international box office has become. Just look at "Twisters," which cratered overseas but did gangbusters domestically. In 2011, I thought the possibilities for worldwide box office hauls were limitless. Today, I and other observers are constantly reminded of the global theatrical landscape's finite nature.

What I find terrifying about the shifting perception of box office flops is how much of this change comes down to the scale of modern movie studios. In the past, even a major independent studio like DreamWorks SKG would face immense difficulties requiring investors to step up with new capital. Bankruptcy could be around the corner for DreamWorks SKG if a big enough box office flop occurred. "Heaven's Gate" and "Cutthroat Island" bankrupting United Artists and Carolco Pictures, respectively, also made the gravity of box office flops apparent.

Today, though, movie studios are gargantuan creatures with tendrils in countless media landscapes, ensuring that box office flops have no impact on their bottom line. Disney can pour $400 million into "Avatar: Fire and Ash" without blinking. Likewise, an entity like Amazon MGM Studios can spend $75 million producing and promoting the documentary "Melania," gross only $16.3 million worldwide, and yet somehow come out unblemished. 

Compare that to a decade ago when every bomb from indie studio Annapurna went under the microscope. With movie houses now corporate titans, it feels like nothing's technically a box office flop. How could any film losses hurt an institution like Amazon that's worth $2+ trillion? The size of these studios doesn't just challenge how we categorize flops. It also paints an ominous portrait of what the future of the film industry (controlled by fewer, bigger studios) could look like.