Three-Act Structure is a way of structuring a movie, stage play or novel that can be found in many stories (and even some songs). It helps the audience orienting themselves in the storyline and keeps their interest.
Act I (the Setup) is used to hook the audience and introduce the protagonist, the antagonist and the major conflict/problem/mission of the story. It also establishes the locale and the mood and conventions of the story. Act I takes up approx. 1/4th of the story.
Act II (the Confrontation) forms the main part of the story and takes up at least half of the entire story. Here, the protagonist finds himself in a cycle of struggles and complications on his way to the solution to the original problem.
In Act III (the Resolution) the conflict/problem is solved and the story comes to a narrative closure. This takes up a maximum of 1/4th of the story.
Case Study: Star Wars (A New Hope)
The Beginning of a story introduces the dramatic situation and dramatic premise, as well as the major players. Additionally, it establishes the mood and locale.
Damsel in distress Leia (Rebels) gets captured by the antagonist Darth Vader (Empire) aboard a spaceship in space.
Then, Hero Luke, a farm boy living with his aunt and uncle is introduced. He dreams of leaving the farm but is required to stay and work.
The Inciting Incident is the first disturbance of the established situation. It get’s the story moving.
In Star Wars, our Hero’s storyline connects to the dramatic premise when Luke buys R2D2 and C3PO.
Second Thoughts in the protagonist happen as a result of the Beginning and the Inciting Incident, as the established situation of the protagonist is disturbed. They lead up to the first Plot Point.
Luke finds out about Leia’s misery but decides he can’t help as he needs to go back to the farm and work.
Plot Point 1:
The Climax of Act One sets the events of Act Two in motion. The protagonist is put into a position where he/she needs to choose a course of action. By doing so, the course of the story changes.
Luke finds family & farm burned. Luke actively makes commitment to help Ben and leave his homestead behind.
After embarking on the journey, the protagonist meets several new characters, starts subplots and faces obstacles.
Obstacle: Stormtroopers stop Ben and Luke.
Resolve: Ben uses the Force.
On their subplot of finding a ship, Luke and Ben meet Han Solo and Chewbacca. They sell the speeder to overcome the obstacle of paying them.
With Han, another subplot – his conflict with Jabba the Hutt – is introduced.
Obstacle: Stormtroopers attack and try to stop the ship.
Resolve: They manage to flee into Hyperspace.
The First Culmination comes when the main characters almost reach their dramatic objective. It leads right to the Midpoint.
Luke, Ben and Han are in Hyperspace on their way to Alderaan and have therefore almost reached their dramatic objective. When they reach Alderaan they find it destroyed, which leads to the midpoint of Act Two.
Midpoint (big twist):
The big twist at the middle of Act II has the main characters at their low point. After almost fulfilling their dramatic objective in the First Culmination, they seem farthest away from it after the big twist.
The Millennium Falcon is captured by Death Star and the group reach their low point seeming farthest away from fulfilling the dramatic objective (delivering R2D2 to Leia).
Before the Climax of Act II, the main characters get once again involved into several subplots and face a variety of obstacles.
Subplot: Ben has to disable one of the power-beams.
Subplot: Free Leia from prison.
Obstacle: Stormtroopers attack in prison ward.
Resolve: They escape into the garbage.
Obstacle: A garbage worm attacks and the walls threaten to crush them.
Resolve: R2D2 stops the walls and opens the door.
Disaster & Crisis:
Disaster and Crisis happen when the main characters have a False Sense of Security and the resolution of their problems seems in reach. The Crisis is a result of the characters trying to fix what went wrong at the Midpoint. Additionally, more information about the antagonist is revealed.
Stormtroopers are chasing the group. Darth Vader shows up and fights Ben. Ben dies. Luke is left without his mentor and does not feel ready for it.
Plot Point 2:
The Climax of Act Two is a direct result of the Disaster and Crisis. Now the protagonist is at a point where he/she feels like giving up but realizes facing the problem head on is the only solution.
Luke, Han and rescued Leia escape the Death Star. They are devastated after Bens death but know they have to bring the plans to the Rebels to defeat Darth Vader.
Descending Action (& Obstacles):
In Act III, the protagonist and the supporting characters put a new plan to fight the antagonist into action. Minor subplots and obstacles occur on the way to the final crisis.
Luke and the Rebels prepare for the fight against the Empire and the destruction of the Death Star.
Obstacle: After leaving the Death Star, the Falcon is attacked by TIE-Fighters.
Resolve: Shoot them.
Subplot: Han Solos inner struggle of money vs. friends.
Obstacle: Pilots struggle to hit the opening. TIE-Fighters chase them.
The Climax of Act Three is the final showdown with the antagonist. The protagonist needs to overcome his fears/past and use everything he has learned over the course of the story.
Luke trusts in Ben and the Force and succeeds in blowing up the Death Star. Han Solo comes back and defeats Darth Vader, saving Luke.
The threat is overcome and the initial equilibrium is restored. The Wrap-up gives the audience a sense of closure.
Hugs and cheers. Ceremony with medals. Happily ever after.