It’s no secret that the film industry is one of the most lucrative sectors in the world. Between blockbuster movies and multi-million-dollar franchises, movie studios enjoy high profitability rates. Film industry income can be difficult to track down, but with some research, we can explore major movie studios and their operating income.
Studios with profits higher in comparison to revenue are most profitable, and among these highest-grossing entertainment giants are Disney, Sony, and 20th Century Fox.
Income rates for movie studios have gone up steadily since the industry was established. This is primarily evident in the past few decades, as movie-making techniques and technological advances made it easier to produce sweeping blockbuster films that left audiences enchanted and wanting more. And in recent years, with the mass popularity of superhero films and science fiction genres, these profits will likely continue to rise.
But exactly how profitable are the movie industry and the films it produces?
In taking a closer look at the top movie studios and their output, we can determine just how lucrative the movie industry really is. Let’s start at the beginning—the early days of movies and moviemakers.
The Shine of a Thousand Spotlights: The Movie Industry
In order to investigate the popularity and profitability of film titles and movie studios today, let’s take a quick look back at the history of the movie industry throughout the years.
The industry began its first steps in the late 1800s after motion picture viewing technology progressed to a point where films could be reliably recorded and played back.
1891
Thomas Edison revealed his Kinetoscope.
1895
The Lumière brothers created the Cinematograph, a device that included a camera, projector, and film printer altogether.
By the early 1900s, the film industry was truly born and Hollywood was in the making.
What Were Movies Like Back Then?
The first films were very short, and were constrained to one-reel filming, which meant their runtime was typically only a few minutes or less. These films were screened for audiences in fairgrounds, early cinemas, and even music halls, and contained shots of local scenery and crowds, trains and boats, men and women working, and glimpses of foreign locations.
Although these films did not have synchronized sound until the 1920s, early movies still fascinated audiences and drew in crowds of enchanted viewers.
The Golden Age of Cinema
When you think of old Hollywood, this is likely the era you imagine—stars and starlets in their finery, flashing lights, and marquees shouting the latest film title to all the land.
In addition, cinemas became an elaborate extension of movie studios, with ornate “picture palaces” that could hold thousands of movie-goers in the auditorium.
Millions of people flocked to these movie theaters every week to see the latest Hollywood offerings. And because this was the only place for people to view films, as home video watching was not yet invented, if you did not catch the new film at the theater, you missed out on it completely.
And as more people paid to see these films, the movie industry was able to invest more money into production, casting, and distribution. The first large studios were created around this rise in revenue, leading to the giants of entertainment that we have today.
The Hollywood Studio System
Certain studios in Hollywood became the primary means of movie production, buying up large tracts of land in the valley and constructing massive sets for their projects. By the late 1920s and early 1930s, movie studios were purchasing theater chains and becoming fully in control of the American film industry.
Instead of being purely an art form, movie studios began to view filmmaking as highly statistical:
When distribution and ratings were good
More revenue would be gained for further projects.
These studios became financial movie kingdoms, slowly incorporating smaller and independent movie companies and producers. And by 1930, the final “Big Five” studios were firmly seated at the head of Hollywood’s movie-making.
These main studios and the executives that controlled them are still familiar to us today:
Darryl F. Zanuck
20th Century Fox
Harry Cohn
Columbia Pictures
Louis B. Mayer
Metro-Goldwyn-Mayer
Adolph Zukor
Paramount Studios
Carl Laemmle
Universal Pictures
Jack L. Warner
Warner Bros
The Studio System Effect
Though the studio system did experience a downfall in the 1940s, where their reach and control over theater chains were loosened due to “block booking”, these studios are still around today and continued to exercise serious control over the movie industry, actors, and filmmaking in general.
But after a 1948 lawsuit regarding antitrust policies, the heads of these big studios had to reform their systems to change procedures and studio dynamics when it came to releasing and distributing films to theaters.
After this antitrust lawsuit, the average budget for filmmaking rose quite rapidly, because the number of movies being made dropped.
So, movie studios needed to change their strategy—including when it came to the increasing popularity of TV broadcasting. Studios embraced the new reality of a television in every home and sold off a good amount of their theatrical film libraries and rights to be used for television broadcasting.
And as TV broadcasting adapted with serial programming, censorship laws became more relaxed, leading movie studios to try out more experimental material in their productions, including violence, graphic language, and adult themes.
