Why Does Some Creative Culture Spread?

Why does some creative culture spread, while other creative culture arrives dead?

Why, for example, are people prowling the streets of Bristol, England, right now hoping to discover Banksy’s next work, while few notice when new street art appears in nearby Chippenham? Why is the worldwide movie-going audience buying advance tickets for Andrew Garfield in Spider-Man 2, and running away from Johnny Depp in Transcendence?

What makes culture move beyond the small embrace of its creator to become part of the bigger social fabric? Recently, I’ve been exploring these questions, seeking Laws of Culture that obtain independent of money. Because with a gigantic marketing budget, you can always buy awareness. But no matter how much advertising you buy, you cannot purchase desire.

When we look into the Laws of Culture, we’re really investigating desire: what causes us to experience it and want to share it.


Morning air brushes your face. As your legs cycle in rhythm, you wonder why no one else is on the street. Do you have the wrong day? The wrong time? Then, rounding a corner, you see another bicyclist and another. Soon there are five of you, now twenty, and you fold into the energy of the cycling pack, the group awareness, the power of your wheels on the pavement that starts to make cars move aside.

You anticipate, sensing excitement two blocks away, but nothing can prepare you for the emotional flush as you make the next turn to discover 10,000 more cyclists, of all ages and descriptions, at the starting point of today’s CicLAvia.

This is the experience many LA residents feel on occasional Sunday mornings in the city.

CicLAvia is a day when cars are banned from city streets, and bicycles and pedestrians take over. It’s an opportunity of urban idealism. Begun in Bogotá, Columbia, in 1976, where it is called Ciclovía and the central city closes to automobile traffic every Sunday, it has inspired similar events in more than ten countries and dozens of US cities.

No American city has adopted it more than LA. You would never have expected CicLAvia to grasp a firm hold here, but it has the city in its thrall. LA’s CicLAvia is so successful that one recent day saw 150,000 people bicycling from LA’s downtown to Venice Beach, and CicLAvia’s organizers have just launched a crowdfunding campaign to make it a monthly event. (Support them! I have!)

What would make Angelenos ditch their cars for a day? Let’s call it one of the Laws of Culture: The Law of Discovery. When we discover a way to do something we secretly hope to do, we’ll do it. LA’s car-love is mythologized in the sense that it is overstated. Most Angelenos feel ambivalent about their cars. We view then as utilitarian requirements in a spread-out city without sufficient public transportation.

When a work of creative culture, like CicLAvia, gives people the feeling that they are discovering something new—instead of making them feel force-fed—it creates desire. It is more likely to be shared and to gain momentum. CicLAvia creates the feeling of discovery because its organizers constantly change its route, and because participants approach it alone on bicycles, then suddenly, in turning one corner, discover they are part of a vast collective enterprise.

This is one way that creative culture moves and spreads—through the emotions of anticipation and discovery. It’s the Law of Discovery, and CicLAvia illustrates it on city streets for all to see.

Your Life Purpose, One Million Strong

My Review of Anne Thompson’s New BookThe $11 Billion Year

For us in the movie business, a day can seem like a year. We rise early and work late, ricocheting from crisis to calm to crisis as we scan information and keep creating back-up plans. What will we do if the star rejects the rewrite? If the numbers are bad in Japan? If next week’s opening tracks poorly? If our company’s share price is down in early trading? If we get fired tomorrow? If the shoot is three weeks over-schedule? If we just got out-bid on the spec script?

All the while we’re responding to 500 emails, texts and phone calls a day, clicking social media to stay on what’s trending, keeping one eye on disruptive technologies and the other eye on the clock because we have to be at Soho House by eight. We hit refresh onHollywood ReporterDeadline.comThe Wrap and Variety, to make sure we don’t get blindsided, and to ensure we never lose perspective, we reload Anne Thompson’s Indiewire blog, Thompson on Hollywood.

Thompson has been reporting on Hollywood for more than two decades, initially at theHollywood Reporter and now online. Her tenure in the movie business is about the same as mine and, full disclosure, we’ve known each other many of those years because Hollywood is a specific village.

11 Billion YearThompson has just written her first book, The $11 Billion Year, which takes us out of the moment-to-moment, and looks at the business through the time-slice of one year, 2012. And what a year it was, with brobdingnagian tentpole failures (John Carter, Battleship) and billion-dollar giants (The Avengers, The Dark Knight Rises), full of executive churn and industry-wide recalibration, of changing consumer behavior and game-changing moments, as when Netflix committed to House of Cards.

The $11 Billion Year begins with the paradox of death within life. Its title comes from the fact that 2012 brought $11 billion in box office, so the industry must be healthy, right? Not so, as Thompson, the ablest of tour guides, explains. The business is shifting mightily, and no one knows for certain who will survive into the next decade: who will adapt and who will die? Death haunts the story, too, with the sad, too-soon passing of Bingham Ray, fierce and generous fighter for independent film, who died of a stroke at the Sundance Film Festival in January.

