What if they’re doing it right? The Netflixes, Disneys, Amazons, adapting new technology as quickly as it becomes available, maybe even a little too early, 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, legal or proper.
Just… what if…
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 In my experience, Hollywood is a mix of cutting-edge systems being shoehorned into outdated workflows that never seem to die.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 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 you don’t get all the work done there is no booking 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 millions. That’s why OmniSync doesn’t change a thing.
However, OmniSync also knows that every workflow must modernize. They invest in a team of engineers who test new technology and plan for the implementation of the next wave of tech updates. Timing this update is key to OmniSync turning a profit. Equipment is a capital cost. For each use it gets 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Maybe this stop-and-go approach to tech innovation is out of date. 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.
The human cost of moving fast
Some leading companies already think this way. Sometimes, the ramifications of this rapid form of tech adoption means creating complicated visual effects suddenly doesn’t take a team of 100 people three months, and a million bucks to complete and workers are let go seemingly out of the blue and with no chance to adapt alongside the tech. The tools changed faster than the people.
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. There are other reasons that companies should move slower. Human reasons. 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.
Let’s zoom back out for a moment and look at the marketplace for entertainment more broadly. If all of OmniSync’s competitors adopted new tech continuously while they only made changes once every ten years, they would lose business to their 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, and of course AI. The list goes on. Heck, this Baby Shark video has 17 billion views and the channel 85 million subscribers. By comparison, it’s not likely that 85 million people subscribe to Apple TV+ (though the exact number is not public).
Market forces are like gravity. You can rebel against them. You can get miles ahead by flying high in the sky on an airplane. You can defeat it as simply as lifting your foot. But eventually the force of gravity will pull you back down to earth. Competitors innovate and catch up. Supply meets demand.
Hollywood is being pulled down by the gravity of market forces. Too quickly, maybe. Definitely. Callously? Absolutely.
The new center of mass
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.
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. And we need to adapt, yet again, and as quickly as possible.
My point is only this
Let’s hope that all the pain, the layoffs, the damage to Hollywood’s reputation could be a molting of the skin. We won’t be laid off by AI – we will lead the world in its adoption. Our workflows will hum. OmniSync will make thousands of hours of content in the time it previously made ten. Our VFX articles will all be wearing Apple VR headsets all day! Ok, maybe not that. But we could, just maybe, rise from this historic production lull and become a technology epicenter that is no longer slow to adapt to new technology. 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 storymaking engine. If any of this resonates, we’re digging into it more on the EditMentor blog.
