Hollywood Accounting and the Cost of a Movie
The article at Techdirt is titled Hollywood Accounting: How A $19 Million Movie Makes $150 Million… And Still Isn’t Profitable but the discussion ranges beyond that.
Once again it’s revealed how the major studios cheat profit share deals by stacking on fees they make up, and paying them to themselves from the film’s income. It’s a shady practice and the sooner these crooks are out of our business the better it will be. (Not any time soon I fear.)
This article not only shows how movies “don’t make money” even if they would under any normal accounting tradition, but outlines the specifics of how filmmaker Scott Derrickson was screwed out of his 5% “profit share” on one of his most well known films, The Exorcism of Emily Rose.
Mostly that’s what we know from other writing about Hollywood accounting. But the main reason I’m referring to it is the commentary from Mike Masnick:
They then discuss his new movie, Sinister, which had a $3 million budget (which shocks Smith, who insists it looks like a movie that’s much more expensive). Of course, in many ways, this goes back to the discussion we’ve been having here for many, many years — responding to the old school movie studio guys, who demand that we answer how could they possibly continue to make $200 million movies. One answer, which we’ve pointed out time and time again, is that the question is the wrong one. Any business should be asking how it can make its product profitably – not how it can keep its costs high. No one in the tech industry asks “how can we continue to make $5,000 computers?” They ask “how can we make profitable computers” and one answer is to make the product more efficiently. It’s great to see filmmakers like Derrickson not just get that, but then to celebrate what that means for him artistically and financially as well.