2Macroeconomic Trends and Studio Co-Financing
Summary—The chapter discusses the impact of technological change and other macroeconomic factors on industry profit margins. It focuses on the historical introduction of new distribution platforms—i.e., free television, pay television and home video—and how they contributed to studios’ profit margins as opposed to cannibalizing them. It highlights Warner Bros.’ penchant early on for nurturing satellite production companies that served as valuable contributors of independently produced and financed films to the studio’s distribution pipeline.
From a macro point of view, film company profitability is much more variable than other industrial sectors. This is a result of creative variability: Some years ...
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