Is a return to the “Studio System” on the horizon?

If there’s one thing that’s very clear over the last decade, is that the tools of production have become cheaper. But so far only the tools of production – cameras, edit gear, accessories, color timing suites, et al – but for craft skills there seems to be the same dichotomy of old: work for next to nothing in “Indie” production, or hang out for one of the few really well paying (Guild) jobs in the traditional production system.

Neither option is particularly suited to emerging “new TV” or “new media” production.

There is justification for extremely high salaries in broadcast: a popular show makes good money for a network and if paying the stars of, say friends $1 million an episode (as they did in the final year) means they get another year of high-value advertising slots to sell, makes sense. But $6 million an episode (plus the actual production cost for equipment, sets, studio and crew) is not going to fly for “niche” programming, in a 10,000 channel world. Frankly, as actors they were competent enough, but it wasn’t the talent that made the show in the first place. Writing, talent, the way the ensemble works, direction et al all had a lot to do with the success of that show.

At the other end of the equation you have shows like Goodnight Burbank where some of the people make some money off the advertising revenue blip.tv secures for the show. There has got to be a middle ground, where profits can be made by the producer and everyone involved gets a decent living. I’m wondering if a return to the studio system of early Hollywood isn’t on the cards?

In that system, actors, directors, cameramen et al were employees of the studio on fixed salaries. Generous salaries for the day, for sure, particularly for the most bankable, but salaries none-the-less. No $20m payments for “stars” that don’t actually contribute to the profitability of the movie. They may make it easier to market, but the studios today do not get payback or value from the huge sums paid to “stars”. The downside of that system is that the studios (vertically integrated businesses including the cinemas in those days) made outrageous profits off the backs of their employees, leading to United Artists and talent as independent contractor.

It seems to me that there is going to be some sort of structure – cooperative, studio, whatever – that allows a minimum of a decent middle class income for everyone involved, but retains control of the show through the newly democratized distribution system. It would have to have far more transparency in accounting than is common in the current system, so that profits are shared *fairly* with those who are responsible for creating the value.

Yeh, utopian, and probably unrealistic, but I can visualize a system where creative talent gets to do what they love (perform, edit, direct, shoot etc) and get a decent income, in the face of ever more fragmented viewing habits. A hit show today wouldn’t have even been in the top ten 20 years ago and yet, shows are still made and people in the industry still seem to live from their work – those who get to work that is. The systems and methods that worked for 3 channels may not be as suitable for a 500 channel or 10,000 channel world.

What do you think?

5 thoughts on “Is a return to the “Studio System” on the horizon?”

  1. I see the talent (at least the $20m talent) as bringing more than just acting. They’ve generated a whirlwind of media coverage around themselves and provide more marketing dollars than you are giving them credit for.

    I can see where you’re going with this, but feel that what’s even more likely is that you’ll see the tail wagging the dog on things. Those actors are (and many already have) going to be the new bankrolls for whole channels or even blocks of channels. These stars won’t get a 20m upfront payment, but they will get 75 or even 100% of the profit with everyone else that is currently above the line moving back below the line.

    They’ve got the eyeballs on them, and that’s what generates the real money is.

  2. There was an article in the New York times a while back, I’ll try and find the link to it now they don’t hide archives behind a pay wall, that talked about research done that showed the huge payments to the stars did not help a film’s bottom line. Even taking into account the promotional value of the “name”, the film was worse off financially for paying for the “star value”.

    Of course, “Hollywood” has its way of doing things and big stars will continue to get big money because everyone’s afraid to change “the formula”.

    But I don’t think that’s the only way it can, or will, be done when we’re talking about niche content. I don’t think niche content can be profitably made using the old rules; but I believe niche content can be profitable.

    Philip

  3. From Today’s reading:

    “While these entrepreneurial groups have kept mum on the details, a few strategies have emerged. Some want to create a collaborative studio that would be officially sanctioned by the guild; others are looking to create their own studio that creates content solely for the web, ideally bypassing the need to cut TV or movie deals; while others are looking to creating programming that would be distributed via social networks like Facebook.” From http://newteevee.com/2007/12/17/striking-writers-plot-their-own-studios/
    quoting an LA Times article:
    http://www.latimes.com/technology/la-fi-webwriters17dec17,1,2200844.story?page=1

    Philip

  4. I would like to see the niche groups take over and hollywood phased out. Hollywood has become so detached and delusional over their “WORTH” that they have forgotten what it is all about.

    Philip, what can we do to help this change take place? any suggestions?

  5. What can you do to help make the change take place? Jan 22 is the scheduled launch of Open Television Network, the first (and only) unmediated marketplace between content creators and viewers. It’s a micropayment based system built around the convenience of RSS but with commerce added in.

    Fully customized channels for viewers and an easy and simple method of subscribing and buying. Content owners add themselves to the network and add their content as well, then build feeds for themselves for their content setting whatever price the content owner would like.

    When it’s up and running, support content owners by subscribing through Open TV Network and paying a fair price for the content. (If you’ve read previous posts of mine, you’ll know that I consider a penny a minute a good rule of thumb here.)

    OpenTelevisionNetwork.com will get an overhaul and new host in the next couple of days. AT that time the merchant side will be open so content owners can start adding their content to the system ahead of our Jan 22nd launch (post CES, post MacWorld).

    Philip

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