Originally posted by JoeNYC
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Studios write off all kinds of costs to films which never show in the budget. They are big machines and there is a lot to pay for. But the key in so, so many ways is how they handle the "accounting" of it all. The facilities. Services on the lot. Etc.
And if a movie isn't a really a hit at the box office and/or with critics then DVD, streaming, etc. can't make up for that much in many cases. Sometimes they do, of course, but theatrical success (and the "must see" perception) play into things in terms of it's success down the road. And there are costs to mastering DVDs, making them, sending them out, etc. All written off towards the studios costs. It's an almost never ending cycle.
Here are just a few of a number of articles/references out there on the subject of Hollywood accounting:
https://priceonomics.com/why-do-all-...es-lose-money/
https://en.wikipedia.org/wiki/Hollywood_accounting
https://www.theatlantic.com/business...itable/245134/
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