Brian Chirls

Artists as Entrepreneurs

A few bloggers have noticed a post that Netscape founder Marc Andreessen posted last week. He proposes that, given the precarious state of Hollywood’s control over…just about everything, the WGA strike could serve as a tipping point at which the structure of Hollywood changes to one similar to Silicon Valley, where the artists become entrepreneurs and each film is its own independent start-up company. Yet another blockquote:

But here we are, living in a world in which the bottlenecks have suddenly become irrelevant.

I don’t think there’s any question that this is the logical model to pursue in the age of the Internet — the age of free distribution and marketing.

Suppose the writers’ strike continues for months to come — and even beyond that, suppose the actors or the directors also go on strike. In such a scenario, it is hard to see how many companies based on this new model won’t be created extremely quickly — after all, if you really can’t work for the Man, why not start your own company, if you can?

I’m all for it. (It’s exactly what many of my colleagues and I are trying to do – refer to blogroll). It seems that what the WGA strike and the whole “age of free distribution and marketing” thing really have in common is that they are both about power. Big media companies have historically based their value on the power that comes from controlling access to distribution. Similarly, Hollywood has maintained power over the writers (and actors, etc.) by controlling access to jobs. But if creatives can show that they don’t need Hollywood for jobs, Big Media might find itself facing a fresh wave of new competition.

On the other hand, Scott Macaulay at Filmmaker Magazine seems skeptical:

“I think Andreessen overestimates the entrepreneurial business ambitions of most content creators.”

Scott has a great point. For many working WGA writers, big media provides the safety of a steady paycheck. But real upside usually requires taking on risk, and if the writers are serious about the revenue share they’re demanding, they may be wiling to take on some risk. Venture capital investment can help to mitigate that risk while providing quite a bit more independence. Besides, Andreessen’s point is not just that artists are all set to become entrepreneurs – if a year and a half of nothing but reality shows drives away enough viewers, big media may be left too week to keep up either the steady paycheck or the revenue share. That makes the decision much easier.

The bigger obstacle to Andreessen’s model is resolving the expectations of VC investors with the economic realities of the movie business. VC’s spread their risk around a million or two at a time, hoping for one or two big successes (MySpace, Facebook, Twitter, etc.), assuming that the rest will be minor hits or failures. A bit of my own informal research has shown that VC’s expect those successes to attain valuations on the order of $100 million or more. That’s extremely exceptional for an independent film and, I suspect, even for a Hollywood film, once you account for advertising costs. And, as Silicon Alley Insider points out, putting your work on the web in a simple ad-based model is not going to cut it.

What then is the big difference between a successful tech start-up and a movie (or a production company)? The tech companies engage their audience repeatedly, regularly and for an open-ended time. They don’t rely on content alone, but they create expandable platforms that increase their value over time. In contrast, most movies invite the audience to interact a few times at best – theatrical, DVD/download, TV. And each successive viewing is lower and lower in value.

Here are some ideas about how you might run your film like a tech start-up:

• Create a brand for yourself. Keep the quality high and share your story in a way that links your work together and keeps the audience coming back. Individual filmmakers are much better at this than Hollywood is. David Lynch, Tarantino and Wes Anderson have strong identities as artists that keep people coming back to them. Compare this with the branding of any movie studio, big or small. They’re diversified and therefore too inconsistent and impersonal for most fans to relate to.
• Bring your audience into your story. Solicit responses from them as videos, text and sound, and feed that back out to your audience as part of your work. Engage them in an open-ended way, motivating them to bring in more fans, creating a network effect.
• Give your audience more ways and better reasons to pay you. Again, I refer to Radiohead’s example of providing the high-value, tactile Discbox. Also, shirt, posters, live performances, additional content, etc. And let your audience know that their money is going to support you, the artist, not some faceless corporation burdened with distribution and advertising costs. If you’ve managed to involve them in your story as above, they may actually care.

These were all ideas that helped spur audience growth for Four Eyed Monsters. That film was funded with credit cards; how much farther could we have pushed it with venture capital funding? There’s room for many more such ideas. Please comment if you have some to share. I’d love to see someone (Mr. Andreessen, perhaps?) propose a financial model as a target for what it might take to get the venture capital model going.

Update: The L.A. Times has a story about Hollywood writers seeking venture funding for web startups, via CinemaTech’s Scott Kirsner, who has his own take on the matter.

Tags: distribution, entrepreneurship, marc andreessen, scott macaulay, startup, strike, venture capital, WGA

This entry was posted on Sunday, November 18th, 2007 at 11:19:56 pm and is filed under Articles, Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.