How is it that a screenwriter in Hollywood can get paid a six figure salary by simply giving a movie studio the option to see their work before anyone else does? How are some authors able to convince publishers to pay hundreds of thousands of dollars on their book advances? And, why is it that freelance journalists are almost perpetually broke and rarely make more than two dollars a word?
The answer to these questions lies in the history of these different industries. At one point most journalists had staff jobs at newspapers or on the mastheads of magazines. They were expected to produce a lot of material, had stable salaries and their work pretty much always belonged to the companies they worked for. Hollywood and book publishing were different. No one was guaranteed work. Writers came up with their own ideas and then sold them to movie studios and publishers on a freelance basis. They hired agents who knew the industry, looked out for their interests and held auctions to drive up the price of their work. Book publishers and studios paid the increasingly high prices and still turned a profit.