Some people would argue that deals, not movies, are Hollywood's major product. “Contract-driven” is a handy way to describe the business.

Although we frequently think of studios as monolithic enterprises, in actuality, they have become intellectual property clearinghouses simultaneously engaged in four distinct business functions: financing, producing, distributing, and marketing and advertising movies. Each function requires the application of highly specialized skills that include raising and investing money, assessing and insuring production costs and risks, and planning and executing marketing and advertising campaigns. Indeed, every motion picture and television project must inevitably confront and then cope with three main risks, first in financing, then in completion, and then in performance. This chapter describes the framework in which these functions are performed.

Properties – physical and mental

A movie screenplay begins with a story concept based on a literary property already in existence, a new idea, or a true event. It then normally proceeds in stages from outline to treatment, to draft, and finally to polished form.

Prior to the outline, however, enters the literary agent, who is familiar with the latest novels and writers and always primed to make a deal on the client's behalf. Normally, unsolicited manuscripts make little or no progress when submitted directly to studio editorial departments. But with an introduction from an experienced agent – who must have a refined sense of the possibility of success for the client's work and of the changing moods of potential producers – a property can be submitted for review by independent and/or studio-affiliated producers.