Exploring the small movie profitability puzzle
Tóm tắt
Movie industry sources and academics claim that film production is a risky business in which revenues and profits accrue to a few successful releases, most of which happen to be big-budget productions. At the same time, Hollywood produces hundreds of low-budget movies annually that seemingly have low chances of success from the outset. This is the paradox that the current research seeks to explore. We hypothesize how key elements of small films' business strategy serve to help low-budget film ventures to achieve profitability. We then draw on rich data assembled specifically for this research to explore the hypothesized cost-side and revenue-side inputs and also to compare the profitability of low-budget and big-budget film ventures. Contrary to the prevailing wisdom, we find that, on average, both big-budget and low-budget films generate a profit, when all major sources of revenue and cost are considered.
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