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Most industries are not this bad, but reportedly, Hollywood is set up so that no motion picture ever produced is ever profitable. This was originally a corporate practice invented to screw over people contractually due a percentage of the net, but everyone went back to negotiating based on gross.

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A less weasely example might be the company simply deciding to take a loss or very low margin at low volumes to enable faster growth.

That might make sense for them because they have an open ended upside. It doesn't for whoever makes a cut.

Any time you take a percentage of the net, you've set up a perverse incentive for the company to spend more money up to the exact point where they're not paying you anything. After all, for them, it's "free" money!

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