Comment by smileybarry
2 years ago
I assume they're referring to streaming-only releases that never make it to home media, aren't popular enough to be seeded indefinitely, or that get removed quickly for a tax break -- e.g.: Disney+ removed Crater ~7 weeks after it was released, purely to reduce residuals and claim losses for lower tax bills[1].
1.A.: https://kotaku.com/disney-streaming-crater-tax-rort-scam-wri...
1.B.: https://www.independent.co.uk/arts-entertainment/films/news/...
That is a bonkers story. Thanks for sharing, it is an incredible data point.
It never makes sense to deliberately not sell a film you've made to save on taxes.
However, it can make sense to stop selling a film because you think that the public will buy one of your other films instead where you earn more profits per copy.
One of the cartoon series I was watching got cancelled regardless of good reviews and considerable audience. It was just for a tax write off because merger between WarnerMedia and Discovery was happening at the time. The story is even more ridiculous because the original creator fought for 2 years to at least get to release a separate graphical novel to tie down the plot from a massive cliffhanger it was left with. He's covering that out of his own pocket, can't sell nor even advertise outside of the platform he owns (literally a wordpress.com website) and a bunch of other pretty insane requirements because of how tax write off works for media producers.
https://en.wikipedia.org/wiki/Final_Space#:~:text=The%20seri....
That’s not true. A film’s tax write off value decreases with time. As long as the present tax write off value exceeds the present value of all future film revenue, then it makes sense to deliberately not sell it and leverage the tax credit.
IANAA, but if the depreciated book value of a movie or show exceeds projected future revenue, shouldn't they be writing down the difference rather than writing off the asset?
Put another way, unless they physically destroy all copies of the movie or show or, for some other reason, are no longer able to distribute, license, or sell it, how can they plausibly argue that the fair market value of streaming rights to a reasonably popular movie or show is zero?