When you think of the most profitable movies at the box office, you probably think of the Hollywood blockbusters - films that grab headlines because of their huge budgets and equally huge profits, like "Avatar," "Titanic" and "Pirates of the Caribbean." However, when it comes down to it, these aren't the movies that bring in the most return on investment for their respective film studios.
In Pictures: 6 Ways To Save Money This Summer

Most of the time, movies with smaller budgets provide studios with the most bang for their buck, if the film reaches a profitable state. We'll take a look at the top 20 movies that have provided the biggest return on investment (ROI) (according to industry info website, The Numbers), and the ones that have been the biggest Hollywood flops, to find the movie genre that consistently provides the best returns. After the dollar value of the international gross is divided by the movie budget, this value is divided by two to obtain the percentage return; this extra step is conducted in order to determine the approximate funds that are returned to the movie studio. It should be noted that The Numbers' statistics are rough estimates of budget and box-office income, and DVD sales and rental income are not included. (Do the characters in these classic films reflect what it's like to work on Wall Street? Find out in Financial Careers According To Hollywood.)

  • Action Adventure
    Action adventure movies make the big headlines with the record-breaking ticket sales. However, huge ticket sales are usually matched by huge budgets, which means that these movies bring in a lot of money, but not the best ROI. For instance, to date, "Avatar" has made over $2.7 billion, yet its ROI is "just" 500%, as compared to lower-budget action film "Mad Max" (1979), which returned 24,837.5%. In the top 20 movies that have the best ROI, you won't see any of the blockbusters you'd imagine, and "Mad Max" is the only film of its kind in the top 20.

    However, in the lowest ROI, there are a couple of action movies that come up. "Southland Tales" with -98.93% "Outlander" was -98.75%, "Boondock Saints" at -98.21%, "D-Tox AKA Eye See You" at -98.36% and "I Come With The Rain" at -98.26%. So, although action, adventure and fantasy movies can be huge money-makers, when it comes to box office sales, they don't provide the best return.

  • Drama, Romance and Comedies
    Dramas and romance don't typically have huge budgets for special effects and sets, so when one really takes off, it can make an incredible ROI. The movie "Once" was made on a shoestring budget ($150,000) and took off, gaining Oscar nominations in the music category and taking in nearly $19 million. Overall, it has the 10th-highest ROI at 6,232.39%. George Lucas' second film, "American Graffiti" is number nine on the list at 8,909.01%, "Napoleon Dynamite" is at 12 with a 5,667.62% return on its $400,000 budget, and the classic "Gone With The Wind" is at 15 with an ROI of 4,906.73%.

    However, it's not all bright spots for dramas, romance and comedies – there are also a lot of box office failures. The Matt Leblanc war-comedy "All The Queen's Men" stands as the movie with the worst ROI of all movies, with a -99.92% return – do the math: it got back .08% of its budget. Other dramas didn't fare much better: "Imaginary Heroes" had a limited release and saw an ROI of -98.55%, costing $10 million and taking in $290 thousand at the box office; the star-studded bust "Winter Passing" is at -98.37%, and joins five other box-office busting dramas in the top 20 worst ROI. (Common mistakes can prevent even the smartest investors from beating the market. Find out how in Brains Don't Always Bring The Bucks.)

  • Documentaries
    With little in the way of cast, crew, special effects or big name stars, documentaries can often be made for a tiny fraction of what it costs a big-name Hollywood film, and when these films become popular, the ROI is astronomical.

    The film "Tarnation," which is pieced together from videos the filmmaker recorded throughout his whole life, had a reported budget of $218. However, take that "budget" with a grain of salt, as it is the amount that it cost the filmmaker to make the movie, but does not reflect the amount for marketing and distributing the film. Still, taking that number as a rough estimate of the film's costs to create, the ROI is 266,416.97%. This film is only beat out by one on the ROI list. Following "Tarnation," in fourth spot, is the anti-McDonald's film "Super Size Me," which cost $65,000 and had a return of 22,614.90%. There are no docs in the bottom 20 for ROI.

