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this post was submitted on 10 Feb 2024
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Make 10 things for $10.
Try to sell each for $100, say only one sells.
Rather than take a lower price, you write off the 9.
Your taxable income is now $10. And your average profit per thing is $90. Which is good for stock prices.
Mix in Hollywood accounting, and you might even still not have a taxable income. Plus, those other 9 aren't competing against the 1 that made it. They're concentrating all the profits in one thing, which makes marketing easier
But really, it all comes down to manipulating stock price.
But you didn't try to sell the other 9? You made them for $10 each and then threw them straight in the trash.
That's not what happens here...
They were trying to sell this for 80 million, no one want d to pay that.
It didn't cost 80 million, they could have sold it for less.
But that would dilute the market and lower prices for other films.
It's like luxury goods destroying their own product rather than lowering the price to move all their inventory. It's not about selling as many as possible, it's about having the highest profit margin.
Like, why are you trying to argue that this isn't profitable? These studios spend millions on lawyers and accountants to ensure profits are maximized.
You think you know more than them?
The solution is legislation to prevent this bullshit from being more profitable than releasing them.
Woah calm down, I'm not trying to argue with you. I was just trying to wrap my head around your ELI5 explanation by asking a clarifying question.
Why the hostile tone? Sheesh
Resting A-hole Tone. It is a condition like RBF
It sounds more like frustration at the whole situation tone to me. I think we all want new content and we want creators to thrive. This situation sucks for many mnay people
there's definitely some accounting shenanigans going on.
Do they write off the other nine things for $90 or $900 based on the value of the materials or the estimated value of the work. I assume if they say, "we earned $100 but it cost us $900 to do that," on your taxes that you can get your taxes owed down to about zero.