Negative Cost
The total cost of producing a film before marketing and distribution expenses, including all production and post-production costs.
Definition
Negative cost represents everything spent to create the finished film negative (or digital equivalent)—development, pre-production, principal photography, post-production, and music. It excludes P&A (prints and advertising) spent on release.
The term originated when films were completed on negative film stock. Though production is now digital, "negative cost" remains standard terminology for production budget versus distribution spending.
Why It Matters
Negative cost determines break-even calculations. A film must generate enough revenue to cover both negative cost and P&A before reaching profitability—understanding both is essential for investment decisions.
Industry reporting often cites production budgets (negative cost) separately from marketing spend. Comparing films requires knowing whether figures include only production or total investment.
Examples in Practice
A film has $80 million negative cost and $50 million P&A spend, requiring roughly $260 million in box office (at typical studio splits) to break even theatrically.
Studios increasingly rely on tax incentives to reduce negative cost. A $100 million production might have an effective negative cost of $70 million after rebates.