The New Age of Film
As the 1980s and 1990s arrived, movie technology enjoyed another revolution—the advent of CGI and computer effects. And along with these technological advances, a new generation of directors and filmmakers came onto the scene.
These directors included many of the big names in film that we know and love today, such as:
Img Source: Wikimedia commons/ By squidish – Flickr, CC BY-SA 2.0; Wikimedia commons/ By nicolas genin – Flickr, CC BY-SA 2.0; Wikimedia commons/ James Cameron October 2012, CC BY-SA 3.0; Wikimedia commons/Martin Scorsese (8250485096); Wikimedia commons/ Georges Biard/ Roman Polanski; Wikimedia commons/ By nicolas genin – Flickr, CC BY-SA 2.0; Wikimedia commons/ Steven Spielberg by Gage Skidmore
These directors embraced foreign influence, “art house” productions, and risked different kinds of content—something that certainly paid off. By implementing new trends and the latest technology, blockbusters like Apocalypse Now, The Exorcist, and 2001: A Space Odyssey were created and received a massively warm welcome from adoring audiences.
This was the beginning of the skyrocketing increase in movie studio profits, as the film industry transformed their budgets into millions and billions of dollars, with over-the-top revenue to accompany it and fund further and larger projects.
Powerhouse Profiles: Exploring the Top Movie Studios
We can all identify the logos that accompany the biggest movie studios when the opening credits begin on a film, from the Disney castle to Universal’s earth as seen from space. They have been around for decades with ever-evolving forms as technology and styles progress. But what about the studios themselves that stand behind these popular logos?
Let’s take a closer look at the top movie studios in the industry and a bit about their backstories.
20th Century Fox
Originally founded by Darryl F. Zanuck, Fox was one of the more popular movie studios in the early days of Hollywood.
In fact, during the Second World War attendance was so high that Fox was able to overtake RKO and even MGM in revenue, becoming the third most profitable studio.
And Zanuck was even commissioned by the U.S. Army to oversee the production of training films for soldiers getting ready for the front.
However, Fox ran into financial trouble with the production of incredibly expensive films such as Cleopatra and Something’s Got to Give. Fox had to sell off the backlot to be able to fund these projects.
1965
But commercial success was back in Fox studio’s hands when The Sound of Music was a box office hit, even going on to win five academy awards including Best Picture.
1977
Audiences perhaps are most familiar with 20th Century Fox’s most profitable franchise—Star Wars.
At that time in 1977, it was the most profitable film made and continues to enjoy massive amounts of popularity and bring in consistent revenue.
In recent years, the Walt Disney Company acquired most of Fox’s assets, and changed the studio’s name from 20th Century Fox to 20th Century Studios. The studio continues to create content under the watchful eye of Disney and Disney+ streaming.
Paramount Pictures
The only member of the original “Big Five” studios to remain in the city of Los Angeles, Paramount Pictures was created by film producer Adolph Zukor and 22 actors.
Paramount was a movie studio that liked to emphasize its star power, contracting the most famous actors of the time to work under it.
Paramount was also the center of the antitrust lawsuit responsible for breaking up the studio-controlled theater system. The United States versus Paramount Pictures, Inc., suit revolved around the practice of “Block Booking” in movie theaters and ended pre-selling films and caused Paramount to cut back on annual movie production.
After this lawsuit, Paramount was the first studio to capitulate and split from their movie theater chains, bringing an end to the Hollywood studio system’s control.
Films like The Godfather and Footloose raked in commercial success for Paramount Pictures, but the studio was never a top earner when compared to the other major studios.
However, Paramount also has subsidiary holdings in Miramax, Nickelodeon, and MTV, widening the studio’s range and reach, and before DreamWorks came under the distribution of Universal, they were a part of Paramount Pictures.
Sony Pictures
Responsible for launching some of the most profitable film franchises, Sony Pictures is a true giant in the entertainment industry. They also owned the Marvel Cinematic Universe characters until Disney bought the rights to them in 2019.
Sony Pictures was an original member of the “Big Five” Hollywood studios and a member of the Motion Picture Association.
