Back-end rules. Change & experimentation in the movie biz.
Last week the NY Times ran an article Bridging the Gap – the Sequel about the failed efforts of Hollywood & Silicon Valley to bridge the cultural divide. It highlighted the movie business and its historical (hysterical?) requirements for cash and not equity, which reminds me of a few movie ventures I have been involved with over the last few months.
“Last year (Daniel Scheinman, a senior vice president atCisco Systems) met with an affluent film producer who marveled at the extraordinary riches afforded to Google executives. Mr. Scheinman told him that most got wealthy accepting stock options instead of million-dollar salaries. When Mr. Scheinman asked whether the producer would ever accept equity instead of cash if they worked together, the moviemaker sniffed.
“I fly a G4,” he told Mr. Scheinman, referring to the Gulfstream jet he owned. “How far do you think my G4 will go on stock options? I need cash.””
Like the upfront in Advertising, the movie biz have functions in its own way doing the same things and expecting different results as their box office returns continue to head south.
Most in the bubble/echo chamber function within their walled garden – our way or the highway. Same old same old. It is no wonder the Indie folks are looking for ways to do business differently. And they are learning and are somewhat open to different structures and connecting to understand how the other side works and communicates. It is the classic cultural divide of “creatives” and “suits”; “technology” & “sales and marketing”; “editorial” and “ad sales”. Why should the movie and money biz co-exist any differently?
Most in the movie biz are paid based on hourly rates. Most in charge do not share the proceeds (if any – see back-end accounting) hence those lower down the food chain and their need for cash. How about motivation by throwing some bones in the form of equity in the movie to all who participate in getting it made – not just wages and not backend. Most movie folks are not even open to this even though they talk about wanting to change the system.
The business (including the unions and the “creatives”) have to see the light in a consumer generated world. When the price of not changing becomes too great not to change, people get religion and change how they do business. Does that include “creatives” who value their art in all respects above long-term entrepreneurial opportunities to potentially make vast amounts of money. That is difficult to see when one looks at the picture from centuries past of struggling artists against a current backdrop of the studios spending $100 million on failed blockbusters - while Indie producers can’t find $3 million to make their movies! No wonder the money and audiences go elsewhere now that there is more choice.
Leave a Comment