CFI - Cinematic Forecasting and Investment Assurance LLC ™

ANALYSIS of CFI MOTION PICTURE RETURN ON INVESTMENTS (ROI)

We created financial portfolios for every motion picture forecast by CFI as profitable in the last nine years. 

1. Gross profits were calculated for combined domestic and foreign films that scored profitable on the CFI Motion Picture Index (MPI).  These were films that contained positive and negative component  formulations, but had fewer negative valuations than positive valuations, and therefore were forecast as profitable before they were released.

2. Domestic box-office revenues were calculated using an average multiplier of 0.55%.  Foreign box-office revenues were calculated using an average multiplier of 0.43%.  (These are average revenue percentages reported by studios.)

3. Another 45% of that revenue was subtracted for studio distribution expenses to arrive at a combined U.S. and International income.  (30% is the average studio level distribution expense deduction, but for independent filmmakers the expense averages up to 45%.  To see the ROIs for independent films using the higher distribution expense percentages, please see CFI web pages 7.7 through 7.11)

4. Once the production budget was determined, we then increased that amount by 100% to account for the advertising, prints and marketing expenses.  The MPAA reports the percentage for the average marketing expenditure at 60% of the picture's budget.  (60% is also a studio level expense.  For independent filmmakers, the expense averages up to 100%.  To see the ROIs for independent films using that higher marketing and advertising expense percentage, please see CFI web pages 7.7 through 7.11)

(For budget amounts we used production numbers provided by Variety, The Hollywood Reporter, Boxofficemojo.com, IMDB.com, the LA Times, and the Wall Street Journal. We used a budget amount if at least two of the reported sources were in agreement.)
 
5. The total of the budget costs and the marketing/advertising expenses were subtracted from the combined U.S. and foreign income.  The remainder was the gross profit.

6. The gross profit was divided by the budget costs and the marketing/advertising expenses to express the ROI - the percentage of the films' financial return on the investment.

Cinematic Forecasts and Investor Assurance Return On Investment (ROI)

The ROI for each year of the last 10 years were as follows; 

If you had invested in the scripts CFI selected as profitable BEFORE they were produced (including the average ancillary revenue estimates with the domestic & foreign box-office actuals) ... while using the extra-large expense margins we subtracted from the income, the ROIs per year would still be as follows;
 
2000: +23.14%
2001: +26.21%
2002: +17.90%
2003: +31.11%
2004: +31.17%
2005: +58.41%
2006: +12.56%
2007: +15.56%
2008: +21.41%
2009: +74.27%
2010: +58.18%
The eleven year average return on investment for CFI audited scripts is + 33.6%

 
If you had invested in the scripts CFI audited before distribution that had NO component formulation errors, (including the average ancillary revenue estimates with the domestic & foreign box-office actuals) while subtracting the extra-large expense margins, the ROIs per year would have been as follows;

2000: +40.43%
2001: +58.12%
2002: +22.91%
2003: +29.20%
2004:    -1.94%
2005: +17.26%
2006: +16.97%
2007: +41.08%
2008: +60.10%
2009: +172.35%
2010: +52.97%

The eleven year return on investment for ERROR FREE scripts audited by CFI is + 46.3%

(Lower returns in 2004 to 2006 were due to consumer's investments in DVDs, rather than attending theaters for secondary ticket sales.  Financial returns for 'AVATAR' in 2010 were not included, and thereby do not skew the financial percentages.)

The 2011 numbers are not given, since a percentage of the profitable productions are still in theatrical release ... and more are yet to be released in foreign marketplaces.