How Transformers Movies REALLY Make Money | Rise Of The Beasts

Transformers rise of the beasts do out

in theaters this weekend the latest

entry from Hasbro and one of their

biggest toy lines ever now the movies

have grown in popularity over time but

then in recent years we've seen a little

bit of a drawback at the box office but

yet Hasbro and Paramount Pictures keep

pumping them out nonetheless why is that

well today we're going to start

answering questions about why

Transformers is a bit of a different

cinematic franchise than almost

everything else out there let's get into

it

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all right

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Transformers rise of the beasts set to

open in theaters this weekend to a

relatively muted domestic box office

opening of maybe somewhere around 50 to

55 million dollars if current

projections stand as I record this on

Wednesday night just a day before

Thursday previews begin now that's not

anything to write home about and with a

reported 195 million dollar net

production budget according to variety

magazine that means it's got a ways to

go but just as in the case with previous

Transformers films this movie is going

to look to make its bones overseas in

the international market particularly

markets around down the Asia Pacific Rim

that's always been a big play for these

Transformers movies now if we look at

the chart here barring of course the

1986 original animated film Transformers

the movie and look at the more modern

era of what we've accomplished from 2007

to this year with Transformers rise of

the beasts you can see here the

production budgets quite stunningly have

been relatively similar the first

Transformers movie back in 2007 coming

in at 151 million dollars that was a

song back in 2007 210 195 210 217 and

then

102 million dollars for Bumblebee which

was astonishing but considering how that

movie was done and you really look at

some of the special effects and how

reduced they were from big transformers

epics you can kind of get a feel for how

they might have wound up it's such a

small production budget for a film of

that caliber then we've got Transformers

rise of the beasts right back up around

200 million as we said earlier but if we

look at worldwide box offices with the

exception of things like age of

Extinction and Dark of the Moon these

movies have settled under a billion

dollars each and every time now a lot of

them most all of them have made money at

the box office now Transformers the last

night probably might have been the

exception to the rule in this case where

it may have come just shy of making a

profit at the box office especially

considering it's heavily china-laden box

office in those figures and Bumblebee

was the lowest performing entry of that

franchise to that point in 2018 and I

think that had largely to do with the

fact that quite frankly the last night

was just a terrible film but nonetheless

the people that did go see Bumblebee

really enjoyed it and having finally

seen it myself I can say I think it was

one of the best movies they've ever done

and now they're trying to repeat that

success with this latest entry

Transformers rise of the beasts give

given rise of the Beast production

budget of around 200 million and what is

almost assuredly at least another 100 to

125 million in marketing spend then

Paramount Studios and E1 entertainment

which is Hasbro's own Film Production

Studio probably has similar to the tune

of about 320 million dollars in the

ground to produce and Market this film

into theaters that means the movie is

going to have to get somewhere around

maybe 650 to 700 million dollars

globally to hit a break-even point

especially when you consider how heavy

China is going to be in the box office

waiting and of course China only returns

about 25 percent of their retail box

office back to film Distributors here in

the U.S the lowest anywhere on the

planet so if rise of the Beast just kind

of performs as an average Transformers

movie and winds up with maybe somewhere

close to 700 million dollars globally

that's not a great thing at the box

office for a film of this scale however

it's a big win for Hasbro because you

see at the end of the day Transformers

is a toy line and the movies that they

make and put into theaters in

partnership with their distributor

Paramount that's just one big

advertisement that audiences actually

pay for this article from Mark and watch

believe it or not from almost 14 years

ago July 8th of 2009 Hasbro Incorporated

is revving up for bigger sales in the

toy aisle thanks to the Blockbuster

Transformers movie sequel with

merchandise sales topping the 2007

product lineup that was from the first

movie by 25 now at this point Revenge of

the Fallen had already racked up 607

million dollars at the global box office

but the key here to understanding the

power of these films for Hasbro itself

is in the next paragraph industry

analysts forecast that this is in 2009

Transformers toy related sales including

licensing fees could be as high as 600

million dollars by Year's End if sales

hit that Mark this would be 25 above the

482 million in sales of the toys and

merchandise

for the first Transformers movie from

2007 and to give you an idea of how big

that number had grown from the days

where Transformers had fallen off the

map into the mid and late 90s this is an

article from the same year 2009 just

about six months later around December

of 2009 from NBC News Hasbro is

transforming how it sells toys when

Brian goldner arrived at Hasbro in the

year 2000 as CEO the toy and game maker

generated 30 million dollars from

Transformers when the films launched in

2007 Transformers became a thing again

and not just a thing but a huge thing 30

million dollars in total attributable

revenue to Transformers in the Hasbro

company in 2000 and seven years later

when the first movie came out that went

to almost 500 million dollars and then

when the second movie came out 600

million dollars but that's not all those

movies did combined the big screen hits

with the launch of Hasbro Studios which

is now E1 a Los Angeles unit that went

officially opens next fall that would be

2010 13 years ago now we'll develop and

produce content for movies Games

television and mobile platforms and it

seems that Hasbro is morphing into an

entertainment company so by now you can

see the impact that the movies have had

on everything else not only creating a

studio it Hasbro to create more movies

and more video games and more projects

for places like Netflix but also theme

park tie-ins at places like Universal

Studios and not to mention as we said

before a nearly two thousand percent

increase in merchandise and Licensing

for Hasbro going from 30 million a year

on Transformers just in 2000 to less

than a decade later increasing that to

600 million per year let's look at what

else happened in the years when Brian

took over about 23 years ago now Hasbro

can't scrimp too long to get the most

from its Brands the four billion dollar

company generally channels five percent

of its revenues into research and

development and roughly 10 percent back

into marketing the Investments says

Golder have helped the girls toy group

grow from six million dollars in

operating income in 2002 to more than

700 million dollars in 2008 that's 15

