[dahart]

> Most of them have trouble ever making a profit

If that were true, most of the big-budget movie studios would be going out of business regularly. But that isn’t happening, by and large. They do sometimes want you to think they’re not making money. Having worked in the film & games industries, I’ve witnessed some of the creative accounting that gets used.

> do we really need big-budget movies? They seem like a total waste.

Well, people pay for them, and our IP laws are designed to protect the business of creations and inventions. Most of the pharma industry is also peddling stuff we don’t need and is wasteful, however it is big business.

[rpdillon]

They do make some money!

> Here are the combined financial figures for all 29 Hollywood blockbusters (budgeted over $100m)…

> Total combined budgets: $4.37 billion

> Total combined costs (including budgets, marketing and all other costs): $11.52 billion

> Total combined income (from all revenue streams): $11.95 billion

> Profit across all movies: $428.9 million

> An average profit of $14.8 million per movie

The whole thing is an interesting read!

https://stephenfollows.com/how-movies-make-money-hollywood-b...

[dahart]

It is interesting, but should be taken with a couple pretty big grains of salt IMO. It does a good job of discussing the many varied sources of cost and income. But the secret unsourced data of unnamed movies that is “trust me” better than what’s on Wikipedia and Box Office Mojo… really big red flag. I absolutely do not buy that the average profit is 3.7%. I worked on one of the movies he discusses (Shrek 2) and the paragraph about it is misleading, which for me makes me wonder how many other paragraphs are misleading. I also worked for a 2nd major film company and watched first-hand how they account for production budgets, which can involve trading costs with other nearby productions to make the expenses appear larger in order to do things like justify restructuring decisions, hide gains and losses, divert money toward or away from bonus pools. What really happens is impossible to know even as an insider, but the outcomes of this industry reveal that despite what they claim, it’s quite healthy for the big-budget crowd.

[bruce511]

It's worth understanding that "profit" is usually not the goal, and in any business can be easily made to go higher or lower.

For example if I want my business to make more profit, I can stop paying me a salary. I can just take the same money out as profit. Or vice versa. Ultimately I end up optimising my salary/profit ratio according to the tax laws.

Notice the studios managed to spend 8 billion on "other stuff". That's not "profit" (so less to pay people who have profit share) but it certainly went somewhere. And those feeding at the $8b trough certainly view big budget movies as a massive win.

Sure Hollywood Accounting is well known, but it's no different to any business. Profit is a meaningless number and ultimately the flow of money is optimised for many other things.