Hollywood doesn't claim that the blockbusters make a loss. They can't get that creative with their accounting to make millions/billions of dollars vanish from the IRS. What they do is shuffle the profits around between their sub-companies. Say you sign a contract with Universal Pictures to get 20% of the profits of the movie. Now Universal Pictures takes a loss on the movie by moving all of the profits to Universal DVD Distribution or some other company under the "Universal" umbrella. So that other corp has record profits, while the one you hold the contract with reports a loss. [ The money can be 'moved' between companies by just charging exorbitant prices for their services rendered. E.g. Universal DVD Distribution charges huge amounts of money to Universal Pictures for the DVD production. ]