| What hollywood has going for it, is a track-record of executing on the operations behind producing movies that make money. People who invest in movies invest for the same reasons all of us invest in anything-- to make money. Hollywood is a business, albeit one rooted in entertainment, but let's face it-- many artists are also just in it for the money. I don't think our world view of "entertainment" is going to shift the way that YC suggested in it's call for action. I think most of us (unfortunately) are still going to want to watch movies like Transformers 3 at a $200 million budget than a $1million dollar indie flick. So, once we've recognized that uprooting involves figuring out how to finance movie production instead of shifting the realm of entertainment (at least, for our generation, perhaps future generations will just want to watch WOW and starcraft online), then we're getting somewhere. Unfortunately, figuring out a way to finance a film that costs tens or hundreds of millions to produce is a pretty tricky endeavor. Still, it will be pretty awesome when Brad Pitt signs onto his first crowd-sourced flick =) |
Movies do not have a typical accounting structure and that impacts their budgeted "costs".
In a typical collaborative venture with some degree of risk one might expect for most of the principals (director, actors, etc.) to take most of their compensation in the form of profit sharing. However, this is untenable in Hollywood because the standard is to use a fucked up accounting structure which results in most movies showing no profit on paper. Instead, a small number of people end up taking home a percentage of the gross revenues of the movie and most of the earnings for everyone else are upfront in cash.
This has several negative effects. For one it makes any movie staring a big star very much more expensive because you have to pay them $x million out of pocket. Also, because it raises the budget floor for making a top tier feature film it forces the industry to take fewer perceived risks, because a financial loss would be more devastating.
But this is only Hollywood's poisonous culture, not a fundamental aspect for making films. A production company that was founded on firmer and more ethical financial ground could implement proper profit sharing for actors, directors, other creatives, and even effects houses. It would allow movies to operate on lower budgets and embrace higher risk projects.