top of page

BASTARD CLASS

Not A Mission
Statement

Trust your intuition and success will follow

AJ St.Clair

I want to be clear at the start, this is not a mission statement.

If you saw Jerry Maguire, then mission statements can

be problematic; getting fired by Jay Mohr can’t be a Tom Cruise

hi-light. This is merely a brief summary of thoughts occurring

over safely-distanced BBQs about the state of the industry

(I like EIC, entertainment industrial complex which reflects

the increase in “business” and the decrease in “show” over

the last decade).

on the outside looking in.jpeg

Television: Clearly the rise in digital platforms and streaming is the beginning, middle and end of that story. Yes, but nothing happens in a vacuum.  In law school they love to hammer into unsullied minds, “Nothing happens by accident and policies have consequences.” I believe that understanding how and why things happen helps you protect your self in the present and assist making educated guesses about how one’s chosen field will change in the future.

 

Lunches with Stephen J. Cannell will teach you a lot. Battling dyslexia to become a writer is like being born with one leg shorter than the other and becoming a sprinter. Cannell’s resume as a writer/producer is impressive. He described the end of the golden age of television to me thusly: “It all started with the death of the ‘fin-syn’ rules...” Written to prevent TV monopolies, the Financial Interest and Syndication Rules prevented networks from owning the content they aired in primetime. Since the airwaves are a US asset provided to the networks for free, this rule meant the nets could select the best shows produced by independent companies (good quality is good for the consumer) and would never lose money because they wouldn’t buy a show for more than advertisers were willing to pay for commercial time (good for the network). Alas, this is a story of greed and they never have happy endings. Even though independent TV producers paid a fortune to find, develop content, and then shoot pilots - most of which never got picked-up by the suits - every once in a while they would make a show that was…a hit! Five years on the network meant syndicators would have enough episodes to air in secondary and foreign markets and they would cut a check to these prodcos for hundreds of millions of dollars. This occasional home run is what allowed the nets to run shows like All in the Family, so talented producers like Norman Lear could stay in business…and the nets? All they needed to do was bask in power and party without any effort. (Beyond merely picking shows, and if you watch the NBA draft, picking a Zion Williamson is not difficult).

# 2 it's the thought that counts.jpeg
Whistling Jay.jpg

But, the nets got jealous. Ignoring all the risk and the hard work they only saw the occasional big payday. “The network suits’ didn’t want a piece, they wanted the whole pie.” –Stephen J. Cannell. Leaning on Yale grad George H. Bush and eventually killed by Yale Law grad Bill Clinton, the fin-syn rules were gone in ’93, and now the nets could finally own their programs.

 

Gee AJ, networks own their shows, so what? Remember, “policies have consequences”? Talented writer/producers retired to write novels or direct a movie and what the broadcasters soon discovered for themselves was creating quality-engaging programming was hard. This was precisely at the moment cable saturation peaked. Of course now competition is off the charts with the dominance of digital platforms, all of which provide creators with less bureaucratic oversight and more artistic freedom. In the face of increased competition and decreasing viewership, the networks have pursued what I call a “Sears strategy.” [For those of you who don’t know, Sears was a brick and mortar retailer that had something no one else did; a catalog. That’s right, wherever you lived in the world, you could order everything from a lawnmower to underwear and have it delivered to you. Sound familiar? Well, at the exact moment in time the Internet was becoming “a thing,” Sears decided to cut costs to increase profits by losing the catalog. Capitalism teaches; “If you can’t increase sales to increase profit, cut costs!” The “cheaper is just as good” idea keeps execs in juicy bonuses. Using capital to take risks and expand is anathema to many established 

businesses so, instead of putting the catalog on the new web and becoming “Amazon,” Sears began a slow death spiral.] Back to the networks, as the World changed, how would they respond? In its heyday, television provided some good programming for free. Then they followed a “cable business model” where you got pretty much the same shows but now you paid. (Originally as drafted, The Telecommunications Act of 1996 included a provision that capped your cable bill at $12, but that was deleted. That did not stop Bill Clinton from signing it though, thanks Spectrum!) Unable or unwilling to compete with their new digital competitors, the nets started to cut risk; less ground-breaking new shows meant a reliance on low-cost entertainment, game shows, remakes, and multiple versions of the same show (The Bachelorette – Magnum PI – CSI Barstow). I see two reasons why this happens; one, lawyers run an amazing amount of entertainment, and those vampires love IP. Capitalizing on intellectual property that you already own is a cost-saving device…in the short run. Two, the nets lack a vision for the future and are letting it be written for them. This is a self-fulfilling prophecy; as programming becomes cheaper and weaker, the result is lower viewership. Fewer viewers equal lower ad revenue.  Rinse, repeat and irrelevancy is on the horizon. But ask Spotify if they’d like to have a shot at retaining the number of eyes the net’s still have access to? My guess is you’d get a resounding “yes,” and a commitment to doing anything new and original to keep those eyes. (Note that the number of viewers in a week for Schitt’s Creek might be 800k, the number of viewers for the first showing of a Charlie Sheen-driven Two and a Half Men episode, 14-16 million)

