Whether it’s due to bad reviews, people not just showing up to watch, or other factors, what happens afterwards behind the scenes when a film tanks?
In: Economics
I am not sure about the details about the US film industry, but films are in many ways similar to a start up. Films have a lot more initial cost than a start up, though. But this get funded by financiers and investors. So like any start up, the company makes the product, and investor might buy a stake in the company for future revenues, and or dividends.
Traditionally in the film industry one producer would sell one film to one studio. The studio would cover most of the production cost, the producer would secure the rights, and probably fund the development and a script. In the old days the studios would often own the production company, distribution and the cinemas itself. So naturally this was extremely lucrative.
Today is a lot more complex. Plus there are lot more companies involved, and is a way to spread the risk. This also ensures that most companies won’t go under if a movie tanks. Not sure how common this is in US, but film projects can also get incorporated as special purpose vehicle which protects the parent company. And what is already pointed out is that the studios make enough money to cover their losses on films that bombs. Plus studios of course consider how much money the movie must make in order for it to not be a loss.
Behind the scenes people involved might get fired, or a major setback to their reputation. Directors, writers, producers might not get funding for their next project – or a more difficult time to do so. Studio execs might get fired. Publicly actors might also suffer a blowback to their career if they are regarded as box office flops.
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