A production company provides the physical basis for works in the realms of the performing arts, new media art, film, television, radio, and video.
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The production company may be directly responsible for fundraising for the production or may accomplish this through a parent company, partner, or private investor. It handles budgeting, scheduling, scripting, the supply with talent and resources, the organization of staff, the production itself, post-production, distribution, and marketing.[1] Production companies are often either owned or under contract with a media conglomerate, film studio or entertainment company, who act as the production companies parent company (see Time Warner, Viacom), but they can also be independent (see Lucasfilm, Lionsgate). Production companies can also work together in co-productions.
A production company is usually run by a producer or director, but can also be run by a production executive. In entertainment, a production company relies highly on talent to raise the value of their entertainment projects and make more profit. Production companies are judged and ranked based off of the amount of funding it has, as well the productions its done or been involved with in the past. If a production company has major funding either through earnings or investors (or both), 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 subsidary completly 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. Unlike many other businesses, a production company does not rely on a ongoing revenue stream. Their only source of profit come from the productions they produce. Because entertainment and media are currently in "high demand", production companies 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 a 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 adaptation.
Being that, a production company is only operational when a production is being produced and most of the talent and crew are freelancers, many production companies are only required to hire management staff that helps to oversee the companies daily activities. In some cases, a production company can be run by only a handfull of people. The companys funds are mainly commited towards employing talent, crew, and aquiring new updated production equipment on a regular bases. Many productions often require at least one to two cameras and lighting equipment for on location shooting. Many small production companies hire camera operators who own cameras or they rent cameras and equipment from another company until they are able to purchase their own equipment. In entertainment, in order to secure experienced professional talent and crew, production companies often become a signatory company to that talent or crew members "guild". These signatory companies are required to sign an agreement with that guild agreeing to follow the guild regulations. All big budget guild productions are exclusive to guild members and non guild members are not allowed to participate in these productions unless authorized by the guild. The majority of the talent and crew working in the entertainment industry are members of their professions guild. Most productions in the entertainment industry are guild productions.
In entertainment, for legal reasons it is common for production companies to not accept unsolicited materials from any other company, talent, or person from the general public. It is also common for filmmakers or producers to become entrepreneurs and open their own production companies so that they can have more control over their careers and pay, while also acting as a "in house" creative and business driving force for the company (see Bad Robot Productions).