Formerly known as Columbia Pictures, and with a subsidiary company in TriStar Pictures, Sony also signed a first-look deal with Netflix this year, allowing Netflix to place Sony movies on the streaming platform immediately following the theatrical run. Sony has also recently signed with the Walt Disney Company to allow streaming of Sony films across Disney+ and Hulu.
Universal Pictures
Originally founded in 1912 by Carl Laemmle and his associates, Universal Pictures is the oldest member of the “Big Five” original Hollywood studios.
Universal City Studios enjoyed a reputation of being the biggest movie production facility in the world for a number of years, producing hits such as The Hunchback of Notre Dame and The Phantom of the Opera in the early 1920s.
Though Universal was originally very successful in terms of profit, Laemmle was a very cautious executive. Refusing to develop a theater chain like other studio heads were doing, Laemmle was also reluctant to accept financial assistance for his movies from outside his studio’s revenue, choosing instead to finance his own films.
After the Laemmle family lost control of Universal Pictures, Universal expanded its reach worldwide with distribution companies in France and Germany.
It was also around this time that Universal Studios was taken over by the world’s largest talent agency, Music Corporation of America (MCA).
And it became the incredibly successful, A-list movie production company that we know today.
The best actors and directors were contracted to Universal City Studios, Inc., such as Alfred Hitchcock, Doris Day, and Cary Grant, and the feature-length films coming from the studio were well-polished.
Universal’s adjoining theme park opened in 1964, providing the studio with additional tourism revenue, and once the studio paired up with DreamWorks in the late 1990s, their animated films took on an even greater role and enjoyed wider distribution.
Universal has spawned various secondary moving picture companies, such as Legendary Pictures, Gramercy Pictures, and Amblin Partners.
These subsequent companies work as arms of the original studio, concentrating on specific genres or international outreach. For instance, Gramercy Pictures is responsible for a large amount of Universal’s horror and science fiction titles.
Universal is also responsible for creating many successful franchises, including King Kong, Fast and Furious, Bourne, Insidious, and the Purge, which are all active to this day and continue to bring in plenty of revenue for the studio.
Walt Disney Pictures
One of the most popular studios in the movie industry, Disney has released a plethora of animated and live-action feature films beloved by audiences around the world.
Between the studio’s parks, merchandise, and movie catalog, Disney is a household name when it comes to entertainment and enjoyment.
Not just for children, Disney has produced a wide range of adventure, action, fantasy, historic, and emotional titles. Some of Disney’s highest grossing films include the Pirates of the Caribbean series, Alice in Wonderland, Zootopia, and Frozen.
After the launch of its streaming service, Disney+, content has been made even more widely available.
Disney bought the assets of 20th Century Fox in recent years, as well as the rights to the Marvel Cinematic Universe, and Spider-Man from Sony. All these characters and narratives have been added to the Disney parks in the U.S., France, China, Hong Kong, and Japan.
Warner Bros. Pictures
The studio that brought the first fully sound synchronized “talkie” movie in 1927, The Jazz Singer, Warner Bros. Pictures has been a popular film producer for decades.
Their subsidiary company holdings include Hanna-Barbera, DC Films, New Line Cinema, and even HBO Films.
Some of the most popular movie franchises today are the product of Warner Bros., including DC Comic films like Batman and Wonder Woman, the Hobbit movies, and the entire Harry Potter film series.
How Movie Studios Make Money
Profitability in the movie industry is not as easy or straightforward as it was during the early days of filmmaking and theaters, the top movie studios no longer rely primarily on ticket sales for income.
Instead, studios and filmmakers rely on other avenues of revenue such as the sale of TV rights, video-on-demand, streaming service contracts, merchandising, and other franchise profits. Not to mention the profits that come to studios who produce some of the highest-grossing films per year.
In order to fully understand how much the top movie studios are making, we need to explore some of the ways the film industry makes money, including film release revenue and merchandising.
You Had Me at the Title: The Highest-Grossing Films Ever Made
When it comes to making money on movies, inflation must be taken into consideration. Films from the 1960s and 1970s did make break-away profits for that time period, but when inflation rates are applied, it does change the profit.
For example, when the earnings of Gone with the Wind are changed to include inflation, not only was it the most lucrative film for twenty-five years when it was originally released, it is actually the highest-grossing film of all time.
Let’s take a closer look at some of the most profitable films made by the major movie studios that we have already discussed, and how much money they brought in worldwide.
