Why do big Hollywood studios make so many bad movies that lose money?

Question

Idk if economics was the right flair but I don’t know how it’s economically feasible for big studios to lose money on a lot of films with huge budgets and to make them so bad.

In: Economics

Answer 1

Hollywood studios use shady accounting to make it seem as if the movie is losing money by inflating the costs paid to the studio’s own subsidiaries. Here’s an article on this practice: https://www.cnn.com/2023/07/19/business/nightcap-hollywood-accounting-strike/index.html