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Hollywood As We Knew It Is Over (But Not For the Reason You Think)

Apr 28, 2022




The biggest change to affect Hollywood isn’t actually the streaming platforms, but that the democratization of media emancipates talent.

Oh the hypocrisy!

I enjoyed Bill Mechanic’s take on the issue. The clichés are true: culture eats strategy for breakfast. Success boils down to people, communications and culture, the rest are means to an end. Mr. Mechanic is no slouch, as per the introduction in his op-ed in Deadline: “as chairman/CEO of Fox Filmed Entertainment in the era of Titanic, X-Men, Independence Day and Braveheart, and producer of the Oscars and Oscar-nominated films like Hacksaw Ridge and Coraline, Bill Mechanic has been part of the fabric of the film industry his whole career.”

Yeah, that’s not too shabby.

BUT, let’s be honest, with WarnerMedia’s decision to concurrently release titles on HBO Max, Hollywood’s royalty is trashing AT&T for something that Hollywood has written and mastered the script for: allegedly screwing people down the food chain. To be clear, I read the Disney story, and while morally I sympathize with the writers, legally the experts seem to suggest it’s less black and white.

And since movies were released in black and white, Hollywood itself (in this case Disney) has done things similar to what AT&T is being accused of via HBO Max. Details may be different, but in principle, it’s the same storyline!

The only difference? Hollywood is upset because it’s no longer in sole control: as I’ve previously written, Hollywood thinks it’s the center of the world, while Silicon Valley thinks it’s the center of the universe.

The change in the distribution landscape and the democratization of media trend means that gatekeepers are losing their grip and are no longer in total control. This means that if Apple+ does not want to green-light Scraper, the project doesn’t merely die, but will likely find a new home based on its merits. That’s a good thing.

But those are all iterative changes.

The most profound, revolutionary change—and what makes YouTube revolutionary whereas Netflix has been largely evolutionary—is that individual creators are now morphing into one-person media empires. When we launched WatchMojo in 2006, I would allude to a pyramid representing content. As a business person, it made most sense to me to focus on the “premium” layer for a few reasons, one of them being that user generated content (UGC) wasn’t exactly beloved by marketers or distributors.

Michael Milken would say that “the best investor is a social scientist.”

In that sense, as an entire generation of decision-makers have now grown up with YouTube and thus UGC, their views of the UGC genre have evolved, and that may be the most significant change in media, because it totally disrupts the traditional definitions of quality, brand-safety, and more critically, the demand vs supply that sets advertising rates, and thus what a licensor would pay for programming.

If you pay attention to that “prosumer” layer, that is actually the area which may be hardest to manage but most likely to disrupt media next.

Why? Because it will be hard for corporations to capture let alone extract value when individuals like Mr Beast become media conglomerates in their own right. Mr Beast’s expansion efforts are nothing but impressive, but it’s the evolution of creators leveraging the web to reach audiences directly.

Changing of the Guard

There’s been a changing of the guard in terms of power dynamics amongst the corporations that rule the landscape: Netflix, Google/YouTube were not influential at the onset of 2010, now they are dominant. We have already seen executives play musical chairs; that Jason Kilar is at the helm of Warner Media is one indication; but even seeing someone like Jeffrey Katzenberg whiff (for once) shows that “something is in the air.” It’s only normal now for this to trickle down to talent, though directors/writers and creators will be affected differently, they are being affected at the same time. In the long-term, talent will not be at mercy of Disney’s or WarnerMedia’s…

The shift has started.

First Phil DeFranco and Jenna Marbles, then Ray William Johnson and Pewdiepie, then Michelle Phan paved the way for Jeffrey Star and James Charles, now Mr Beast. Some focus more on content, others like makeup and style gurus on commerce. But the fact is, they all build a community, and the rest eventually takes off. While the leading faces evolve—some due to changing interest, others due to burnout—the trend is clear: power to the person!

I called them prosumers because they had:

  1. i) the authenticity of any regular consumer
  2. ii) over time, professional production, leveraging better, cheaper and more accessible equipment.

Semantics aside, these individuals are now in the driver’s seat and the only question is whether or not we shall see an Empire Strikes Back kind of moment as we saw with old media staking a claim by embracing new media, albeit late.

Ultimately, these new media creators are the kinds of “storytellers/entrepreneurs” who in the past had to choose between focusing on empire-building or storytelling. The web’s new paradigm—two universes colliding into one sphere as content catalogs merge into audiences means they don’t need to choose. Once they find “platform/format” fit, they would have done so without having to give up rights to their creations and can “own” their audiences, too. That is REVOLUTIONARY!

Show Me the Money!

Frankly, I don’t think the established stars (behind or in front of the camera) will be compelled because their opportunity cost is too high. Denis Villeneuve or Christopher Nolan will not be producing a movie for TikTok (while crazier stuff has happened, it does not seem likely.) Similarly, established talent will not, either—it’s simply not worth the investment of time and effort for the financial return.

When said and done, Hollywood will cry foul, write op-eds and point fingers. Lawyers will make a ton of money, and in the end, the trends will continue where they’re headed.

In the vacuum left by billionaire owners and millionaire creators, a new crop of talent—hungrier, faster, more risk-taking—will emerge. This is how cycles occur, how industries evolve. I get all sides of the debate, but like gravity, it’s not important to know how these forces occur, it’s just critical to know they exist and no one is immune to them.


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