Are Movie Studios Making Themselves More Irrelevant?

LA TIMES: A sequel with the same ending
As they did in the '88 writers strike, the studios are pushing themselves out of the picture. By Thom Taylor - January 3, 2008
The writers guild keeps saying that its strike against the studios is about the future, but one need only look back to the 1988 strike to see that in key ways it is a repeat of the past. Nearly 20 years ago, when the writers asked for a bigger slice of the pie, the studios shrugged and Hollywood sank into a malaise. But out of that emerged new ways of doing business, a scenario that's happening again.

During the 1988 strike, writers worked independently on "spec scripts" (written on the speculation that they would eventually sell them) and a pipeline-dry studio system snapped them up. TV producers also sought alternatives to traditional, high-cost scripted series. The strike resulted in the 1990s' spec script boom and reality television -- two new business models.

It's not strikers' demands but the work stoppage itself that creates a new paradigm. By fighting the writers over the new-media issues today, the studios are effectively creating what they fear most: a major tectonic shift in the entertainment business that will reduce the role of the studios even further.

Generally speaking, before 1988, movie studios -- which then housed genuinely creative executives -- used to "develop" movies starting from source material such as a book, play, life story or pitch and hire a writer to nurture it into a screenplay. They would pay the writer usually a five-figure sum, maybe more, and both sides would see the project through to completion.

In the decade after the '88 strike, studios more often bought fully written "specs," and millions of dollars were thrown at ready-to-shoot scripts. The role of the executive was less creative and more business. The prices for specs escalated to obscene amounts even as studios, in essence, discovered that they were buying only "an idea" and then hiring even more writers to revise, rework and polish it. The process was often financially wasteful and ushered in concept-driven, amusement-park-ride movies. The money's been good, but studios largely relinquished the creation of heartfelt, character-driven films to the independent art-house world.

Flash forward to the current debate, in which studios claim that digital media are too new for them to commit to a particular payment structure. Their response is based on a fear that's haunted them since the arrival of the Internet: "disintermediation." This is cyber-speak for cutting out the middleman. In such an environment, the studios' role (as managers of content) is reduced to nonexistence. Sound a bit like what's been happening to the music industry?

The studios balked at writers' request for a 2.5% sliver of the digital media revenues, and the current strike began. Immediately, many writers emigrated to the Internet, at first generating short videos to virally market their labor messages and now to give creative outlet to their talent. The studios have maintained a misguided "talk to the hand" strategy, so the writers have sensibly picked up their toys and gone to play somewhere else.

The transition to making money from the new paradigm will naturally take time. Right now, anybody with a computer connection can create an overnight sensation on YouTube -- but that's not enough to quit your day job. Yet the Internet is on its way to becoming the public's preferred mass distribution system -- and that means Google, Microsoft, Yahoo, Apple and telephone companies will compete with traditional networks by piping broadband content into home theaters. This sea change has the potential to turn the studios as we know them on their heads.

This evolution is progressing with the creation of every Break, Heavy, FunnyOrDie and MyDamnChannel: sites that give writers total creative control and up to 50% of revenue. Of course, these outlets are tiny compared with the networks' reach -- and nobody thinks the studios will disappear -- but they represent the first step toward the new paradigm that the studios fear.

Even before the strike began, many writers were wondering, "Why are we fighting for only 2.5% of a studio process that's so invariably inefficient?" And now the creative genie is out of the bottle. The longer the strike lasts, the more accelerated the disruptive technology becomes.

The companies will likely make a deal with the WGA in the coming months because all reality, all the time is a losing proposition. (Remember when ABC ran "Who Wants to Be a Millionaire?" every night and destroyed its prime-time viewership?) If the deal is as bad for writers as the studios' original proposal, the companies will feel that they have won the war. But the writers will have effectively won the most important battle: Their role as the creative center of the new entertainment business model has been confirmed.

The studios could have learned a lesson from the U.S. auto industry, which didn't adapt when it faced more efficient Japanese competitors. The car companies forgot that it all starts with innovation. Somehow the studios have forgotten that it all starts with the word.

Thom Taylor wrote "The Big Deal: Hollywood's Million-Dollar Script Market" about how the 1988 strike altered the movie business. He works at a global investment bank.

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Makes sense to me. It seems that at a certain point, many companies expend so much effort to keep things the way they are, they wind up getting hurt by change instead of embracing (and benefitting from) it. I wish big companies could get government protection for risk and progress, rather than being bailed out for clinging to the past.

Oscar And The Film Business

LA TIMES: Oscar isn't Hollywood's face
The academy honors the Helen Mirrens, but the industry is really all about the Adam Sandlers.
By Joe Queenan - February 25, 2007

OF ALL THE creatures on the face of the Earth, only humans would dream of nominating Ryan Gosling for a best actor award for his exemplary work in a film almost no one has seen.

