Problem Statement and Insights Identification: The Film Industry

Problem Statement and Insights Identification
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Problem Statement and Insights Identification
The case study derives from increased production activities of independent companies, resulting in a capital influx that studios received from Wall Street hedge funds starting at the culmination of 2004. The authors indicated that studios’ expenditures averaged $100 million in film production and sales, yet mitigating the underlying risks that characterized film-making projects was still challenging. The traditional archetype for film financing entailed the studios depending on bank loans and bonds to leverage sufficient capital to finance film production. However, this relationship significantly favored the lender by assuring them of profits without incurring any risks in film production and sales. With respect to this imbalanced relationship, studios demonstrated the inclination to take financial risks related to film production due to the potential ...