ket for its product. Now, by contrast, an independ-
ent producer makes one film at a time, relying on
rented facilities and equipment and a creative staff
assembled for that one film. Even figuring for
those cost-saving elements, the expenses can be
staggering.
Moviemaking entails various kinds of “costs.” In
both the old and the new American film industry, the
total cost of a film is what it takes to complete the
postproduction work and produce the release nega-
tive as well as one or two positive prints for advance
screening purposes. But this “total cost” does not
include the cost of marketing or of additional prints
for distribution, so it is useful only for the special
purposes of industry accounting practices. You will
generally see this figure referred to as the negative
cost of a movie, where negativerefers to the costs of
producing the release negative.
For example, Orson Welles made Citizen Kane
(1941) at RKO in four and a half months and com-
pleted postproduction in another three months; the
cost of the release negative was $840,000 (approx-
imately $11 million in 2006 dollars). Today the pro-
duction stage of a feature film takes at least one
year, with the release negative costing an average
of $64 million. The average marketing costs per
movie of $30 million bring that to a total cost of
approximately $100 million. (Unlike expenses cal-
culated today, the costs of the release negative of
Citizen Kaneincluded marketing and distribution,
elements that were then simpler and less costly.)
James Cameron’s Titanic(1997) cost $200 million,
making it the most expensive movie produced to
that time, and Steven Spielberg’s Saving Private
Ryan(1998) cost $65 million, a relatively low figure
for such an epic film. The use of the most advanced
special effects raised the costs of Titanic, but for Sav-
ing Private Ryanthe costs remained low because
both Spielberg and the star of the film, Tom Hanks,
received only minimal fees up front rather than their
usual large salaries. According to a clause in their
contracts, each man was guaranteed 17.5 percent of
the studio’s first-dollar gross profit, meaning that
thirty-five cents of every dollar earned on the film
went to Spielberg and Hanks.
A similar arrangement applied to Spielberg’s
Minority Report(2002), which reportedly cost more
than $100 million to make and earned more than
three times that in worldwide box office returns
and selling 4 million DVDs in the first few months
of its initial release.^17 With this movie, Spielberg and
his star, Tom Cruise, also stood to make up to 17.5 per-
cent of every dollar earned; thus, it is conservatively
estimated that each man earned $55 million once
the revenues from all ticket receipts, DVD and video
sales, promotional products, and sales of movie
rights were computed. As in any other industry, costs
and revenues are controlled by supply and demand.
As costs increase for making the kind of block-
buster films that return sizable revenues, produc-
ers make fewer films, forcing people who work in
the industry to become financially creative in nego-
tiating the contracts that preserve their jobs.Labor and Unions
Before the industry was centralized in Hollywood,
movie production was marked by conflicts between
management and labor. Strikes led to the formation
of guilds and unions, which led to the division of
labor; that development, as much as anything, led a
hodgepodge of relatively small studios to prosper
and grow into one of the world’s largest industries.
In 1926, the major studios and unions stabilized
their relations through the landmark Studio Basic
Agreement, which provided the foundation for
future collective bargaining in the industry.^18
Workers in the industry formed labor unions for
the standard reasons: they sought worker repre-
sentation, equity in pay and working conditions,
safety standards, and job security. For example, the
Screen Actors Guild, established in 1933, is the
nation’s premier labor union representing actors.
In the 1940s, it fought the attempt of the studio
system to break long-term engagement contracts;
today, it faces new challenges in protecting artists’(^17) http://cn.wikipedia.org/wiki/MinorityReport(film) (accessed
April 26, 2009).
(^18) An excellent account of the power of labor unions in Holly-
wood, including the pervasive presence of organized crime, is
Connie Bruck’s When Hollywood Had a King: The Reign of Lew
Wasserman, Who Leveraged Talent into Power and Influence
(New York: Random House, 2003).
THE INDEPENDENT SYSTEM 503