# 3 j grad.jpeg
frat 2 (1).jpeg

When I was a wee lad, “game show host” was a punch line. (In “If I Ever Lose My Faith In You,” Sting sang, “You could say I'd lost my belief in our politicians. They all seemed like game show hosts to me…” – you may have noticed we actually elected a game show host President). There were a whole plethora of people who vied for the available game show gigs but they didn’t compete with scripted entertainers. Today? Let’s ask Alec Baldwin, Jane Lynch, Anthony Anderson, Craig Ferguson, Wayne Brady, Dax Shepard/Kristin Bell, Mayim Bialik, etc. all of whom should be working in film or starring in episodic TV yet host game shows to make a few extra bucks - if this was their dream job. I believe talented entertainers hosting game shows are a visible representation of the failure of modern content creation. Talent aside, what does this mean for the consumer? Better game show hosts can’t be a bad thing? No, but the lack of independent producers means advertisers will take more control of content, and having corporations decide your content means one less voice looking at the actions of the corporate elite. Not good for democracy and worst of all? Boring.

“Not so fast Buckaroo Bonzai! That may be true for nets and cable, but not streaming.” That argument might be good…today. Netflix is already two-tearing its subscription base, that Gieco lizard for the masses, no lizard for the elite. Apple and Amazon are big enough that they can actually be the single-advertiser (brand-maker) of their content. Do you really want Jeff Bezos deciding what shows you should watch? He’s already affected the Washington Post’s editorial stance, and we remember how Rupert Murdoch killed the Wall Street Journal’s credibility. However, I predict Apple and Amazon will seek to maximize their revenue once consumers get used to paying for their content. Soon they will open their doors to various new forms of incipient advertising. And it’s TV all over again.

​

Film: Let’s wrap this TV chat-fest and cross-over to some ruminations on film by underscoring the former term; subscription base. This is the modern business model. Television used to charge advertisers for riding on the tails of content. Neilsen Ratings would rank the shows, and advertisers paid more to put Flo on a top show; more viewers equals more cost per commercial. In film, the model was even easier; you put your film in a theater; more viewers means more money, more money means the audience liked the movie. A simple revenue-based feedback loop that determines “quality.” Now, streamers base revenue on new subscribers, not ad revenue. Clearly that is not the TV model. But is it like film? If you have good content, won’t you get new subscribers? This is not a new model - it’s the HBO model! But, it remains the crux of the question. HBO had ratings; if The Soprano’s or Game of Thrones were rated well, people signed up. Notice that when GOT ended, subscription rates plummeted. But who determines what is good on Apple, Amazon or Netflix? Are we to believe that there is actual transparency in the digital landscape? Quite the opposite, I believe it would kill Facebook if Zuckerberg actually told you what the real penetration of F’book was - not to mention how his ad revenues would plummet. The truth is, there is no mechanism for determining quality in the new EIC. Netflix wants more subscribers, so they

Jay with Camera .jpeg

need content to lure them in. They budget a new Will Smith movie (Bright) at an astounding $200M. Now the budget isn’t weighed against potential revenue, it’s weighed against potential new subscribers.

I googled “will smith bright,” and the top response was, “Why was Bright such a bad movie?” The easy answer is that it simply does not matter to Netflix if the product they sell is good or not. This is truly a “Brave New World” in consumerism; a disconnect between quality and product! If you’re a capitalist, it’s the most anti-capitalist development we’ve seen – Adam Smith is rolling over in his grave. Truly, it is the equivalent of Soviet communism, where the masses have no say over the products developed by the State or their quality. (I have never heard this comparison, but, I assure you Bezos, Hastings and Cook would go crazy with denials.) In this new Digital Corp-oratocracy the consumers voice has been diminished. (Much like Justice Kennedy disenfranchised voters when he gleefully handed down Citizens United allowing all corporations, including foreign corps, the ability to pour unlimited money into elections drowning out the voice of voters). 

