They can afford to lose money because, by in large, they’re paying themselves with the lost money. When a new movie is made, a shell company is formed to create the movie, to pay the studio, the director, for the ads, etc. At that point, it doesn’t matter how the movie does, everyone involved in making it is secure and safe.
The investors don’t mind, because as a whole, the industry is very profitable. Good youtube to explain it.
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