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641 points shortformblog | 1 comments | | HN request time: 0.218s | source
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xhkkffbf ◴[] No.42950619[source]
Why are some great films mixed with some duds? This is classic Hollywood accounting. They sell N files for $M and then split the revenue evenly. The great film gets $M/N and so does every dud.

In practice, the great film's revenues have already "earned out" any advances so that $M/N must be shared with outsiders. Often, the duds haven't made enough so the studio gets to keep all $M/N.

I don't know that's what they're doing here. Certainly, they have enough data to accurately allocate revenues. But it's what's been done in the past.

replies(1): >>42951898 #
1. lotsofpulp ◴[] No.42951898[source]
The “Hollywood accounting” meme makes no sense. Anyone in the media production business can take 5 min to read the Wikipedia article on it (or use common sense) and learn that they should not accept compensation on terms completely controlled by the opposing party.

If they do, then they had no negotiating power in the first place, and so had nothing to lose by accepting those terms (because they were not going to get a better offer such as more cash upfront).