There are six major studios in the US. They are: Warner Bros. Pictures, Columbia Pictures, Universal Studios, Walt Disney Pictures/Touchstone Pictures, 20th Century Fox, and Paramount Pictures. Independent movies are those that are not produced, financed and distributed by the studios listed above.
The main benefits of attempting to produce a film through a major studio are related to money. The budget will increase dramatically if a major studio attaches its name to a production, meaning that more money can be paid to cast members, and there will be more money available to be spend on advertising and promotion. The producer’s fee will also be greater and will usually be guaranteed.
However, it is a difficult task for a producer to convince a studio to take on his project unless the producer has a proven track record. Hollywood studios require inexperienced producers to undergo an initiation of sorts. The typical deal for a producer fortunate enough to have his script considered by a major studio is the payment of a $25,000 development fee. Usually a portion of this will only be paid once the underlying rights to a script are assigned to the studio, a writer has been hired and the producer has signed a contract with the studio. Most often, the development fee will be credited against a producer fee of between $100,000 and $300,000, which will only be paid when the studio decides to make the movie. The probability of this happening is usually less than 10 percent.
An egregious provision that studios will include in a studio agreement with a producer is commonly referred to as a “pay-or-play” provision. This stipulates that the studio can remove the producer from the project at any time and the producer will not be entitled to any credit, profit and sometimes, not even the producer fee.
Often, even if a movie gets the go ahead, the studio will bring in other producers to be involved with the project. This means that the original producer’s credit will be diluted. The “installed” producers will make decisions, with little regard to the novice producer’s ideas.
It is for these reasons that producers often decided to follow the independent film-making path, until their profile and success is such that they are taken seriously by major studios. An independent filmmaker has control over hisproject and, if his project is successful, will keep a lot more of his hard earned profit.