I disagree that a flop means lost revenue. This is an industry that's so adept at hiding income to avoid paying taxes, actors, and every other studio worker that dodgy accounting is known as 'Hollywood Accounting'. Maybe we're talking about different things. When I say Hollywood, I mean the movie industry as a whole.

Hollywood has failed to capture some income streams. From theatres, for example, as you say. But there's still too much money to be made (and too much propaganda potential) for enough big money to leave that the problems of monopoly finance capital go away.