Guest Post: Robb on the Writer’s Strike
Nov 5 2007

Here is a spur-of-the-moment guest post by a friend of mine, Robb Lanum, who blogs at The Robblog.  The writing industry is his scene, so his opinion and thoughts are much more relevant on this topic than mine are.  Plus, he brings up the term ‘entrepreneur’ a few times in his reply!

I forwarded him Marc Andreessen’s post on Suicide by strike today on the writer’s strike going on in Hollywood.  Robb did not know that this post was written by Marc Andreessen, co-founder of Netscape, Opsware, and now Ning, when he sent his response via our friendly email group (which started as a ‘reply all’ list, then a listserv, a yahoo group, and now is a google group) that has interestingly been going on since 1995…well before all the major social networking sites existed.  Here is what Robb had to say:

 Marc’s comments:

>If you’re a mogul, the key question has to be, what would the founders
>of my industry have done in this situation? Really, what would they have done?
>Thomas Edison, Darryl Zanuck, Jack Warner, Irving Thalberg, Adolph
>Zukor, David Selznick, Louis Mayer, David Sarnoff, Bill Paley, Walt Disney…

>In a nutshell, would they have crawled into a hole of protecting the
>status quo or would they be forging a new, exciting, optimistic future
>through force of will and creativity?

>Why aren’t you doing what they would be doing?

Robb’s reply:

A very good article.  This writer is correct but the connection that he doesn’t make is that those guys who built the industry were entrepreneurs who ran private companies who could risk it all. The moguls that the article is addressed to are not individuals anymore – they are multinational public corporations.

The truth is that the guys who made Hollywood WERE faced with earth-shattering revolutionary change MANY TIMES and rolled with the changes – and lightning-fast. Silent black and white movies were killed by sound black and white movies were killed by sound color movies were killed by TV. TV was very analogous to the creation of the internet – it was just as devastating to the model as the changes are today. What did they do? The old-school moguls adapted by the seat of their pants and moved quickly.

What has changed since then? These guys were all bought out by multinational public corporations in the 1970s, or sold out to IPOs to become multinational public corporations themselves. There are so many layers of bureaucracy now it is unbelievable, and nobody can move anymore, and certainly not fast. When TV threatened to kill movies and literally kill his business, Walt Disney got a crazy idea and responded by simultaneously (1) jumping into TV – which nodoby else dared to do – and (2) inventing the theme park to invent his own new model of content which also created its own new form of distribution (people would come to the park) – an entirely new model of content and distribution which he would own 100%. TV trumped movies so he trumped TV! How many layers of management did he have to convince of his idea? Zero. Stockholders? Nope. He made the call and took the risk. Impossible today. Did this impact his writers/actors/directors? No. They kept on producing content. The American entrepreneur figured out how to sell it.

What is happening now is that middle manangement/corporate bureaucracy is getting squeezed as the guy nailed in the article. They don’t like it and they are trying to push that off to the creatives. The creatives don’t care how their work is distributed – they don’t care at all, they just want a very small percentage of the eventual profit. The residuals we are talking about are a lot of money but a very small rate of royalties. The creatives don’t care how their work is distributed, that is not their headache. That is the job of management. Management says “distribution is so much harder now with these technologies.” The writers/directors/actors say “be bold – figure out how to sell it.” Mega-corporations don’t know how to do this, and the creative people who DO know how to do this (Steve Jobs) wouldn’t be caught dead working for somebody else’s corporation – they’re going to make their own. The publicly-traded corporations are creatively bankrupt, virtually by design. It could not evolve any other way really. Do you want to work for a corporation or do you want to control your own destiny? Creative types will answer the same way 100% of the time.

This is not a crisis of the writers – this is a crisis of the entire model and a crisis of adaptation.

The best idea I have heard about how to continue to make money in the changing technology economy is to do what TV did. TV content is not free to the consumer, it just FEELS like it. This is the key. People watch TV “for free” but forget they are paying $$$ for products whose cost is marked up to pay for ads. On the internet, people exchange pirated music and videos “for free” but forget they are paying $$$ for internet connections and hardware – but it FEELS free. With iTunes TV and movie downloads studios make it easy to download high-quality content without exotic equipment or connections – but then they screw it up and make the money exchange part of the experience. That is convenient but it doesn’t “feel” free. What if they made it “feel” free by having an internet plan that was priced higher but included all the free music and TV and movie downloads you wanted? Every kid in the U.S. would have this – every iPod would be full of music, every hard drive would be full of movies and TV shows. Everybody kid in the U.S. would pay for these extra iPods and extra hard drives and this internet plan – and all that little bit of extra money on each would go to the studios and management and the creatives.

What if a movie studio created its own satellite TV service like DirecTV. You pay $49.99 a month and everything is included – movies on demand free, like pay-per-view without the pay. All the movies and TV shows you can record, all included in the $49.99 per month. Where does the money go? Back to the middle management. The creatives get their small percentage of royalties like they have for decades. And it all feels free to the consumer. Everybody is happy.

Author: Aruni | Filed under: entrepreneur, entrepreneurship | 1 Comment »

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