Act structure explains how a plot of a film story is composed. Just like plays (Staged drama) have 'Acts', critics and screenwriters tend to divide films into acts; though films don't require to be physically broken down as such in reality.
Whereas plays are actual performances that need 'breaks' in the middle for change of set, costume, or for the artists' rest; films are recorded performances shown mechanically and therefore don't need actual breaks. Still they are divided into acts for reasons that are in aesthetic and structural conformation with the original idea of Act in theatre. Act breaks in a film are usually very obscure for lay audience and only a trained person can detect the ending of one act and the beginning of another in the progression of a movie; although learned people can typically mark it by a 'plot point' in writing process or film appreciation. The idea of Act structure is of more value in Screenwriting (i.e. while writing a Screenplay) than watching a film, though the act breaks are never actually written in the final copies of screenplays, unlike in play scripts where they are clearly mentioned as such; e.g. Act 1 Scene 3, etc. However, in television scripts called Teleplays clear denotations about Act breaks are almost always included, usually to coincide with commercial breaks.
Act is the broadest structural unit of enacted stories. The most common paradigm in theatre, and so in films, is that of the three act structure proposed by Aristotle. Simply put, it means that any story has a 'beginning', a 'middle' and an 'end'. Playwrights and screenwriters divide their stories into three major parts viz. 'Set up', 'Confrontation' (alternatively called as 'conflict' or 'complication') and 'Resolution'. These form the basic three acts of any performance- staged or screened.
Though various theories have been proposed and debated, the Three-act structure stands as the most popular one. Also, this is what Hollywood has discovered and proved as the most successful in commercial movie making. The rest of the world may have various ways of looking at the plot.
Read more about Act Structure: The 'Three-act Structure'
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