Say Goodbye to Hollywood ?

There is an article on Marc Andreessen's blog, essentially arguing that Hollywood will start to look like Silicon Valley. I found it interesting for two reasons:

(i) It describes the crunch in the aggregation phase of the media supply chain as new technologies (reducing transaction costs of content generation, search, recommendation and distribution) moves value from the middlemen to the value creators and end customers. This is interesting because we agree, and have been saying so for years, and its great when a voice like M.A. says so too.

....there are a lot of historical precedents even in the media industry for the model of talent as owners, going all the way back to the original United Artists in 1919. Some of those precedents worked great -- George Lucas, for example. Some flamed out. Of course, they were all up against the bottlenecks.

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

(ii) It argues that the startup mentality of SV will win over Hollywood. This is interesting because many "New World Order" pundits have held up the Ad-Hoc, project based nature of Hollywood's modus operandi as an example of where the future of work will lie rather than the startup based nature rather than the SV model.

Its thus interesting to think about the pluses and minusses. Silicon Valley stands for Darwinian Evolution writ silly - irrationally large gobs of capital chasing unfeasibly large numbers of me-too clones of whatever the sexy tech du jour is, and then every so often all falling down in dinosaur-killing busts.

The Ad Hoc model is more steady state (or at least the overfunded clones are serial - Popular Movie II etc) but in essence it is a less stable model for anything except a project based endeavour - you can't run a business off this model. In addition, the Ad Hoc model only gives stakes in the success to a small number of principals so it is more expensive early up - it has to pay more people at full price as it can't defray the salaries with future promises of benefits - aka stock options.

However, it has the benefit of being lower cost in setup and teardown, and seems to map quite well to the way work "works" in many creative / knowledge based industries today - whereas we all have heard the stories of Grade A a**holes ruining life for everyone else in a structured heirarchy, but being kept in situ by said structure and options. (Not that there are not A-holes in Ad Hoc groups, but you get shot of them next project). The Ad Hoc model seems to be the preferred option for those increasingly valuable talented creatives and knowledge workers, and just as Hollywood's studios are looking a bit antiquated, we wonder if the traditional startup business heirarchy isn't looking just a tad outdated too?

So....we would suggest that not only will Hollywood start looking more like Silicon Valley, but Silicon Valley will start to look a bit more like Hollywood too.....