  • Horrors and Thrillers
    Horror is another genre with a lot of huge ROI hits and few misses. The number one movie for ROI is the hit "Paranormal Activity," which was made for $15,000 and had a box office gross of $161,830,890 for a return of 539,336.30%. "The Blair Witch Project" gave the studio a lofty 20,591% return. "Night of the Living Dead" comes in at six with an ROI of 13,057.89%, "Friday the 13th" is (coincidentally?) at 13, with 5,332.24%, "Open Water" follows at 5,110.09%, "Saw" comes in at 18 with 4,195.68% and "Evil Dead" closes out the list at 3,820.00%. Horror makes a much smaller appearance in the bottom 20 for box office ROI. (In 1983, an expert trader decided to coach 14 novice traders. The results were astounding - read them in Turtle Trading: A Market Legend.)

Bottom Line
Though The Numbers might not be precise, it gives a good estimation of the movie genre that can provide the best ROI at the box office. Some of these films did get limited release and went on to make a lot of money through sales and rental, but many of them simply lost their respective film studios buckets of cash. Overall, horror movies consistently have the most films in the top 20 for ROI and the least in the lowest 20 ROI, while drama is the exact opposite, having just two in the top 20 and dominating the bottom 20. Documentaries can take off, and even if they don't, they won't have the incredible losses that come with big Hollywood names and big Hollywood budgets. (The glitz and glam of Hollywood could help put some more glitz in your pocket. Find out how in Analyzing Show Biz Stocks.)

If you're still feeling uninformed, check out last week's business highlights in Water Cooler Finance: Auto Hope, Bubbling Oil and Obamanomics.

Related Articles
  1. Stock Analysis

    The Top 4 Companies Owned By Sony (SNE, ERIC)

    Learn how Sony Corporation became a leader entertainment. Music acts such as Beyoncé and movies such as "Spider-Man" are part of Sony's success story.
  2. Stock Analysis

    Analyzing Dish Network's Return on Equity (ROE) (DISH, TWC)

    Analyze Dish Network's return on equity (ROE), understand why it has vacillated so greatly in recent years and learn what factors are influencing it.
  3. Professionals

    Is A Stockbroker Career For You?

    Becoming a stockbroker requires a broad skill set and the willingness to put in long hours. But the rewards can be enormous.
  4. Stock Analysis

    Tribune Media: An Activist Investment Analysis (TRCO)

    Learn more about the breakup of Tribune Company, once a powerful newspaper and broadcasting giant, and the role of activist investor Cliff Robbins.
  5. Professionals

    Buy-Side vs Sell-Side Analysts

    Both sell-side and buy-side analysts on Wall Street spend much of their day researching companies in a relentless effort to pick the winners.
  6. Professionals

    Broker Or Trader: Which Career Is Right For You?

    Both brokers and traders buy and sell securities, but there are some subtle differences between the two careers.
  7. Fundamental Analysis

    The World's Top 10 Entertainment Companies (CMCSA, CBS)

    Take a look at the world's top 10 entertainment companies, spanning the movie, television, cable television, gaming and streaming video sectors.
  8. Stock Analysis

    The Biggest Risks of Investing in Dish Network Stock (DISH)

    Get insight about the potential risks of investing in Dish Network stock, such as its lack of cross-selling ability as an independent pay-TV provider.
  9. Professionals

    A Day In The Life Of A Public Accountant

    Here's an inside look at the workdays of two experienced CPAs, to give you an idea of what it might be like to pursue a career as a public accountant.
  10. Professionals

    A Day in the Life of a Public Accountant

    There’s no typical day in the life of a public accountant, but one accountant’s experience may shed some light on what the career entails.
RELATED FAQS
  1. Do financial advisors have to find their own clients?

    Nearly all financial advisors, particularly when new to the field, have to find their own clients. An employer may provide ... Read Full Answer >>
  2. Do financial advisors get drug tested?

    Financial advisors are not drug tested by any federal or state regulatory body. This means you may receive your Series 6, ... Read Full Answer >>
  3. Is a financial advisor required to have a degree?

    Financial advisors are not required to have university degrees. However, they are required to pass certain exams administered ... Read Full Answer >>
  4. Do financial advisors have to be licensed?

    Financial advisors must possess various securities licenses in order to sell investment products. The specific products an ... Read Full Answer >>
  5. Do financial advisors need to meet quotas?

    Most financial advisors are required to meet quotas, particularly if they work for firms that pay base salaries or draws ... Read Full Answer >>
  6. Does a financial advisor need an MBA?

    Obtaining a license as a financial adviser does not require an Master's of Business Administration (MBA) degree. The Certified ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center