While it seems obvious to most that huge amounts of money is invested into the production and distribution of films, many do not think about the amount of time and money it takes to plan movies, and a large majority of them will never make it to production.
Before a script is written, contracts involving ownership rights and royalties will have to be created for movies based on another piece of work. This means that fees are paid before anyone even knows if a quality piece of work will be created. Also, this is just one step during the planning of a film where entertainment lawyers will be hired. The screenwriters themselves do not typically make a large sum of money and are uncertain if their products will ever sell, but a few are able to create contracts with studios to create scripts for specific movie ideas. In addition to hiring writers, a producer or director may be paid in advance for a specific film in a development deal.
Agents and managers receive their fees during the planning phase; both represent their clients and secure their involvement in a film but there are some key differences. Agents may help plan product placement in a film, because they represent writers who can involve products early on, they have an interest in future versions of the product, and they generally receive 10 percent of their client’s payment. Managers are able to develop and produce media and they receive 15 percent of their client’s payment.
Once a producer is hired, and a movie is green-lighted, the organization for the production begins. A producer will have to find locations for filming, rent studio space, hire a crew, and secure equipment to be used to production. Personally, I thought this was the most surprising cost, because I never thought about the expense of equipment and the fact that studios themselves may not take on this financial liability - due to the high cost of cameras and other equipment, most films will rent these products. There is a huge amount of money spent through every step of creating a movie, from planning and overhead to production and distribution, most of which is not obvious to the audience.