 

As I said earlier, policy choices have consequences. One that I’ve noticed from the development of this new digital environment is the loss of “American film.” What does this mean? American film was a development of the industrialization of the early 20th century. If Ford could figure out a way to make cars more efficiently, then the same could be done for filmed entertainment. Nobody put this model to test better than Hollywood - a company town, like Detroit, but instead of cars, they made dreams. Hollywood developed a system that required maximum collaboration. Like any company, a studio had writers in one wing, actors on contract available at a moment’s notice, directors were the project heads but replaceable (4 directors worked on The Wizard of Oz) and producers oversaw it all – and they were ultimately responsible for success or failure.  Studios knew one thing: You can never predict the success or failure of a movie, so you make ALL kinds of movies. This shotgun approach served different audience tastes. (Do be aware of Hollywood commandment number four, “to make a great film you need three things – the script, the script and the script.”-Alfred Hitchcock.) In the ‘80s studios saw that making films was hit-and-miss at the box office but distributing films someone else financed was a guaranteed winning revenue stream. So, the business model changed from producing content to distributing content. This had the effect of ending collaborative filmmaking as a model and shifting to the European model of the “auteur” filmmaker. (In the post-war era, re-building European countries had smaller resources to devote to content, so the auteur model developed. One director/writer with a small crew and a stunted budget would make films with a unique vision reflecting the auteur’s personal voice.) This gave rise to great auteurs like Quentin Tarantino and not-so-great auteurs like Roger Corman.

​

Altering this model to emphasize revenue over storytelling has had a ripple effect throughout the industry. Without an active industry to manufacture product, the steady supply of investment capital has shifted. Unions have been hit hard. Once the key to quality production, companies like those formed by Tyler Perry moved out of state to avoid paying union rates. SAG even approved paying minimum wage to their members. Like Detroit, the money that paid those who manufactured the product diminished while those few performers at the top of the pyramid controlled even greater benefits. Indeed, in the new streaming model, the package - not the script - drives production now. [Side Note: Is there a film that I think captures the American Century? Yes. The Apartment. Capitalized on later by the excellent Mad Men. And the best American director was an Austrian Jew, Billy Wilder who described himself thusly; “I’m a writer who directs his movies to protect his stories.”]

# 6 Jay with Camera in Rome.jpeg

To summarize the changing landscape, we’ve seen networks and studios deemphasize production, this drove viewers to cable. Once cable took hold, the effort to hold America hostage with rising prices in the face of lessening quality led to “cord cutting” and opened the field to streamers who now face minimal competition. Are there any other significant changes to note? When I sat on the lit desk at one of the big three agencies we surreptitiously discovered the revenue for the agency was split 51% from real estate investments and 49% from the actual business of “agenting.” Today, the major agencies derive close to 80% of their revenue from production, investments and other non-agency related activities. I’m sure (fill in the blank with your favorite  staaar ____) thinks they're  central to his/her agencies’ interests but really, how important are his/her career when they only represent a fraction of 20% of agency revenues? Recently CAA laid-off some 300 agents, this can only be a signal to the industry that they are preparing to divest themselves from representation. (This would be comparable to the antitrust violations MCA faced when Lew Wasserman was forced to forego representation entirely to acquire Universal and focus solely on production.) Since the days Mike Ovitz strode Hollywood like a colossus, the big agencies filled the void left by studio-producers turned distributors and have been the de facto puppet masters by determining which projects get packaged/financed and eventually released. I think the long-term impacts of large agencies being replaced by several smaller representatives will be varied. Small agencies focused on the business of representing client interests instead of their own will be great for all talent and should empower underappreciated voices of color and less noticed social strata’s. It will also empower larger management companies and their ingrown conflicts of interests. How does it make sense that an agent can’t represent a client and simultaneously produce but a “manager” can? I’ve already seen successful managers shift focus from “client career management” to what can they can produce that returns the most benefit for their company… This bodes poorly for artists because, let’s face it, many “managers” are just people that 

couldn’t pass vetting at CAA, WME, etc. Finally, removing the large agencies leaves its own vacuum that will be filled by, Tah-Dah, the big streamers. This raises the question that I’ve been avoiding, “will a content landscape generated by Silicon Valley be better or worse for the audience?” For Amazon and Apple, the answer is no. You cannot have a company dedicated to one action and produce products as a derivative that routinely good. Anyone who followed GE saw a great energy company that tried to be everything to everyone until it collapsed under its own weight. With Netflix and its iterations, the answer might be yes. Yes…IF they can find a way to emphasize quality control in the face of its business model.

Summary: Is there a silver lining? Yes. There always is. As the world tries to navigate the roiled waters of entertainment, streamers require far fewer viewers to justify the effort of producing content. Instead of one studio making a mega-budget Avengers, dozens of new voices can be heard and empowered with a Moonlight or Sound Of Metal. And, as we’ve seen, these new auteurs will have maximum control over their message, who delivers that message, and how that message is delivered. The difficulty will be in getting your message heard over the noise of an ever-increasing digital divide. There are 1.9 million apps available on the app store – 2.9 million on the Google Play Store. This approach of “more is better” is really “more is just more” and will not work here. Storytellers are artists not businessmen. Making them perform both roles will stifle creativity and lead to entertainment driven by highly motivated copycats. The good news is that as the audience turns away with a yawn, someone will step up to change the model. They always do. This time, hopefully, for the better.

# 7 unnamed4.jpeg
bottom of page