Roger Corman’s strategy may be a good one for an individual, but it doesn’t scale well and thus won’t tell you how the industry is organized. When you have little money, it is good to control costs and maximize percentage return, but if you do this very well, you’ll end up with a lot of money. Investing it all in small films would be too many to manage. So you either have to hire people to manage these small films and run into principle-agent problems or you have to aim for larger grosses.
Roger Corman’s strategy may be a good one for an individual, but it doesn’t scale well and thus won’t tell you how the industry is organized. When you have little money, it is good to control costs and maximize percentage return, but if you do this very well, you’ll end up with a lot of money. Investing it all in small films would be too many to manage. So you either have to hire people to manage these small films and run into principle-agent problems or you have to aim for larger grosses.