Gal Gadot’s ‘Heart of Stone’ came with a lavish price tag.
Netflix
Anyone of a certain age will be able to remember a time when reviews in newspapers could make or break the fortunes of a film. As much as some newspapers might not want to admit it, those days are over and streaming played a starring role in bringing them to an end.
In the pre-internet era potential viewers didn’t have much choice but to base their decisions on newspaper reviews. Magazines tended to be monthly so they often missed the boat and although viewers could rely on word of mouth that wasn’t possible if they wanted to be the first to see a movie.
Online reviews and social media reactions completely changed this landscape as they enable potential viewers to base their decisions on feedback from their peers.
Streaming platforms shook it up even more with their groundbreaking pricing model which sees subscribers paying flat monthly fees in return for unlimited access to a studio’s library. As they don’t have to pay per view there is no financial risk with watching a movie which isn’t up to scratch. In turn, there is less of a need for reviews, whether online or in print, as viewers can instead watch the movies or shows and make their own minds up.
The only obstacle studios face is getting viewers’ attention as there are thousands of titles on streaming libraries with Netflix having one of the biggest. It is why masterpieces which lack A List actors can fly under the radar as this report explained. Conversely, it can cause mediocre movies or shows to become blockbusters if they are headlined by big names.
One of the best examples of this trend is 2023 spy action thriller Heart of Stone. The movie starred Gal Gadot and was billed as being a rival to Mission: Impossible so it had everything going for it.
The plot of the film sounds like it has come straight out of the latest instalments in Tom Cruise’s spy series. Gadot plays an intelligence operative who takes on a dangerous mission to protect a mysterious AI system known as The Heart and stop it from falling into enemy hands. It also featured Glenn Close and BD Wong though this star power didn’t make it a dream ticket with critics.
They gave it a rating of just 31% on review aggregator Rotten Tomatoes with the critics consensus saying that “Gal Gadot remains an entertaining action star, but she’s no match for Heart of Stone’s thinly written characters, generic plot, and rote set pieces.” Audiences weren’t much more generous and awarded the movie only 50%. However, against all the odds, it rocketed up the Netflix rankings.
Gal Gadot was the big name draw in ‘Heart of Stone’. © 2023.
Courtesy of Netflix
After only two days on release the film hit number one on the Netflix English-language list with 33.1 million views. By the end of the year it became the second-most watched Netflix film in the second half of 2023 with 109.6 million views. It didn’t come cheap as Heart of Stone was also one of the most expensive movies ever made by the streamer.
ScreenRant claimed that the movie had “a budget upwards of $150 million” and it wasn’t wrong. However, exactly how much more than $150 million was spent by Netflix has never come to light. Until now.
Like most other spy stories, Heart of Stone is set in a string of exotic locations from Italy to Iceland. However, it was actually filmed at Shepperton Studios in London and this shines a spotlight on how much Netflix spent on it.
The cost of movies made in the United States is a closely-guarded secret as studios combine the cost of them in their overall expenses and don’t itemize how much was spent on each one. It’s a different story for films made in the United Kingdom.
Studios filming in the U.K. benefit from the government’s Audio-Visual Expenditure Credit (AVEC) which gives them a cash reimbursement of up to 25.5% of the money they spend in the country. However, it comes with a catch.
To qualify for the reimbursement, movies must pass a points test based on factors such as how many of the lead actors are from the U.K. and how much of the production work is done there. Furthermore, at least 10% of their core costs need to relate to activities in the U.K. and in order to demonstrate this to the government, studios set up a separate Film Production Company (FPC) there for each picture.
This lifts the curtain on precisely how much it costs to make movies as each FPC has to file financial statements. It takes a bit of detective work to get to the bottom of them.
The FPCs usually have code names so that they don’t raise attention with fans when filing permits to film on location. Tallying the code names with the productions they are responsible for requires deep industry knowledge which my colleague and I have built up over nearly 15 years of reporting. We are the only journalists worldwide who specialize in covering the financial statements of U.K. film production companies for national media and we have reported on them for more than 10 leading titles including The Times of London, The Guardian, The Daily Telegraph, The Independent and the London Evening Standard.
Once the code names have been correctly tallied with the films, the financial statements of the relevant FPC can be consulted to reveal how much the movie cost to make. That’s because the terms of the reimbursement state that each FPC must be “responsible for pre-production, principal photography/shooting and post-production of the film; and for delivery of the completed film.” In short, the FPC’s financial statements have to show the production’s entire costs, not just those incurred in the U.K. Studios aren’t allowed to hide costs in other companies as the terms also state “there can only be one FPC in relation to a film.”
The Netflix subsidiary behind Heart of Stone is called Get Back Pictures and, as with all U.K. companies, its financial statements are released in stages long after the period they relate to. This starts during pre-production and continues after the premiere to give the production team time to ensure that all the bills are paid.
It explains why the latest set of filings were filed last month and cover the year to December 31, 2024 which is more than a year after the movie was released. The filings show that by then it had cost a total of $219.3 million (£175.4 million) which was “in line with the agreed budget.” Nevertheless, that wasn’t the end of the story as the government reimbursement packed a powerful punch.
The reimbursement is calculated on up to 80% of core expenditure so in order to get back the maximum 25.5% of the money they spend in the U.K., production companies need to ensure that 20% of their core costs are spent outside the country.
Netflix made the most of this as it also filmed Heart of Stone on location in Iceland, Italy and Portugal. The incentives on offer there aren’t as generous as in the U.K. so their impact on the bottom line doesn’t tend to be material, especially as they can only account for up to 20% of core expenditure without studios losing out on the more lucrative reimbursement.
Filming locations included Italy and Iceland, as well as the U.K. © 2023.
Courtesy of Netflix
The financial statements show that Netflix banked a $21.1 million (£16.9 million) reimbursement bringing its net spending on the picture down to $198.2 million with one of the biggest expenses being the $13.4 million (£10.7 million) in staff costs. The crew peaked at a monthly average of 127 employees which doesn’t even include freelancers, contractors and temporary workers. They aren’t listed as employees on the books of U.K. companies but often represent the majority of the crew on a film shoot.
The latest data from the British Film Institute (BFI) shows that in 2019 film making generated 37,685 jobs in London and 7,775 throughout the rest of the U.K. The BFI’s triennial Screen Business report added that when the wider impacts of the film content value chain are taken into consideration, 49,845 jobs were created in London in 2019 and 19,085 throughout the rest of the U.K.
In February the BFI released its latest annual data which showed that foreign studios contributed a massive 87% of the $2.6 billion (£2.1 billion) spent on making films in the U.K. in 2024. Between 2020 and 2023 Netflix alone invested almost $6 billion in the U.K. shooting shows and films there. However, it remains to be seen how long the U.K. will continue to get a glow from attracting American studios away from their home country.
In May President Trump rocked Hollywood with the announcement that a 100% tariff will be applied to movies entering the United States that are produced in “foreign lands”. It was an attempt to bring film making back to the U.S. and although it has yet to be implemented, it hasn’t been forgotten.
Last month Trump wrote on social media that “in order to solve this long time, never ending problem, I will be imposing a 100% Tariff on any and all movies that are made outside of the United States.” If he doesn’t follow through with this threat, he may have to roll out the red carpet by offering blockbuster fiscal incentives for film-makers in order to tempt them away from the U.K.