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Friday, May 15, 2020

The decentralization of Hollywood

An interesting analysis of some of the changes coming to Hollywood and the entertainment industry:
In the 1980’s super agent Michael Ovitz positioned his talent agency CAA as one of the most important chess pieces on the board controlling actors, scripts, producers, how studios were bought and sold, music rights, all the way through to sports contracts. Agents held the power. But today the world of agenting is very different and a major power shift is underway.

First, most of the big agencies have sold out to major hedge funds where their first responsibility is to revenue and profits which means yearly growth at all costs. This need to feed the engine has forced agencies to dig their tentacles deeper and deeper into the entertainment community, eking out every possible penny. Spreading tentacles isn’t new. Just read ‘When Hollywood Had a King’ to see how Lew Wasserman came up against the U.S. government in 1962 as he tightened his powerful grip over all things entertainment. In Lew’s case the U.S. government stepped in forcing him to choose between being an agent or running what is now Comcast NBCUniversal — he chose Universal. Today, it’s not one single thing that is cutting off agencies’ far reaching tentacles but a storm on many fronts that is leaving most agencies with very little space to move. The result: massive damage that will likely take years to rebuild, leaving space for others to fill the void.

For one, the Writers Guild of America’s has been standing firm that agents not be able to produce/finance movies. This is essentially exactly what Lew came up against in 1962. This strange practice of your agency, who negotiates your deal, also being your employer has been going on behind closed doors for a long time. But in recent years the agenting world got more brazen about including it in their business model to look more attractive to their new Wall Street owners. This backfired with the Writer’s Guild, seizing the opportunity to win back a little more power into the hands of the writers and their membership, agreed to strike in April 2019. Top Hollywood writers fired their agents and in doing so a key piece of Hollywood power was taken from the agents: 360 packaging (the process whereby agents package their writer, director, producer, and acting clients together so that a studio buys a package and the agency can charge a premium packaging fee which some argue incentivized them to keeps clients’ fees lower so they can make room for their own fees).

If this were all the agencies faced, they could overcome this hurdle and still reign supreme. Historically, agents were masters of their craft in coming up with complex structures for their top clients’ ownership, profit participation, merchandise, box office bonuses, etc. Needless to say, studios were also masters in creative accounting, working to keep as much money in their accounts and away from the talents’ bank accounts as possible. But the game was there. A game of give and take, all pinned to public data around international sales and box office. Playing this game helped agents look powerful and valuable to their clients so they remain signed to a ten percenter.

But then came Netflix and the likes.

Global distribution, hidden streaming numbers, and clear data driven decisions vs booking talent based on industry ‘heat’. Now agents have many of their bargaining chips taken off the table and their creative dealmaking tools are a shadow of what they once were. How much extra value do agents now offer compared to lawyers and managers?

At the same time agencies have pushed hard into new entertainment revenue streams. The biggest: live events for their music artists — the last remaining cash cows for a music industry decimated by streaming technology in the late 1990’s and early 2000’s. But with the global pandemic many of these agencies have gotten caught without a chair to sit on as the music stopped playing in global arenas and stay-at-home orders swept the globe. With COVID-19 nobody is going to concerts — and they won’t be for a good time yet. Similarly agencies were hit with cancelled sporting events where big margins were also made by the agents not only representing athletes but integrating brands and driving marketing strategies.

Through these multiple one-two punches, the biggest players in Hollywood are on wobbly knees and the bell isn’t going to save them anytime soon.
Needless to say, the less power that can be wielded by Jesus-hating, devil-worshipping agents, the better. Also, while we can't say anything about it yet, things are proceeding well on the Rebel's Run front. And by "well" I mean very well indeed.

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27 Comments:

Blogger vmax71 May 15, 2020 8:27 AM  

Allow my early wake up this AM to take advantage of the opportunity and post our ever popular quote:

IS THERE ANYTHING THE CORONA CHAN CAN'T DO???!?!?!

Blogger Damelon Brinn May 15, 2020 8:33 AM  

If CDAN is at all accurate, agents also take first dibs on attractive young fame-seekers before passing them along to the Weinsteins and Spaceys. Yet they've gone untouched in all the metoo-ing, which tells you where the real power is. Hang them all.

Blogger KPKinSunnyPhiladelphia May 15, 2020 8:35 AM  

Unless you provide, as the saying goes, "value added," such as distribution expertise, or coordination that can't be replicated by other smart people, or something of tangible value to the supply chain, middle men WILL be dis-intermediated.

