The studio is the entity that determines who gets their payout–and in a market where everyone wants to get paid, they also want their cut. This means anything that isn’t net profit goes back to the studio, and money they take in can be listed under “recouping costs.” If profit is a pie given out to actors, writers, etc. in slices, ballooning costs are how studios take their slice of the pie. At its base, Hollywood accounting reports a bunch of costs that functionally do not exist. The point is to balloon the paper cost of making a film as much as possible. You can think of a movie as a corporation designed to lose a bunch of money with shell companies that just siphon profits.
The scramble for production accountants stems from a couple of factors. The arrival of multiple new streaming platforms created a hunger for new shows to fill their pipelines and fend off competition. But the pandemic slammed the brakes on the system, shutting down many productions and forcing others to cobble together ways to film remotely. Now, with filming back in full swing, the pent-up demand for content has led to a dearth of trained crews.
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They just want to make it look like their films are losing money. In the 60s and 70s payouts for actors, writers, producers, and directors were based on the gross and net profits/income of any movie. “Many former production accountants have gone on to earn significant roles within our industry, becoming successful producers and even heads of production at major studios,” Williams said.
- Once the movie comes out, this production company, created by the studio, is absorbed back into the studio.
- The executives oversee the key production accountants, making sure they are managing the finances of their shows properly.
- But I think a transaction where you bundle linear with streaming at a single price point for consumers to really highlight the value you’re delivering, could very well slow the rate of cord-cutting.
- And the good news is, you don’t need to be a certified public accountant to get into this lucrative role.
And then how does that compare to the business that we’re leaving behind that we’re transitioning away from — linear, because there is a long-running transition that’s taking place from linear to streaming. Why the gap between the MPAA’s $6.1 billion and Siwek’s $20.5 billion? Because the latter also factors in estimated losses from revenue that fails to circulate through the economy.
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What was once kept secret has now become an important marketing tool, and studios scramble over each other to ensure that their picture comes in No. 1. So you want to direct, but you don’t have a wealthy benefactor or thousands of dollars to spare? It might be time to think about raising money from the throngs of movie lovers. Learning the inner workings of each department on a film set is an important foundation for a production accountant.
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Within the corporation are shell companies, those existing in name only, that are designed to siphon all of the profits from the movie and funnel them back to the studio. These shell companies handle things like advertising, marketing and distribution. They can even be set up to cover more general expenses for accountants, managers, travel and entertainment for studio heads, and so on.
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That means that production accountants also need to become familiar with the implications of these incentives. The production accountant team typically travels with the production. Typically, the assistants supporting the production accountants start at approximately $1,000 per week and can earn up to $3,000 per week, according to Wagner. For many people who pursue entertainment as a career, it takes years to get yourself to where you are making money from your creative work. But more and more people are turning to platforms like TikTok, Twitch and Patreon.
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As the spotlight continues to shine on Hollywood, only time will tell if this unique accounting practice will ever face its final curtain call. The Hollywood Reporter spoke with Harrison about what is next for the box office in 2024 and beyond, where cord-cutting is going and his expectations for media giants’ next moves as they target reaching streaming profitability. And shouldn’t those news reports be touting another picture, instead? That’s Sausage Party, which may have come in No. 2 but which only cost a reported $19 million — a fraction of Suicide’s budget. I couldn’t help but think of that this weekend as a host of local and national news reports touted the latest box-office tallies.
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Soon after, Paramount began to develop its own, similarly themed film, with Eddie Murphy attached to star. When Coming to America was released in 1988, five years after Buchwald sold his treatment, his name was nowhere near it. Instead, a “story by” credit went to Murphy, who received the grand sum of $400,000 for his idea — one of those murky numbers that is never mentioned when you https://accounting-services.net/bookkeeping-hollywood/ hear what a star is getting paid. Anousha Sakoui is a former entertainment industry writer for the Los Angeles Times who covered topics such as labor and litigation in Hollywood. She has been a journalist for over 20 years, having joined The Times in 2019 and reported for the Financial Times, Wall Street Journal and Dow Jones Newswires, Bloomberg News and Businessweek Magazine.
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