years ago so in other words you produce

content you put out movies you put out

shows for streaming services nowadays or

you license them out to broadband

Delivery Systems of maybe 15 years ago

when it began and you generate Revenue

basically having these streaming

services and these licensees pay for the

production costs of these shows and then

they go out and become giant

advertisements that somebody else has

paid for to go out and buy your toys and

of course those toys well that's where

the real real margin is that's where the

real money is made and that's exactly

the case with the Transformers movies

matter of fact if we look at a chart of

the most valuable intellectual property

franchises that we know of Transformers

is in the list of course with a roughly

25 billion dollar value and I should

stipulate that according to Wikipedia

who has collected the data Transformers

franchise Revenue up until 2011. only

three of the films come out of course

they've had a lot more films since then

and even if we assumed for a minute that

none of the films made money at the

theater and none of the films made money

even after they left the theater the

merchandise sales since 2011 is probably

easily another six to ten billion

dollars now another thing here is the

home video sales nearly a billion

dollars in home video sales for

Transformers alone and one thing I need

to remind folks is that yes while

streaming is incredibly prolific here in

the United States especially for

Transformers own distributor namely

Paramount Paramount like peacock has a

very small if non-existent footprint on

the rest of the globe especially in

markets where movies like Transformers

and Fast and the Furious for that

instance have their biggest Market

penetration that means that after they

leave the theaters they sell a lot more

copies of physical Media or premium

video on demand downloads digitally

versus here in the US and when they go

to streaming services in those foreign

countries licensing fees are coming in

from third parties as outside Revenue to

boost the value of the movies and the TV

shows they've created and of course

that's unlike a lot of things that

somebody like Disney puts out where

Disney plus has a footprint in almost

every single major international market

around the globe Disney continues to

consume their own products as opposed to

license them out for third parties to

get actual cash flows but if you want to

see a breakdown of what that Home Market

looks like for Transformers films after

they leave the theaters you can head on

over to the numbers and see it yourself

906 million dollars so far as the

numbers are aware of up to this point

and you can see that this is all iTunes

Voodoo Amazon Google this is not actual

physical media sales this is just pivot

and you can see further in this article

here from Bloomberg in 2018 when

bumblebee came out how the battling

robots of the Transformers built a 14

billion dollar Empire of course

referring to Hasbro's market cap at that

point all of these hugely popular

multi-generational toy lines needed

advertising and again Hasbro figured out

the most efficient way to do that is to

make you the customer actually cover the

costs of the advertisements to sell

their toys and it's brilliant certainly

the same could be said for a lot of

intellectual properties out there that

also engender a lot of merchandise sales

a lot of toy sales but this is one of

the few where this actually started out

as a toy and was turned into a movie to

sell the toys a lot of things like

Jurassic Park came along in the 90s and

became a massive merchandise seller a

massive toy seller Jurassic Park was so

brilliant that it basically now owns

dinosaur toys if kids want to go buy

dinosaur toys chances are they're going

to wind up buying a Jurassic Park or now

Jurassic world branded toy that falls

under the universal IP but things like

Transformers GI Joe My Little Pony

He-Man these were toy lines the

companies then created TV shows and

later on movies on down the road to

actually go back and sell more of these

toys and for Hasbro it's always been a

big success and more recently from The

Verge just a few months ago in 2023 the

new CEO of Hasbro Chris Cox he sits down

and talks about many of the issues with

Hasbro and trying to bring more of the

brands into the Forefront with media

marketing using things like television

streaming and movies the CEO of Hasbro

says I think the original rationale of

we have a brand blueprint and we want to

make content that injects it and then

drives it into merchandise sales still

holds if anything that has become more

important as people are focusing on

quality over quantity if they want to

have brands that break through that's

why Transformers continues to be a

blockbuster film franchise why Dungeons

and Dragons is seeing such a warm

critical fan reception in the early

previews and why we're seeing success

with the Hasbro portfolio as you think

about content spend and production it's

either I'm going to drive scale to

really be able to drive efficiency so

that I can have better margin structure

than my smaller competition or I have a

distribution platform that I need to

inject content into cost efficiently and

I want to have some IP and teams that

can do that so it all goes back to why

Hasbro created their own film and

Production Studio in the first place and

why they work with Partners like

Paramount and Netflix to effectively

distribute these things out there yeah

they can break even they cannot make any

money in the box office yes they will

make some money on the back end after

they leave theaters because the

countries that are most favorable to

these films in terms of the box office

don't have big streaming Footprints

there from places like peacock and

Paramount they have to be licensed out

not to mention the physical media and

pivot sales that those International

markets will juice into these kind of

Transformers films after they leave the

theater more than makes up for any

losses they might have but then most

importantly and this is the key thing it

drives massive numbers of toy sales

again in the year 2000 they were selling

30 million dollars worth of Transformer

merchandise not at the retail level of

course it was probably maybe double that

but coming back into Hasbro is about 30

million dollars and within seven to nine

years they had taken in more than 20

times that amount because of the massive

push they made simply by making a couple

of movies and Hasbro would be foolish to

stop doing this at this point unless of

course the toy sales went off the rails

but that's why each new film introduces

new characters because yeah we might

lose 50 or 60 million dollars at the box

office but we sold another 200 million

dollars of a gorilla Transformer last

year in Target so we'll be covering the

box office for Transformers rise of the

Beast this weekend and I will probably

give you a full film review of it myself

non-spoiler of course because I am going

to go see it tomorrow night and I hope

you'll stick around to see that one as

well let me know your thoughts in the

comments below are you going to be

interested to see this film join us on

the Sunday live show I'm sure it will be

a topic of conversation along with

everything else and until then take care

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