Showing complete naivity in the movie business, The Guardian‘s Ben Child wonders how any movie makes money if Harry Potter can’t.
A hint of the true extent of Hollywood’s current financial travails has emerged after it was claimed that a film which racked up almost $1bn at the worldwide box office in 2007 still lost money for the studio that made it.
No movie appears to make money, that’s the way Hollywood works, otherwise they have to start paying all sorts of people a percentage of the profits. They’ve long been known to operate creative accounting. Net points (those paid when a movie starts to ‘make’ money) are usually referred to as monkey points, because they rarely get paid (5% of movies post a profit, apparently).
The real money is in gross points, those against every dollar the film takes, although even they have caveats for excluding certain things.
Gawker has an interesting article covering this, and Slate has some examples which show you just how complex film financing is.
Add to all this very few films really do make money at the cinema, most make their money from DVD and various rights sales (hence the alarm DVD sales are falling).
So did HPOotP actually lose money? No way, not something that big, they just make it look like it did.
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