Why are there 3 or 4 studios/production companies listed at the beginning of movies? After a major studio there will be several others (ABC Films, XYZ Pictures). Do the major studies need “help” making movies?
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Almost every major actor has their own production company. There are many reasons for this, everything from paying fewer taxes to getting a bigger salary. Big studios don’t need ‘help’ getting a production made, but they do need to keep the big stars happy.
The smaller companies are often the ones directly involved in making it and they then solicit additional financial backing from a larger studio. Sometimes the biggest company didn’t even make it at all but just bought the completed film as the distributor, providing a quick payout for the smaller companies that fronted the money to make the film.
So you’ve got 5 main concerns regarding any movie project:
Who’s actually making the film?
Who hold the rights to the film?
Who’s lot/studio are you shooting in?
Who’s paying for the film?
Who’s distributing the film?
Each of these areas can involve a separate company earning it a production credit at the start of the film.
Often times certain things may be farmed out to other production companies to save time, or to take advantage of certain people who are really good at one thing. It happens a lot with animation.
A part of this is “Hollywood Accounting”
In simple terms:
The main studios set up subsidiaries and holding companies and those companies nominally produce the film. The subsidiary is the legal entity carrying risk, this shields the main company from a lot of risk from lawsuits and other risk events.
The main company then “leases” it’s studios, staff, equipment, etc etc to the subsidiary to make the the film, and then the subsidiary has to repay them.
The leasing terms and rates then result in all the profits ending up with the main company while the subsidiary perpetually owes money until it is eventually disbanded/dissolved once it’s no longer useful.
A notable example is that Star Wars:Return of the Jedi, a **massively** successful film has, on paper, still not made a profit despite collecting over $400 million at the box office from a film that cost about $32 million to make. This is not an isolated example.
Hmmm… were it not for perpetual greed (as ***so well***explained below, nothing would ever get done because if you actually figure out the accounting detail and technical (and artistic) requirements, NOTHING is affordable.
Good question! I was thinkingbthis the other day when I was watching a movie on demand, and getting a little annoyed with all the mini-movies just listing each production company.
Also consider that sometimes yes, they do need help making the film.
One example is with computer graphics (CG). There are a bunch of great CG companies out there, all of which can make really great visuals for a lot of different things. But one particular area that’s super difficult to make look realistic is big, complicated water simulations.
There’s one studio in particular that’s made quite a name for itself as being the best at these simulations, I think perhaps it was WETA digital. At this point they have a great reputation, a lot of experienced staff, and even special in-house software specifically for this job that other companies can’t access, so if a movie or show demands the absolute best water effects, they may ask this other company to do it even if the ‘main’ effects studio is great at a lot of other things.
The studios don’t necessarily “need help” but there are a lot of entities involved in bringing a film to the screen. Most of these entities want credit for the work they’re doing. This gets into arcane negotiations between who actually gets one of those preroll cards, but usually they are simply the card for the studio, distributor, and any production/financing companies (including that of major creatives involved with it like the director). “A24 presents a Daniels film” could mean, for example, the distributor A24 released a film directed by the Daniels.
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