The Baffling Economics Of Avatar 2

By now, I’m sure you’ve all heard about Avatar 2 and its massive breakeven of $2 billion. But, estimates suggest that the production cost of Avatar 2 was only $250 to $450 million, so what’s happening to the other $1.5 to $ billion? Well, this can be explained by a couple of factors starting with theater splits. Theater splits are set up to benefit films that have massive opening weekends and first few weeks like Marvel films, but the Avatar series thus far has tended to be a slow burner. This means that Avatar must earn more at the box office to retain the same amount of earnings. Aside from unfavorable domestic splits, Avatar also suffers from massive taxes and fees outside of the US. And given that 70% of the film’s revenue thus far has come from a global audience, this significantly impacts their margins. Finally, there are also fees such as marketing, royalties, interest rates, currency exchange fees, and distribution fees. This video explains Avatar’s top expenses when it co