Hollywood's Broke Final Chapter: In Summary by Lawrence Meyers 26 Mar 2010 post a comment Share This: Let’s review my postulations about Hollywood from my other articles and see if my proposed fixes can work. 1) Movies operate in a statistical environment of extreme uncertainty 2) Uncertainty creates fear 3) Fear creates a desire to control 4) Desire to control has resulted in a mult-layered, needlessly expensive studio bureaucracy, resulting in sub optimal risk management. 5) The goal of each individual level of the bureaucracy is to insulate itself from criticism from the layer above it. 6) This results in the hiring of the most expensive, but not necessarily most talented or suitable, creative team to manufacture product that audiences are losing interest in and are not designed to achieve maximum ROI. The generalized solutions to these problems are as follows: 1) Increase advertising expenditures for the internet and decrease newspaper expenditures. Aggressively redesign ad campaigns, and innovate web-based advertising for content. Focus on Transmedia. 2) Eliminate needless bureaucracy and increase productivity by removing 90% of executives. Project decisions will occur more rapidly. Decision-makers are paid well to make decisions, so they should make them. 3) Hire 50 – 100 writers per studio at a solid wage with upside potential, to provide studios with content that has higher chance of being produced (See #2), eliminate antagonistic labor relationship by making writers partners. 4) Assign movies to producers, not the other way around. 5) Provide limited discretionary development money to both established producers and 15% of annual budget to new talent. Encourages producer innovation and focus on limited projects, increasing productivity. 6) TV: Replace current development process by limiting series pitch season; develop and greenlight series based on 6 - 10 scripts. Consider more limited series. Focus on branded properties. 7) Permit agencies to become de facto studios. Creates competition in the marketplace, increasing the number, type, and quality of films produced. Who Wins? Bridesmaids and Journeymen Writers win – and frankly, that’s my goal. More writers will be regularly employed under this system than are presently. Most other Above-the-Line and Below-The-Line workers win. The plan essentially calls for the redeployment of capital away from an overabundance of expensive blockbusters to produce more movies of varying budgets and genres. That means more employment. Studios win. They diversify their product mix and see significant cost savings across the board. Possible further upside if product & marketing improvement leads to increased audience attendance to film and TV. Agents win. Now permitted to finance their own productions, they get substantial upside not available to them presently. Audiences win. More films to choose from. Higher quality. Who Loses? Less-talented A-list writers lose. These are people who have been hired solely because they have a track record, hired out of fear by the studios to try someone new. Executives lose. This is the most unfortunate situation. Of small consolation is that these jobs never should’ve existed in the first place. The good news is that there are many executives who are excellent at what they do. Some should become producers. Some should remain as the cream of the executive crop. Some should be absorbed into studio in other capacities where their skill set will be useful. The Market At Work We are starting to see some of these changes already, driven more by the flattening of the economy than from any sense of innovation. Marvel Studios is an outstanding operation, and is bringing value to audiences and shareholders alike. They understand what good storytelling is all about, and executed a brilliant financing maneuver with Merrill Lynch. It has apparently created an in-house writing staff much as I have suggested. If anecdotal reports are correct, however, I have to criticize it for not being generous enough to the writers. “So what else is new?” you ask. What I mean is that I admire Marvel’s move, and its contract terms certainly reflect traditional economic supply-and-demand – there are zillions of writers who would kill for one of these jobs. However, just because Marvel can pay them a modest salary, own all intellectual property the writers create while under contract, and not offer them gross points – it doesn’t mean they should. Although I’m sure all these writers are happy to have the job, how will they feel towards Marvel if one of their movies gets made – and all they received was their modest annual salary? Yes, that writer will likely find continued work with Marvel and other studios, so it’s worth a great deal more in the long run. But there’s one other thing to consider…it’s what Maverick Businesses consider….( I take the term from the excellent book which everyone in Hollywood should read: Mavericks at Work: Why the Most Original Minds in Business Win by William C. Taylor & Polly LaBarre.) Are there intangible gains to be had by being more generous? One might argue that Marvel can afford to be generous. What advances in antagonistic labor relations might be had with a different deal? Can the Whole be made better by strengthening a Part? Are there tangible or even intangible losses to be had by not being more generous? I again refer you Southwest Airlines, which Taylor & LaBarre discuss in their book. The airline reconceived how it operates, by putting itself in the freedom business (“You are now free to move about the country”) instead of the airline business. It is this very concept – this Maverick Thinking - of giving employees the freedom to be their best, that helps distinguish Southwest from all other airlines. Hollywood needs to take a page out of Southwest’s book. Hollywood is all about fear. Hollywood should be about freedom – giving employees the freedom to be their best, driven by what can be done, not what cannot or should not be done….out of fear. Be sure to read Parts 1 -7.