How do movie studios make money? How much does the box office matter? Why do feature films cost so much, and why is it so hard for independent films to be made and distributed profitably? The answers to these questions are tied up in the enormously complicated economics of the movie business. We are mostly interested in whether or not it this system rational and sustainable. The economics also explain the race to the bottom in terms of quality.
Check out this interview on NPR’s Fresh Air with Edward Jay Epstein, author of ‘The Hollywood Economist’ — here’s an excerpt from the interview:
“Now when films are shown digitally, there’s a digital file. But the movie companies — the studios, the distributors … still charge — this is not something they make public — they still charge the film for what they call a digital copy, even though the digital copy might cost them $50 rather than $1,000. … So they have a basic scam going on, and that is charging for something that doesn’t exist.”