Actually, the only humans who would make such an extravagant gesture are that tiny group of mysterious voters who make up the Academy of Motion Picture Arts and Sciences. Year in, year out, this largely unidentified group of voters — many of them quite advanced in years, some presumably dead — persist in honoring actors, actresses, directors and screenwriters for their superb work in films that are widely ignored and have almost nothing to do with the industry's raison d'etre.

Let's face it. The movie industry is not about "Half Nelson," Rinko Kikuchi, "Pan's Labyrinth," Jackie Earle Haley, "Little Children," Abigail Breslin or Ryan Gosling. The movie industry is about Will Ferrell, "King Kong," Owen Wilson, "Meet the Fockers XV" and, to a greater or lesser extent, all films that either are or resemble "Nacho Libre." Ryan Gosling and Rinko Kikuchi have nothing to do with it.

To bring into focus the extraordinary iconoclasm the academy exhibits each year in its determination to reward films that Americans do not care about, actors we usually ignore and directors we don't even like, one need only consider the very different mentality that prevails at the Grammys.

Two weeks ago, the music industry, as usual, went out of its way to honor insanely famous artists who sell lots of records. The music industry does not dole out its highest honors to gallant but obscure recordings made by gallant but obscure artists; it gives its awards to people such as Madonna. The music industry revels in the fact that it is in the revenue-generating sector; it is in the Justin Timberlake, Ludacris, John Mayer, Christina Aguilera and Red Hot Chili Peppers business. It is in the Mary J. Blige, Gnarls Barkley, John Legend and Dixie Chicks business.

It is not in the Kristin Hersh, Richard Thompson or Pierre-LaurentAimard-plays-Anton-Webern-pianotranscriptions business. True, it does give a limited number of awards to artists such as Chick Corea and Doc Watson, whose records do not sell and of whose existence the public is generally unaware. But it does not give major awards to these artists. If there is a music industry equivalent of Abigail Breslin (who played Olive in "Little Miss Sunshine"), then sorry, no Grammy for Parallel Abigail.

The academy has a different approach. The academy does not want to be confused with its craven, vulgar cousins in the music industry. Even though it is well aware that choosing a middling success such as "Crash" as best picture over any number of "Spider-Mans" is the equivalent of Major League Baseball giving the Cy Young Award to a pitcher who went 11-8, or its MVP award to a leftfielder who batted .268 with 13 home runs and 78 RBIs, the academy loves to honor films that make people in the movie business feel better about themselves.

And why not? No one really wants to think that they started out in the "Citizen Kane" line of trade and ended up working for Talladega Nights Inc. No one is really comfortable with the idea that the face of the industry is Adam Sandler and Ashton Kutcher rather than Daniel Day-Lewis and Ralph Fiennes. Nobody wants to go home after a hard day making Brittany Murphy movies when it would be so much more fulfilling to pretend that work was all about Helen Mirren, Judi Dench and Cate Blanchett.

This is what makes Oscar night so special. It's not so much a case of the industry presenting itself the way it would like to be seen; it's the night when the industry gets tanked up and forgets what it does for a living.

Is this a bad thing? I guess not. Hypocrisy and self-delusion are two of America's most revered traditions, without which none of us could function. More to the point, the academy's self-delusion reaps vast benefits for us all.

The current cover of Vanity Fair — the Hollywood issue — is graced by Ben Stiller, Chris Rock, Owen Wilson and Jack Black. Even for a magazine that once put the dopey, synthetic, rich-boy-discovers-poor-black-people Anderson Cooper on its cover, this is a sad moment.

If this motley crew is the best Hollywood can offer, then the age of radiant movie stars is over. For whatever else this quartet of glamour-challenged chaps may be, they are definitely not matinee idols.

Looking on the bright side, if Oscar night were run like the Grammys, or Major League Baseball, or any of the other organizations that love to hand out awards to people who don't really need them, then the movie stars stepping up to receive their fulsome homage tonight would be Ben Stiller, Chris Rock, Owen Wilson and Jack Black, with Adam Sandler not far behind. This would be a very bad thing.

Personally, I think that any organization that stubbornly refuses to honor Jack Black, even though he will earn more for his worst movie than Helen Mirren will earn in her entire career, is to be congratulated. And so, my hat is off to the academy. The Nobel Prize in literature never goes to a Stephen King or a Danielle Steel; the Oscar for best actor should never go to a Chris Rock or a Jack Black. Leave them on the cover of Vanity Fair where they belong.

Joe Queenan writes frequently for Barron's, the New York Times Book Review and the Guardian.