“In an era where studios have all but eliminated first dollar gross and invited talent to share the risk and potential rewards, guess what? Net profit deals are still a sucker’s bet. I was slipped a net profit statement (below) for Harry Potter and The Order of the Phoenix, the 2007 Warner Bros sequel. Though the film grossed $938.2 million worldwide, the accounting statement below conveys that the film is still over $167 million in the red.”
“Only films like the micro-budget sensation Paranormal Activity make it difficult for profits to be obscured by the bean counters.”
But herein lies the rub; the studio system doesn’t support making these kinds of micro-budget films.
Old school business practices like these will drive a new generation of creatives to the web and elsewhere for distribution and profit. It will take time, but no one can argue that the democratization of media isn’t already underway.
I’m confident that in the very near future we’ll see a micro-budgeted film, marketed and distributed on the web, which will become a breakout hit. Let’s say a million downloads @ $4.99 for a film that costs 100K or so to produce. This will be the proverbial “game changing”, “killer app” which will set the whole business on its head.
Read the whole story at Deadline.com