20th Century Fox
Paramount Pictures
Sony Pictures
Universal Pictures
Walt Disney Pictures
Warner Bros. Pictures
Frankly My Dear, It’s Merchandising
When George Lucas started the Star Wars franchise in 1977, it was the beginning of true merchandising for films and film series. Through the sale of toys and other products associated with the Star Wars universe, and through licensing income from third-party suppliers who optioned the franchise rights, millions of dollars have been made off this franchise alone.
Though relying on merchandise does not apply to every film made, it is certainly a good way for studios to supplement their income from a particular movie, well beyond its initial release and theater run. Big-budget films and children’s films alike are excellent candidates for a range of purchasable products, from soft toys to home décor.
For example,
Imagine the billions brought in by retail sales of Disney’s Toy Story merchandise alone!
Streaming Services, Sales, and Studios
Instead of DVD sales, it’s all about television rights, streaming platforms, and video-on-demand (VOD) when it comes to making further profits.
Revenue from VOD deals can add multiple millions of dollars to the movie studio’s bottom line, including various VOD release strategies like day-and-date, where the movie is released at the same time in theater and on VOD. With streaming platforms, it is a newer venture for big-name Hollywood studios, but is proving to be lucrative.
When it comes to VOD, the revenue source for a particular movie tends to peter out the longer the film has been released—but through streaming services like Amazon Prime and Netflix, films of any age can make plenty of revenue by streaming even years after the initial release.
It is important to note that as streaming services gain more licensing and add more titles to their platforms, and even if the price of subscriptions go up, it’s likely that traditional movie theaters will experience a decrease in patronage. This is also true for other types of screen entertainment, such as video games or YouTube.
The foreign sales of films are another source of studio revenue. Selling the distribution rights to countries around the world is a good way to cover the cost of the production budget and bring in more profits.
The bigger the stars in the film
The better chance of selling to more foreign countries
Indeed, some Hollywood films actually make more money on the international market than they do in the U.S.
Finances and Filmmaking: What the Most Profitable Movie Studios Make
We have finally gotten to the initial question—how much do the most lucrative movie studios actually make? Given all the aspects that go into revenue and the types of sales that profit the big studios most, this question requires a comprehensive answer.
Based on the most recent fiscal and end-of-year reports available online, the following information outlines the profitability of the top movie studios today:
20th Century Fox
Before 20th Century Fox was purchased by the Walt Disney Company in 2017, the studio enjoyed a median revenue of $492.16 million, giving the figure of $15.59 in earnings per second.
Paramount Studios
According to the last recorded fiscal report, Paramount Studios earned a combined $563.9 million, meaning that the studio’s per second net gain is $17.87. This is on the low end of the scale and is primarily because the studio was relying on certain tentpole titles to boost income, which ultimately did not perform as well as anticipated.
Sony Pictures
Sony Pictures comes in as the top earner in this array of studios, earning a staggering $9.316 billion in USD. This works out to a whopping $295.21 in profits per second, which is mind-blowing!
Universal Pictures
Universal Pictures is one of the most profitable movie studios, combining their studio theme park with box office revenue to be very lucrative. However, with the impact of Covid-19 on travel, the park was unable to make as much money as it typically did. Universal’s 2020 annual income totaled $3.3 billion, which means the studio made $117.25 every second.
Walt Disney Pictures
Walt Disney Pictures had a great fiscal year, raking in $3.72 billion in profits. This works out to $117.88 in profits every second of each day. This is quite similar to Universal Pictures, but with the pandemic’s negative impact on Disney Park visitors, the studio has not been able to make as much profit off park guests.
Warner Bros. Pictures
And lastly, Warner Bros. Pictures is also on the higher end of the scale for studio profits, coming in at $8.19 billion, which gives the studio per second earnings of $259.53.
What the Most Profitable Movie Studios Make Per Second in a Year
In terms of profitability, movie studios and the film industry are incredibly lucrative. But like any other sector, movies and filmmaking can experience fluctuations in revenue, which means that studios around the globe continue to flock to theaters, stream titles at home, and purchase their favorite film’s cannot rely on ticket sales alone for income.
Most movies are a risky investment, no matter the number of famous actors cast in them, but because audiences merchandise, the movie industry has enjoyed a steady rise in prominence, power, and profits.
