May 08, 2008

Irrational cinematic exuberance

New Line Cinema sold off the foreign rights to The Golden Compass, hoping to clean up in the U.S. market, and then the movie earned huge returns overseas and only scraped by domestically. As detailed here, this is a sadly far from unique example of the bizarro, self-destructive world of Hollywood film financing, an industry that confuses moving money from one pocket to another with actually generating a profit.

Note that Sony "has the real chance of being the most profitable studio of the summer while not being close to the top in gross." Thanks to tight budgeting and realistic expectations. Kind of like the financial advice your dad once gave you. Gee, whoda thunk?

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