What if they’re doing it right? The Netflixes, Disneys, Amazons, adapting new technology as quickly as it becomes available, maybe even a little before, while laying off thousands of loyal blue-collar workers all at once, driven by the bottom line. What if these decisions save Hollywood?
The fundamental question is this: Is Hollywood moving at the speed of business or is it blundering away an agglomeration economy? (a localized economy in which a large number of companies, services, and industries exist in close proximity to one another and benefit from the cost reductions and gains in efficiency that result from this proximity)
Cue the boo-birds. I know. I’m booing right along with you. To be clear, I’m not advocating for any specific thing that is happening. I have dozens of friends and a wife who are acutely affected by this industry’s sea change or rather low tide for jobs around town. Nor am I saying that any of this is fair, good, or legal.
Just… what if…
Hollywood’s Reputation for Tech is a Mix of Cutting Edge Systems & Outdated Workflows
Hollywood has a reputation for being risk-averse when it comes to adapting new technology. You might be surprised to hear that if you are reading this and don’t live in Los Angeles. In my experience, Hollywood is a mix of cutting-edge systems being shoehorned into outdated workflows that never seem to die.
Let me make the point using a fictitious post-house I’ll call OmniSync. Let’s suppose that OmniSync finishes 20 one-hour episodes of television per week. They regularly receive network notes 24 hours before airtime. By making even a tiny creative change, OmniSync must re-exporting and upload large files for final delivery, which takes hours. Sound mixing rooms are booked for $1,000+ per day. If producers don’t finish their worked in the booked time there is no possibility to book an additional day because the mixing room’s schedule is jam-packed. To screw up this finely oiled machine all an editor has to do is click that little “update Mac OSx” notification in their system settings, potentially costing OmniSync six figures. That’s why OmniSync doesn’t change a thing. They use the same workflows for years and make updates all at once.
OmniSync also knows that every workflow must modernize. They invest in a team of engineers who test cutting-edge technology based on customer expectations and their best guess for technology trends. Timing this update is key to OmniSync turning a profit. Equipment is a capital expense. In terms of the equipment they have now, each reuse makes it cheaper. It’s more economical to keep a system for ten years than it is for two.
Maybe this stop-and-go approach to tech innovation is out of date.
The Human Cost of Moving Fast
Today, some of the most advanced technology on the planet costs $20 a month. Perhaps OmniSync should blend the testing of new technology into every show they make, continuously updating their tech instead of doing a single major upgrade every decade.
Leading technology companies already think this way. Sometimes, the ramifications of this rapid form of tech adoption means that creating complicated visual effects suddenly doesn’t take a team of 100 people three months, and a million bucks to complete. Workers are let go unceremoniously, without consideration for their past contributions or the opportunity to change alongside the tech. In short, the tech changed faster than any worker could adapt.
I know what you’re thinking; this is not fair. And it isn’t. Companies should show loyalty to the people who made them successful in the first place. When Disney laid off 1,000 employees – many from Marvel’s Academy Award-winning Visual Development team that quite literally earned them billions of dollars over the last few years, pumping out theatrical hit after hit – it meant that 1,000 talented people woke up wondering how they were going to pay the rent. These are the human reasons companies should move slower, which sadly, rarely make a good case to the company’s bottom line.
Hollywood Faces Stiff Competition
Hollywood is getting outcompeted by everything, everywhere, all at once.
We all know the reasons why: the pandemic, labor strikes, YouTube creators, cable cord cutting, lower barrier to entry for new filmmakers, decentralization of production & post, and of course AI. The list goes on. Heck, even this Baby Shark video with its 17 billion views and 85 million subscribers is now our competition. By comparison, it’s not likely that 85 million people subscribe to Apple TV+ (though the number is not public).
Market forces are like gravity. You can rebel against them. You can defeat it grandiosely by fly high in the sky on an airplane or as simply as lifting your foot off the ground. But eventually the force of gravity will pull you back down to earth. Competitors innovate and catch up. Supply meets demand.
Is Hollywood Still the Center of the Entertainment Industry?
Hollywood is being pulled down by the gravity of larger market forces. Too quickly, maybe. Definitely. Callously? Absolutely.
When I moved to Hollywood, the biggest producer in town was Viacom, who in 2006 owned Paramount in addition to MTV, Nickelodeon and Comedy Central. The company was valued $24 billion. Today, industry consolidation has made a billion dollars a drop in the bucket. Netflix is worth $369 billion. Ten times the size of Viacom at its peak. And Netflix is the small fish fighting for survival in an ocean of tech firms that have valuations starting with $T’s. These new, larger companies are no OmniSync. They don’t have ten years of waiting around before adapting to change. Change is part of their ethos and they are judged for it by stock holders on every quarterly earnings call and every day’s trading on the stack market.
An object’s gravitational pull is based on its mass. The larger the mass, the stronger its pull on other objects. Hollywood is no longer the center of mass around which the entertainment industry rotates. We are on the periphery. We are being thrown around in proportion to our mass. While I do believe that the best artists, directors, writers, and editors reside in Los Angeles, the entertainment industry must now part of a portfolio of “services” that much larger companies provide. Apple TV+ and Amazon Prime Video are not the most important part of those companies bottom line.
We’re getting wobbled from the other end, too. Plenty of independent creators are making great businesses wherever they live, attracting viewers and advertising dollars.
Are we Evolving or Are we Dying?
I don’t know if what we’re experiencing is Hollywood’s last stand or a metamorphosis. Let’s hope that all the pain leads to growth in the end. Maybe we won’t be laid off by AI – we will lead the world in its adoption. OmniSync will make thousands of hours of content in the time it previously made 20. We could, just maybe, rise from this historic production downturn and become a technology epicenter that is no longer slow to adapt to new technology. We move at the pace of business.
Whatever comes out of Hollywood on the other side of this tech transition, I hope will keep Hollywood in its place as the world’s greatest story-making engine.
Read more at the EditMentor blog.
