As Hollywood’s mini-recession gathers steam, there is a great deal of attention being paid to various extraneous factors, such as the shift of production to Canada, Australia and other low-ball havens. But the real problem may lie closer to the people at the top of the industry.
It’s been decades since the studios were anything like the entrepreneurial companies that turned Southern California into the dream capital of the world. The Hollywood of the past was dominated by hard-driving, not very pleasant egomaniacs Louis B. Mayer, Walt Disney, Jack Warner to name a few who also had the virtue of being creative company builders and visionaries.
Today the studios are still largely run by hard-driving, not very pleasant egomaniacs but unfortunately without the compensating core of entrepreneurial and risk-taking guile. Over the past few decades, and increasingly today, the studio elite seems to consist of MBAs, lawyers and hangers-on whose vision is limited to the whims of their corporate masters in New York, Tokyo or Sydney.
“There’s a question of where you go to get the creative input in the new studio environment,” suggests Cody Cluff, president of the Entertainment Industry Development Corp. and a keen industry observer. “With the MBAs and Wall Street types in control, do they understand it?”
The answer, Cluff suggests, is probably not. But that doesn’t mean creativity and entrepreneurship are dead in Tinseltown. It exists, but in a host of smaller upstart companies that remain far closer to the original mission of the industry to create entertainment product for the consumer rather than pander to Wall Street jocks or the corporate media moguls.
You have to start with firms that have, as their essence, creative content. That includes companies like Klasky-Csupo, whose “Rugrats” TV series begot a hit movie and is now emerging as a kind of mini-studio. Like most of the emerging new studios, Klasky-Csupo was founded by creative people and remains focused, first and foremost, on making product.
Although company founders, ex-couple Arlene Klasky and Gabor Csupo, are no longer much involved in writing or sketching out characters, their creative input remains central to the business. The company’s president, Terry Thoren, considers his main job to handle the sales, marketing and administration for the creative teams that develop the company’s product. “My goal,” Thoren explains, “is to provide a cocoon for the creative process.”
This approach characterizes many of these emerging mini-studios. John Kamen, who runs @ Radical Media with offices in Santa Monica and Manhattan, views his mission much like Thoren: providing a conducive environment for creative people to do their work. In some cases these workers are employees; in others, the workforce also includes large numbers of contract talent or people on retainers. But the effect is the same: to provide the kind of environment in which culture-based industries thrive.
Increasingly this will be one of the determining factors for entertainment-related companies. It is one reason why a new major studio like DreamWorks SKG has more than a passing chance. People want to work for people like Steven Spielberg, Jeffrey Katzenberg or David Geffen, who are creators in their own right. Whatever their limitations, they are not people who climbed the greasy pole armed with law degrees or MBAs; they made it on their own skills and judgment, just like the early moguls.
Arguably the best positioned of the new studios will be those with a technological edge. Effects firms like Digital Domain, Rhythm and Hues, Hammerhead Productions and Santa Monica Studios all have made moves into feature film production, following the examples of the Bay Area’s Pixar, Pacific Data Images and Industrial Light and Magic.
Part of the strategy is to leverage in-house special effects skills to gain cost savings of up to 50 percent on that part of the budget. In today’s cash-strapped Hollywood, that can make a big difference. But the bigger issue relates to entrepreneurial chutzpah.
One person who has plenty of that is David Rose, a heavy-set, bearded entrepreneur from Kansas City who runs upstart Santa Monica Studios on Olympic Boulevard. Rose knows who he wants to play in the 21st century. “Someone like Louis B. Mayer he was a guy who just made it happen, that’s my model,” Rose said with almost childlike candor. “He built a huge studio from nothing. No one said he could do it, and no one said that I could.”
Rose has the kind of passion for filmmaking that is often missing in the jaded studio suites. A frustrated actor, he became a successful entrepreneur running several businesses, including a halfway house and an Israeli import-export operation. Rose wound up with a multimillion-dollar fortune made first in construction and later in the Colorado oilfields. But he always had one goal: to make it big in Hollywood.
“By the late 1980s I had a strategy and a plan,” Rose reveals, amid the stark setting of his studio, which was once a toilet bowl factory. “I was thinking that computers were the future in filmmaking, so why wait for the future later? I wanted to build a full studio based on this technology and it helps to know where you’re headed.”
At first the company started as an effects house selling its services to a wide range of commercial television shows, including “Star Trek: Deep Space Nine.” But now Santa Monica Studios is beginning to produce its own movies. Like Rose’s other hero, fellow Kansas City native Walt Disney, he also wants to be a technology pioneer, using his own software to create a whole new kind of computerized animation.
The idea that today’s Disney would have essentially offloaded this huge new field to another company, Pixar, is inconceivable to him, as it would likely have been to Walt. Like Disney and Mayer, Rose wants to control not only the means of production but the production process itself. That’s what too much of the studio elite has lost sight of and needs to get back again.
Joel Kotkin is a senior fellow with the Pepperdine Institute for Public Policy and a research fellow at the Reason Public Policy Institute.
