Monday, 4 January 2010

Hollywood Babble On & On #424: Business Blatherings

Welcome to the show folks...


There's a report going around that some unidentified person or business is in talks with the floundering Weinstein Company to set up a fund for TWC to acquire independent films for distribution.

Which makes me ask a question for this as yet unidentified investor.


True there was a time when the Brothers Weinstein were considered the masters of independent film acquisition. But now folks are questioning if that truly was mastery, or if it was just a combination of dumb luck and good timing, because they certainly don't have that reputation now.

Their current reputation, one they've had way back in the days of Miramax, is to buy independent films, and either chop the living shit out of them until they were unrecognizable to the people who made the film, or to just shelve them, sometimes for years, before unceremoniously dumping them in the DVD discount bin, because they somehow didn't fit in with Harvey Weinstein's personal fits of whimsy.

The reputation of buying films and hustling them hard into profitability and awards is as long dead and dust covered as most of TWC's past independent film acquisitions.

Which raises another question.

How many independent producers are still willing to sell their films to TWC?

I know that indie film distribution is hurtin' for certain, but a simple look at the Weinstein scorecard shows that going into business with them carries the potential to seriously damage your movie, your money, and possibly even your health from extreme stress. And there are just too many stories of filmmakers going through this intense hell, and still end up with their film collecting dust on a shelf. To show anyone that it's worth going into business with TWC, you have to show some sort of evidence that Harvey Weinstein's undergone the sort of radical personality change that recently transformed Tim Robbins into a closet Republican.

I'm beginning to suspect that Harvey's true talent isn't hustling movies anymore, it's convincing investors that they can still trust him to
not run a company into the ground, despite all the evidence.


A trio of agents (Bill Weinstein, Bryan Besser and Adam Levine) have left mega-agency WME to form Verve, their own agency.

Personally, I think it's good to see a new business open up shop, because competition, not conglomeration, is what keeps the agency industry healthy, and that same competition is pretty darn good for clients too.

I wish the Verve trio good luck.


First Fox and Time-Warner Cable fought it out, now it's Cablevision and the Scripps Network going at it like two chihuahuas over a steak, resulting in Scripps yanking the popular Food Network and Home & Garden TV off of Cablevision.

I know that I wrote, somewhat glibly about the Time-Warner Cable/Fox Broadcasting feud, but this situation illustrates something that I think not only afflicts the entertainment business, but other industries as well.

This is when I put on my Strother Martin hat, and matching cosh and declare that what we have here is
a failure to negotiate.

Both sides are infected with the false notion that life is a zero-sum game, and that for someone to win, someone else must lose. This creates a destructive pattern where people forget that in a true free market system, there is always a way for all sides to win, and that is through NEGOTIATION.

So what do they have to do to negotiate successfully?

First, identify the parties who have a stake in the negotiation. In this case it is:

1. CABLE CARRIERS- These are the guys who rent the use of their cables that carry a variety of channels to homeowners.

2. CHANNEL PRODUCERS- These guys own and operate the channels that carry the programming that make renting the cable worthwhile.

3. CABLE CUSTOMERS- These are the people who rent the cables that carry the programs that run on the channels that come over the cables.

Then you identify what each party in the negotiation wants.

1. CABLE CARRIERS- To make money renting out cables that carry a variety of programming.

2. CHANNEL PRODUCERS- To make money putting programming to run on the cables.

3. CABLE CUSTOMERS- To watch the shows they like at a reasonable price.

Now this where things get tricky, because only two of the three parties involved are directly active in the negotiations. This can lead to two potentially harmful traps:

A. The Cable Co. and the Channel Co. make the negotiation into a contest to see who could screw the other out of something.


B. The Cable Co. and the Channel Co. stop screwing each other, and start screwing the customers.

Both traps are caused by the two sides forgetting the fundamental basis of every business, which is to make money by giving people what they want to pay for. When this basic fact is forgotten you get a business that repulses customers, raises prices beyond what market forces call for, and rationalizes piracy.

Right now Cablevision is looking at losing a lot of customers over this feud, meanwhile Scripps is losing the revenue those very same customers could have been making them during the time it takes for them to switch their cable providers. Hell, if I was one of Cablevision's competitors, I'd be on their customers like stink on shit, and it serves them right for making this fundamental mistake.

To prevent these fiascoes I offer this 4 point plan:

1. The companies remember their reason for existence: To profit from pleasing customers by giving them a good or service they want to pay for.

2. The companies remember that they have a symbiotic relationship, where they can both mutually profit with a viable business model that operates without deception or coercion.

3. Formulate a co-operative instead of adversarial plan to maximize their profits by maximizing consumer satisfaction. This is by calculating the best service they can provide while making a profit with a price that the market will bear.

4. Put plan into action.

You'd be surprised how simple business can be when there's a little common sense put in the mix.

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