three more names. Each person receiving credit as
a producer was affiliated with one of the six entities
listed at the beginning of the film and may also have
had some creative responsibility beyond their
financial and organizational concerns.
Some producers will have enough start-up
financing to ensure that the preproduction phase
can proceed with key people on the payroll; others
will not be able to secure the necessary funds until
they present investors with a detailed account of
anticipated audiences and projected profits.
Whether a movie is produced independently (in
which case it is usually established as an independ-
ent corporation) or by one of the studios (in which
case it is a distinct project among many), financial
and logistical control is essential to making
progress and ultimately completing the actual
work of production as well as to holding down
costs. Initial budgets are subject to constant modi-
fication, so budgeting, accounting, and auditing are
as important as they would be in any costly indus-
trial undertaking.
In the old studio system, the general manager, in
consultation with the director and key members of
the production team, determined the budget for a
film, which consisted of two basic categories: direct
costs and indirect costs. Direct costs included
everything from art direction and cinematography
to insurance. Indirect costs, usually 20 percent of
the direct costs, covered the studio’s overall contri-
bution to “overhead” (such items as making release
prints from the negative, marketing, advertising,
and distribution). Table 11.3 shows the summary
budget for Michael Curtiz’s Casablanca(1942),
including a line-item accounting for each major
expense. Direct costs were 73 percent of the total
budget.
Today, in the independent system, budgeting is
done differently. Usually the producer or a member
of the producer’s team prepares the budget with
the assistant director. The total cost of producing
the completed movie generally breaks down into a
ratio of 30 percent to 70 percent between above-
the-line costs (the costs of the preproduction stage,
producer, director, cast, screenwriter, and literary
property from which the script was developed) and
below-the-line costs (the costs of the production
and postproduction stages and the crew).^19 Catego-
rizing costs according to where they are incurred
in the three stages of production is a change from
the studio-system method. Costs also vary depend-
ing on whether union or nonunion labor is being
used. In some cases, producers have little flexibility
in this regard, but usually their hiring of personnel
is open to negotiation within industry standards.
Finally, we must always remember that no matter
what approach is taken to making movies, movie-
industry accounting practices traditionally have
been as creative as, if not more creative than, the
movies themselves.Marketing and Distribution
After screening a movie’s answer print (the first
combined print of the film, incorporating picture,
sound, and special effects) for executives of the
production company as well as for family, friends,
and advisers, the producer may show it to audi-
ences at previews. Members of preview audiences
are invited because they represent the demograph-
ics of the audience for which the film is intended
(e.g., female teenagers). After the screening, view-
ers are asked to complete detailed questionnaires
to gauge their reactions. At the same time, the pro-
ducer may also have chosen a smaller focus group
from this audience and will meet with them person-
ally after the screening to get their reactions first-
hand. After analyzing both the questionnaires and
the responses of the focus group, the person in
charge of the final cut—either the producer or the
director—may make changes in the film. Although
this procedure is presumably more “scientific”
than that employed in previous years by the stu-
dios, it reflects the same belief in designing a film
by the numbers. Since most major movies are
intended as entertainment for the largest, broadest
audience possible, the strategy makes business
sense. Films intended to appeal to smaller, more(^19) An excellent source of information on current budgeting
practices is Deke Simon with Michael Wiese, Film and Video
Budgets, 4th ed. (Studio City, Calif.: Michael Wiese Produc-
tions, 2006).
MARKETING AND DISTRIBUTION 507