Apple Finally Has a Hit Movie, But at What Cost?
Last week, I outlined Apple's feature film prospects heading into the launch of their new Brad Pitt-starring F1 movie as follows:
Apple’s feature film situation, to date, has been a mess. And that’s putting it lightly. First and foremost, with a few exceptions, the movies just have not been any good. Sure, that’s subjective on a movie-by-movie basis. But as a collective, it’s less subjective and more just a problem. At least somewhat related, none of the movies have performed well at the box office. That’s not subjective. *None of them.* Part of that is marketing — which yes, is a weird problem for Apple, of all companies, to have — and so they’re clearly pulling out all the stops for F1, their latest and best attempt at success at the movies.
Well, it seems to have worked. At last – as long predicted – a box office victory for Apple. Well, call it winning lap one, perhaps. Still a win is a win. And the F1 opening box office results are clearly a win, per the numbers Pamela McClintock is reporting for The Hollywood Reporter:
The Formula One movie — directed by Joseph Kosinski of Top Gun: Maverick fame and starring Brad Pitt — earned an impressive $25 million on Friday from 3,661 theaters for a North American opening in the $55 million-$58 million range, well ahead of expectations. Friday’s haul included a hefty $10 million in previews.
Warner Bros. is distributing and helping Apple to market the big-budget summer tentpole, which is tipped to earn another $85 million overseas for a global start of at least $140 million — supplanting World War Z’s $112 million to mark the biggest worldwide launch of Pitt’s career, not adjusted for inflation. F1 has a huge advantage in having a lock on Imax screens for three weeks, in addition to playing in other premium large-format screens, including Dolby Cinema, for part of that time. (On Friday, 58 percent of ticket sales were for premium auditoriums). One major caveat: the movie sports a hefty production budget of at least $200 million before marketing, so it will need to keep the pedal to the metal in the weeks ahead if it is to make its money back.
It could touch $60M once the total tallies are done, which would be a solid $10M above even the highest analyst expectations (and far higher than Warner Bros. – which helped distribute and market the movie – own obviously sandbagged expectations). It's by far the biggest box office opening for Apple, as it will at least double what Killers of the Flower Moon took in a couple years ago.1
So far, so great. But.
Most of the reporting (and whispers) suggests that the production budget of "at least $200 million" is likely quite a bit higher. Perhaps closer to $300M. Perhaps more. Certainly more with the marketing spend factored in. As such, the movie likely needs to make something well above $700M to break-even. That's because of the cut that goes to theaters but also here the cut that goes to Warner Bros.
If you go by the general rule of thumb that the full domestic box office for this type of movie will usually be 2.5x to 3x the opening weekend numbers, we're looking at a domestic total of something in the $150M to $180M range. But that will likely be boosted higher by the aforementioned IMAX run. So it certainly seems like $200M+ could be possible here. For worldwide, the math is similar with a $350M to $450M tally looking most likely.
Not to dump cold water on this strong opening, but that would obviously not be good for Apple. As that would be perhaps half of what they need to make in order to break even. And if it does play out that way, that might very well be the end of Apple's foray into theatrical once Tim Cook takes one look at such numbers.
Of course, Apple gets to use different math than a typical Hollywood studio here when calculating the ROI. The hope is that F1 creates the fabled "halo effect" around Apple's brand as it relates to entertainment, and big theatrical releases boost that effect – even if they don't boost Apple's bottom-line. Still, what they want and need to avoid here are the headlines that this was another box office bomb, and they have successfully turned around the narrative in week one. The question is how the total run will be framed. And again, there's still quite a lot of risk there when you just extrapolate out the numbers. Yes, even though they're considered good in week one! It's all relative!
What Apple needs is for word-of-mouth to kick in to ensure that F1 continues to operate beyond the norms. The second weekend will be the key indicator, if the box office drops 50%+, F1 is in trouble for that longer term. If the drop is more like 30%, that would be great news for Apple, as they will have a shot at a legitimate hit. Or, at least, making their money back while avoiding negative headlines down the line.
But beyond recouping the actual cost here, you also have to wonder what this opening cost Apple in terms of brand. Because they pulled out all the stops in marketing this to their audience, there's been quite a bit of backlash. And you can say that won't matter longer term, but people still talk about the free U2 album sent to iPhones promotion years later. It was not a great moment for Apple and neither was this.
As I wrote last week:
And so now it all comes down to F1. Which, again, looks and sounds good. But as anyone who follows movies knows, often that's not enough. It has to be marketed correctly. Which is where Apple has been stumbling. So again, they're pulling out all the stops here. Magazine spreads for Tim Cook and Lewis Hamilton. Brad Pitt stops in Apple Stores. WWDC sponcon. And yes, push notifications.
Beyond all of the above,2 yesterday I opened the Apple TV app on my phone to be greeted by a full screen pop-up imploring me to buy tickets for F1. This is the kind of stuff we're used to on many websites, obviously. But not from Apple. Many people feel like they're paying a premium for Apple products so as not to get such promotion shoved into their faces. Even more insulting: the note that by clicking on the link, it would take you to the web to pay for the ticket.3
All of this shows just how badly Apple wanted and needed F1 to be a hit. And it worked – at least in week one. So the next logical question is if Apple now feels the need to do this type of marketing to their audience for every release going forward? If so, that's undoubtedly going to turn off some subset of their audience. Fast.
And again, the bigger question is if F1 turns into an actual hit for Apple, or just a great opening. If it's only the latter, it would obviously be due to the budget and so it may take the company back to that particular drawing board.
All I'm saying is maybe hold off on a full victory lap, Apple.4 This was the equivalent of winning lap one. Still impressive, but there's a lot of racing to go...
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 And while it will be a worldwide record for Brad Pitt, it will likely fall just shy of the $66.4M that World War Z opened to domestically in 2013. Of course, if adjusted for inflation, that opening would look more like $85M in 2025 dollars. And actually, using such an adjustment, F1 would likely fall to fourth on Pitt's best box office openings list, behind Mr. & Mrs. Smith and Troy as well. Yes, box office records that don't take into account inflation are bullshit.
2 Also, promotions in Apple Music and Fitness+!
3 This is especially weird since as a physical good, Apple presumably wouldn't take a cut of the sale of a movie ticket, so why not handle it in-app to make it more seamless? Nobody knows. But it at least gives the appearance that Apple is trying to circumvent their own rails for some reason. And it naturally calls attention to that issue. Again.
4 Press release in 3... 2... 1...