As sure as night follows day. Maybe not today, maybe not tomorrow, but eventually.

For such middle men of character, that is sad. For Hollywood agents, it's a cause for celebration.

But the iron laws of economics apply amorally.

Blogger MaskettaMan May 15, 2020 9:12 AM  

I guess the artists themselves aren't suffering, else the article would have said so?

Agents, record labels, managers... they're just middlemen, not a value add. Caught without a chair to sit on, soon to be left without a pot to piss in.

Blogger Brett baker May 15, 2020 9:17 AM  

Agents.... the only people who edge out financial types as leeches.

Blogger Maniac May 15, 2020 9:39 AM  

"With COVID-19 nobody is going to concerts — and they won’t be for a good time yet."

I was supposed to see Ministry this summer, but the Kung Flu might change that. And based on some of their recent material, I'm thinking that that might not be a bad thing.

Blogger Jeroth May 15, 2020 10:10 AM  

"The Chicoms are taking over Hollywood!"

Taking it over from who?

"Americans!"

Which Americans?

"You know, red blooded Americans like Ovitz, Wasserman, Spielberg, and Weinstein!"

. . .

Blogger Hoyabembe May 15, 2020 10:11 AM  

I guess the current system is why nepotism has gotten out of control. Bunch of turd tier talent like Chris D'Elia running around making garbage.

Blogger Canadian Warlord May 15, 2020 10:55 AM  

Scientology is often described as a cult. I see it as a talent agency and a legal racket that realized the uses of cult-style mechanisms.

Blogger Rick May 15, 2020 10:56 AM  

“a storm on many fronts”

Blogger Jeroth May 15, 2020 11:20 AM  

Canadian Warlord wrote:Scientology is often described as a cult. I see it as a talent agency and a legal racket that realized the uses of cult-style mechanisms.

Scientology was Hollywood goyim trying to organize independence from the Jewish power brokers. They achieved a tiny bit of success at the expensive of creating their own satanic pseudo religion.

Blogger Silly but True May 15, 2020 11:55 AM  

Perhaps agents were needed when legal profession by design worked in arcane language and mephistopholean deal-making and people and the world were far more ignorant of this.

But in 2020, with all of the tools available to artists and creators now, and as artists and creators become their own employer and with their own production and distribution streams within their own control, are agents even remotely a necessity?

Blogger Ray - SoCal May 15, 2020 12:10 PM  

Good article - it shows the huge potential that UnauthorizedTV has.

The article avoids mentioning the censoring, and blatant partisanship due to convergences of the existing players, both movie studios and Internet Giants. Corporate Cancer explains this beautifully.

Blogger James Dixon May 15, 2020 12:12 PM  

> Also, while we can't say anything about it yet, things are proceeding well on the Rebel's Run front. And by "well" I mean very well indeed.

Always nice to hear some good news to start the day. Tell us when you can.

Blogger kurt9 May 15, 2020 12:37 PM  

I read through the Medium piece. It looks to me that it is all positive. Film and entertainment need decentralizing and, the result of which, ought to lead to better content. I agree the demand for content has increased significantly. For example, I watched all three seasons of "Narcos" on Netflix over the last two weeks.

Blogger Crew May 15, 2020 12:44 PM  

I sure hope Rebel's Run does very well and upsets the apple cart even further!

Blogger swiftfoxmark2 May 15, 2020 12:50 PM  

Of course it wasn't six million. They all went to Hollywood and set up CAA.

Blogger Zeroh Tollrants May 15, 2020 12:58 PM  

Tentacles, digging deeper and deeper, eh?
I seem to remember some 19th Century posters that come to mind of a giant octopus with its tentacle wrapped around the world. A giant Lew Wasserman of an octopus.
Kudos to the writer of this piece, I have a pervert visual representation of your words.

Blogger Jeroth May 15, 2020 2:37 PM  

@17 Six million is just adjusted for inflation.

Blogger Pax_Romana May 15, 2020 2:43 PM  

I've been out in LA for 10 years, working as an actor. I've had both agents and managers (of the latter, both managers were DEFINITELY devil-worshippers) .

In my time here, I've gotten most of my jobs myself and can only attribute one or two roles to the work of my agent (and nothing at all to the work of a manager). Small actors such as myself pretty much rely on casting websites, and in 10 years, the industry's reliance on digital mediums has saved us a lot of money.

