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We're likely to start hearing unionbusting lies about how studios and streamers can't afford to pay actors fairly because “the writers took all the money.”
(sh.itjust.works)
this post was submitted on 04 Oct 2023
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In this thread: people who don't know the difference between revenue and profit.
I'm not trying to discredit the protests, they are completely valid, but this chart is meaningless for comparisons. The profits can be calculated and would be much more meaningful even if the numbers aren't perfect.
Hollywood accounting is notoriously untrustworthy, so any calculation of profit/loss is pretty suspect to me.
It's a pretty common tactic that they end up making "no money" on even huge films because of how they fudge the numbers.
That's why they are talking revenue here because it gets around the sketch accounting.
It may be true that it is difficult to accurately calculate the studio's profits however that does not change the fact that comparing worldwide revenue to individual costs provides no meaningful conclusions without knowing the rest of the costs. I agree that the writers and actors are being treated unfairly but the pie chart is obviously flawed.
Properly paying writers and actors are some of their expenses though, not random unrelated people that want money. Using revenue here makes sense to me.
Imagine that the studio makes a movie that uses a famous song, actor, or other piece of intellectual property that is very expensive but they know it will boost box office sales. They might spend $5 million on this IP and it might generate $6 million in additional revenue.
Now, some people look at the $6 million in revenue and ask where their cut is. Of course the studio doesn't actually have the $6m, they only have $1m after paying for the IP. Extrapolate this out for a whole movie.
This is why it doesn't make mathematical sense to compare your wage to revenue - it is ignoring business fundamentals. Instead we need to look at profit which already has all expenses subtracted out. Profit is where any additional compensation must come from, or the studio needs to cut expenses elsewhere.
Sure, so long as you're cutting all the expenses out of the revenue too, and not just union dues. The whole trick of this chart is to make pretend like writers, actors, etc are only getting 0.01% slices of the pie and the studio keeps the rest. When the actual actors (as opposed to the union itself) are going to be a big chunk of that revenue, as are the actual writers, editors, special effects, sets, costumes, etc, etc.
The point the chart is trying to make (I assume) is that if you're dealing with such a small part of the pie, it's not actually worth arguing over unless you're just being greedy.
If you gave all of those unions 100% compensation increases it would now be 0.06% of studio revenue. Tell me with a straight face you think that their margins are so tight that sharing up that percentage of revenue would suddenly make movies an unprofitable venture.
The question is however are they using real world accounting for that math, or Hollywood accounting?
They skew those numbers.
Agreed, but that doesn't make the pie chart valid. It makes zero mathematical sense to compare worldwide revenue to a single cost unless all other costs have been subtracted out first.