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
Someone, almost always a large company, loses money.
In the case of a movie produced directly by the studio, this is easy to see. Warner Brothers wrote checks to performers, advertisers, CGI studios, best boys, etc. Those checks are cashed, and you can’t claw back the money just because the movie did poorly. Independent movies are a little different because they’re usually financed by smaller companies (or even individuals!) then sold to the big studios at film festivals. The small companies get back their money when they sell the movie. The big studios are hoping to make even more if the movie is a hit. This is generally a good system because it spreads risk out – a big studio doesn’t go bankrupt when one movie flops, it just covers with the profits from a different movie – while simultaneously funding small, creative movies.
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