Blogger RandyB May 15, 2020 2:53 PM  

The agents are the schwerpunkt, in Hollywood and in publishing. Disrupt them, and it all comes crashing down. As we are seeing now.

Blogger tublecane May 15, 2020 3:10 PM  

"This strange practice of your agency, who negotiates your deal, also being your employer"

I always assumed that was the way it worked. Because who would expect some kid from Bumwad, Iowa to pick and choose what movies he wants to be in? More likely, you beg and plead for someone to give you a crumb of opportunity. Then they own you. They handle everything for you, because you're an idiot and what do you know about the real world? They tell you what to do the rest of your career, because you can be replaced with the next guy to fall off the turnip truck.

In the Ancien Regime, of course, the studios owned the talent. They farmed them, grew them, harvested, then sold them off. And why not? They were the ones funding and producing the entertainment. Whence this strange, bastard middleman of talent agenting?

Well, unless I'm wrong, I think it was started by Myron Selznick, older brother of David. Selznick the Younger was bigtime producer of Gone with the Wind and son-in-law to Louis B. Mayer of MGM. Myron I take it couldn't compete on little brother's level. So he found a crack in the system, so to speak, and thought to himself, "Hey, what if I owned these performing monkeys and took a cut?"

The star system was never again what it was under the studios. Not just talking the "neorealist" style of the 70s, which preferred relatively ugly people. The blockbuster era tended not to feature any stars. No one went to see Jaws for Roy Scheider or E.T. for...whoever was in E.T.

Still, the agencies got more and more powerful.

Blogger Ariadne Umbrella May 15, 2020 3:14 PM  

In regards to your new movie, you might want to look at something old Hollywood did, and marvel does now. The studios would license sewing patterns and put the star in the outfit. It has a considerable less risk than manufacturing it yourself. The studios back then had a few companies that would sell patterns of dresses and suits. Today, Disney licenses costumes through Simplicity. McCalls featured patterns by cosplayer Yaya Han. The chain fabric store Joann's, mostly famous for selling mid-grade or lower quality fabric, ordered very nice, very expensive fabrics to sell to make authentic Yaya Han costumes. They do very well at this.

An online version of this would be either building from scratch, selling the patterns of your costume designer by name: they did this before, designers in Hollywood grew famous, or partnering with an already established online pattern selling company because they already have the technical know how of how to get patterns ready for printing and sale. In either case, you are looking at files, not at actual printing.

Taunton Press did unofficial costume magazines for Harry Potter, Jane Austen and Downtown Abbey. For Downtown Abbey, they did magazines of knits and separate magazines of sewing patterns. You are in Europe, so you already see how sewing magazines work, with Burda, Ottobre and so on. The blueprints are stapled into the middle of the magazine. People detach the blueprints and then trace out their size on plastic or sheer paper, then use the tracing to sew the clothes. American sewing has learned to do this, versus single patterns in envelops, via online sewing websites like Pattern Review.

Fan communities make clothes, or buy clothes, or approximate clothes. Even something like Twilight, the basic utility jackets were copied and worn. None of it looked costumey. Regular people could, and did, wear them, during their work days. It wasn't just pre-printed tee-shirts with the movie poster on it. It was everything- jeans, jackets, gloves, hairbands/

Blogger Darren May 15, 2020 3:49 PM  

Comedian Kevin James has a youtube channel, and the last 4 or 5 weeks he has posted his own funny little "short films" that each tell a more engaging and memorable story than most of what #Hollyweird has put out the last 4 or 5 years.
Also he somehow deals with the #Plandemic shutdown tyranny in a *non-political* way... millions of views and positive feedback within hours of posting -- and the production quality is quite high showing there is no reason for video entertainment to cost hundreds or even tens of millions of dollars

Blogger Darren May 15, 2020 3:52 PM  

I am sure real life enetertainment agents make the famous fictionalized one in "Entourage" seem almost endearing.

Blogger Nihil Dicit May 15, 2020 6:16 PM  

This article seems to skim past the sex, drug and pedophilia angles of ticket taking, attempting to make it appear that Hollywood operate solely at an economic level.

Blogger Up from the pond May 16, 2020 10:29 PM  

@17 They went everywhere. Watch the very first few minutes of "Casablanca," you will ROFL.

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