“Profit Participation” at the Hollywood Studios is impossible. (See “STUDIO SHAME! Even Harry Potter Pic Loses Money Because Of Warner Bros’ Phony Baloney Net Profit Accounting”) They are incestuous. Each of their stand-alone divisions siphons off all the money generated by each movie, deliberately leaving none for the Profit Participants.
I have worked in the studios, both as part of the studio divisions, and as part of individual movies. It is clear and simple how a studio demands a movie’s production buy everything from the very expensive in-studio divisions, whether snacks, sign making, props, construction, casting, studio space, trucks, crew, marketing, distribution, or whatever. Every division must show its own profit/loss, to feed into the overall studio, and every movie is obligated to make all purchases from the very expensive studio divisions. There are no bargains to be found on a movie studio lot.
That’s inevitable for the STUDIOS, which are huge corporate conglomerates.
BIG DIFFERENCE: It is NOT true for small independent producers.
It is not true, because I can go to a dollar store to buy snacks, I can go to a friend and borrow a truck, I can go to an up-and-coming talent to hire for advertising. And, I have no studio overhead, no fancy lot in Los Angeles, no fancy headquarters building in New York City. That’s a huge difference, and that’s reality.
A one million dollar indie movie that makes ‘only’ three million dollars from every market (box office, TV, online, etc.) could return more to an investor than a major studio blockbuster would return to a “Net Profit Participant.”