Why do actors get paid tens of millions for their movies instead of a normal salary?

Question

Why do actors get paid tens of millions for their movies instead of a normal salary?

In: Culture

Answer 1

Just like the costs of goods, labor costs are subject to the laws of supply and demand. There might be millions who could work stocking shelves at Wal-Mart, or hundreds of thousands of programmers to write software, but there is only one Tom Cruise and only a handful of similarly suited actors for a role he gets… maybe Matt Damon or Robert Downey Jr. could also fill the role and draw as many viewers, but there just aren’t that many A-list actors who can fill a particular role.

And then there are the economies of scale… while Wal-Mart needs dozens of people in thousands of stores to stock all the shelves, they need to pay hundreds of thousands of people to do stock shelves for selling $200M in merchandise. Similarly, all the software companies, large websites, etc. all need many, many programmers to achieve $200M in software sales. But a movie can sell $200M in tickets on account of one specific star actor.