Motion Picture Production

At a studio, a film begins in one of two ways. Someone inside the company might develop a "concept" (one or two lines of an idea), or a known writer might make the well-known "30-second pitch" and secure a deal. On the other hand, an agent might bring the script by a new writer to the attention of the studio. Scriptwriters are hired, cast sought, and directors and producers assigned. Then the film is put into development.

Development begins when the studio options or purchases a literary property, usually a script or a book. The nature of the deal depends on those involved in it. During development, the studio hires writers to adapt the book into a screenplay, reworks the original, determines a budget, and even starts casting.

The next step is preproduction, the period before principal photography when commitments are sought for talent, the director and crew are hired, and contracts are finalized and signed. Producers try to have all contracts in place before filming begins. The filming of a motion picture is called principal photography. It takes from 8 to 12 weeks, although major cast members may not be used for the entire period. Once the production has gotten to this stage, it is unlikely that a studio will shut it down. Even if the picture goes over the budget, the studio will usually find a way to complete it.

During the post-production period that follows principal photography, the film is edited and synchronized with music and dialogue. In certain cases, special effects are added. The post-production period used to require six to nine months. With recent technological developments, however, this time has been cut drastically for some films.

Theatrical Exhibition

The exhibitor pays a percentage of the picture's box office receipts (called "rentals") to the studio or distributor. The size of the percentage depends on the distributor's strength and the exhibitor's desire to show the film. A major studio release usually has a 50/50 split, while independent films average 47 percent from the box office. Of course, the exhibitor keeps all the money for popcorn, candy, and soft drinks.

The U.S. release of a film usually ends within the first year. Major studio films may go out to as many as 3,000 screens in the first few weeks. Independent films start slower and build on their success. Although the amount of rentals will decline toward the end of the film's run it may very well increase in the first few months. It is not unusual for a smaller film to gain theaters as it becomes more popular.

Because revenues from all other sources are driven by the success of the theatrical distribution, a film's stay on theater screens is important. Coupled with this is the exhibitor's basic desire to see people sitting in theater seats. Although the studio has some power to keep a mediocre film on the screen with its greater resources for marketing and promotion, good independent films will be shown. Exhibitors have always maintained that they will show any film they think their customers will pay to see. Depending on the location of the individual theater or the chain, local pressures may play a part in deciding which films are shown. Not all pictures are appropriate for all theaters.

Despite the new technologies on the horizon, theatrical exhibition is not likely to disappear during our lifetime. Forecasts show an enormous industry growth period in the next few years.

Foreign Exhibition

The foreign theatrical market continues to provide a significant source of revenue for theatrical distribution. Major studios have their own distribution offices in many countries, and they also cooperate with local distributors. One company, UIP, is a cooperative distribution arm of several studios; it handles the foreign releases of films made by U.S. companies. The distribution fee can vary from 25 to 45 percent.