Hollywood released 607 movies in 2006 to the tune of 1.45 billion tickets sold for $25.8 billion in ticket sales world wide.
Yet, with an average budget of $65.8 million and average marketing and distributing costs of $34.5 million, every studio film put out last year cost over $100 million.
It is a well established rule of thumb that a movie has to make three times its negative cost to show a profit. With those kinds of numbers in the ledgers, it is no wonder that studio executives are nervous.
Talent costs continue to rise and over the past decade writers have been asking for, and getting, multimillion dollar deals. And perhaps the most valuable, if underrated, factor in the industry is the story itself.
Movies continue to draw on television for inspiration (e.g., Jackass, Mission Impossible, and the upcoming Simpsons movie). Other robust sources for potential screenplays are books, plays and newspapers. Several films have also been based on video games.
Generally, however, all purchase agreements for the acquisition of motion picture and allied rights contain the same elements.