Production Company - Operation and Profit

Operation and Profit

A production company is usually run by a producer or director, but can also be run by a career executive. In entertainment, a production company relies highly on talent or a well known entertainment franchise to raise the value of a entertainment project and draw out larger audiences. This gives the entertainment industry a democratized power structure to ensure that both the companies and talent receive their fair share of pay and recognition for work done on a production. The entertainment industry is centered around funding (studio investments, private investments, or self investments either from earnings from previous productions or personal wealth), projects (scripts and entertainment franchises), and talent (actors, directors, screenwriters, and crew). Production companies are judged and ranked based on the amount of funding it has, as well the productions it has completed or been involved with in the past. If a production company has major funding either through earnings, studio investors, or private investors, and has done or been involved with big budget productions in the past, it is considered to be a major production company. These companies often work with well known and expensive talent. If a production company does not have much funding and has not done or been involved with any big budget productions, it is considered to be a small production company. These companies often work with up and coming talent. Small production companies will either grow to become a major production company, a subsidiary completely owned by another company, or remain small. The success of an entertainment production company is centered around the projects it produces, the talent it can acquire, and the performance of the talent. Marketing is also a major factor. All films, as a tradition, are often marketed around the image and the performance of the actors; with an option of marketing the behind the scenes crew such as the directors and screenwriters. Unlike many other businesses, a production company does not rely on an ongoing revenue stream, they operate on ongoing investments; this often requires a parent company or a private corporate investment entity (see Legendary Pictures). Their only source of profit come from the productions they produce. Because entertainment and media are currently in "high demand", a production company can profit if its management is capable of using its resources to supply good quality products and services to the public. Many entertainment production companies brand their entertainment projects. An entertainment project can either become a "one time hit" or an ongoing "entertainment franchise" that can be continued, remade, rebooted, or expanded into other sister industries; such as the video game industry (see Star Wars, Star Trek). Entertainment projects can be either an original or an adaptation from another industry.