Anamorphic, excellent observations.
One thing that hasn’t been brought up is the option. A producer or manager can option a script, for as little a dollar or for thousands of dollars. This gives the holder of the option exclusive rights to buy the script within a set period of time - six months, a year. The holder of the option then uses the script as the basis for setting up a deal with production companies, studios, stars, private sources of funding. If the deal can be made, then the writer is paid for the screenplay.
As Anamorphic points out, the fee for a screenplay is a tiny part of the total budget for a typical motion picture. The buyers aren’t just paying for a script, they’re paying for a script that will catalyze the deal. It has to be a script that will make the stars, the director, and the studios sign on.
They will all be risking their careers, their livelihoods, and millions of dollars in the bargain. In hopes of minimizing risk, the power players prefer to go with established writers, people who have already written hit movies and TV, or at least, recieved screen credit for hit movies. The supply of these writers is small, and the half million to million dollar paydays that they get are just small slices of big pies.
Each of these power players is looking for certain elements in the script, elements that they believe will allow them to achieve their career goals. These elements may or may not have anything to do with artistic quality. Many actors don’t want to look weak, or have too much to say, lest their weaknesses in technique be exposed. Many actresses don’t want to appear unlikeable. They want to play characters that will resonate with their core fan base. Some directors want stories with lots of explosions. Studios may or may not want nudity, may or may not want minorities in prominent roles, depending on how they see their target audience.
Writers who can satisfy all these often contradictory and competing demands and still put together a compelling story are just not that common. Just as important is the fact that Hollywood runs on personal relationships. Stars, directors, producers, and studio execs don’t just want skilled writers with established track records. They want skilled, proven writers whom they already know, with whom they are on a friendly basis. It really, really helps to have gone to the same school, to have worked on the same shows, to have performed in the same clubs, and to be of the same socio economic and ethnic background. “Who do you know? Who do you play basketball with? Who do you play poker with?” are real questions that agents ask aspiring screenwriters before they decide on taking the writers on as clients.