Hugh Pickens writes "Scott Harris writes on Moviefone that the economics of Hollywood are often baffling, as DVD sales, broadcast fees and merchandising tie-ins balance against advertising costs and pay-or-play deals to form an accounting maze. The latest example is the untitled sequel to The Chronicles of Riddick, released in 2004 to a slew of negative reviews and general viewer indifference. Despite its hefty $105 million budget, most of which was spent on special effects, the film topped out at a paltry $57 million domestically. So how can a sequel be made if the movie lost money? The answer has to do with ancillary profits from revenue streams outside the box office. While the combined $116 million worldwide probably still didn't cover distribution and advertising costs, it likely brought the film close to even, meaning DVD sales and profits from the tie-in video game franchise may have put the movie in the black. In addition, Riddick itself was a sequel to Pitch Black, a modestly budgeted ($23 million) success back in 2000. Extending the franchise to a third film may help boost ancillary profits by introducing the Pitch Black and Chronicles of Riddick DVDs and merchandise to new audiences, meaning that the new film may not even need to break even to eventually turn a profit for the studio."
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