Most businessmen and women in Hollywood think they have what it takes to build the next big label. Most producers think they know better than the studios and can do one better. But there are fundamental differences between building a studio and building a production company.

Production companies see life picture to picture and rarely lock their future in place. Some production company heads have long-term goals, but most are contingent on the success of the company’s material slate. That’s true for all content creators, but production companies fall short by investing all eggs in the movie basket.

Studios take a bigger piece of the pie. The difference between production companies and studios? Studios have assets and scope. Successful studios operate more like landlords and parents than artists or producers. They own backlots, prop houses, sound stages, post production facilities, restaurants, libraries, other companies, equipment, hardware, software, websites, networks, satellites, and more. A sizable portion of the sustainable revenue comes from operating and renting out these assets. Furthermore, most studio executives speak in slates and four year periods. They work hard to see into the future and see past the big fat movie release in front of them. Strong studios invest in things other artists use to tell stories, and they also invest in long-term strategy.

Are you in it for the movie game alone? Or are you in it for the big picture? The long haul? Decide what you want to build. Do not lie to yourself about what you care about.