Comment by miki123211

This is a bad idea if your industry is CapEx heavy and you have a lot of bets that don't pay off.

The drug industry is like this; the profits on a single drug sale are insane, even counting the R&D costs for that particular drug. However, those profits are offset by the losses incurred on all the other drug ideas that hadn't panned out despite the hundreds of millions of dollars invested in them.

The record and publishing industries are similar. As Steve Jobs once said, the main job of a music label isn't selling records, it's not even marketing or promotion, it's identifying artists with potential to be great hits amongst the thousands of wannabes. The revenue that labels get, and it's a lot of revenue, mostly goes towards recouping the costs of failed bets.