It is at Sundance, in January, that Anne Thompson begins her year-long chronicle. Moving through the year, she shares the movie business’s steady calendar, against which disquiet plays. Sundance, South by Southwest, Cannes, Comic-Con, fall festivals, holiday movies and Oscar races–here is the cycle by which we insiders measure our lives. Among the many virtues of this book is Thompson’s ability open a window on our industry for people who buy tickets and love film, and simultaneously share insightful analysis for those of us who toil in its fields.

In reading The $11 Billion Year I found myself reliving 2012 through its movies and events, and you may do the same. Where were you when you saw Silver Linings Playbook? Zero Dark Thirty? Lincoln? Skyfall? The Hunger Games? You’ll come away with admiration for the courageous people who make exceptional films on the shifting business landscape, and an insider’s grasp of what we go through, day by day.

Get ‘The $11 Billion Year’ in hardcover or Kindle.


7 CES Takeaways for Indie Filmmakers

Vegas is less than 500 miles away from Park City, and as I got in my car, back in January, after a week at the Consumer Electronics Show, I knew I had a few things to share with indie filmmakers.

There is, after all, a connection, and it’s longer than Interstate-15. CES 2014 was all about gadgets and gizmos — the things with which we make and watch movies, TV and webisodes. It is an overwhelmingly gigantic trade show, where 155,000 people push and shove their way through 2 million square feet of floor space.

I have panic attacks just thinking about it. Yet even bigger than the crowds and the new, curved-screen TVs were the ideas I encountered, ideas that have immediate relevance for all filmmakers – be they mainstream studio creators, or those in the world of indie film.

1. Content is still king. What did the big tech companies talk about? The content they offer and enable. Jeffrey Katzenberg of DreamWorks Animation did a cameo appearance for Brian Krzanich, the CEO of Intel. Sony hosted Vince Gilligan of Breaking Bad. Cisco CEO John Chambers gave us Sarah Silverman. Yahoo’s Marissa Mayer brought onstage the Saturday Night Live Weekend Update team, John Legend and Katie Couric. Filmmakers—you make content, even though (thankfully) you call it “movies.” Without your movies, there would be no reason to buy a wall-size TV.

2. But it must WOW! Sony CEO Kazuo Hirai, the best corporate presenter of the bunch, spoke repeatedly about the Wow-factor—that if something doesn’t make you say “Wow!” it’s just not good enough. That’s true about movies too. Filmmakers, a lot of your movies simply are not good enough: They don’t make us say “Wow! That was great! I have to tell my friends right away!” As we at Entertainment Media Partners explored in our Sundance 2014 Infographic, the indie film world still has too much quantity and not enough quality.

Kazuo Hirari at CES 2014.

Kazuo Hirari at CES 2014.

3. Get closer to your customers. The big brands talked about developing unique, one-on-one relationships with their customers. Big data is allowing them to do it, and because they can have one-on-one relationships in the public forum of social media, it’s cost-effective—social media amplifies their individual messages.

Filmmakers, you can do that too. Zach Braff and his producing team modeled exceptional customer-relations in his hugely successful Kickstarter campaign for <em>Wish I Was Here,</em> premiering at Sundance on January 18. Crowdfunding is 40% about getting money, and 60% about developing a relationship with your audience.

4. Technology will offer unprecedented tools.  The newest generation of cameras will allow you to make creative changes after principal photography—you’ll be able to adjust focus, change the depth of field, and reframe with ease. 3D image-capture is becoming a consumer item. By the time Avatar 3 comes out, many of the visual effects of Avatar 1 will be at your disposal, and will be affordable on an indie budget.

5. Audiences are in for better experiences. Better visuals. Better effects. A whole generation has missed hearing uncompressed music, and the newest sound delivery systems will give full dynamic range: you will be able to share sounds as you want them heard, even on iTunes and mobile devices. Of course, just because the technology is here, it doesn’t mean you’re James Cameron or Rachel Portman. See # 2: You’ve gotta WOW!

6. Brands and creators are new best friends. Advertising agencies are not going away, nor are they lessening their role. But big brands want to have direct collaborations with creative talent, and agencies get it. That’s good news for filmmakers, and opens the door to sponsorships, promotions and more paid gigs.

7. You are the First Screen. There was a lot of talk about the “Second Screen” experience. Twitter CEO Dick Costello calls Twitter the “Second Screen for everyone watching TV.” But there’s no Second Screen without a First Screen—and filmmakers, that is what you do.

From the invention of the first motion picture camera, technology has made filmmaking possible, and each advance allows more creativity to flourish. Yet storytelling is far more important than technology—a fact tech companies embrace. The key to success in technology and filmmaking really is quality. In a field of over-supply, where audiences have too many choices, and where new tools allow much easier and cheaper production, you have to separate yourself from the herd. Excellence is the great differentiator.

Could CES and Sundance be two sides of the same coin? I think so. We saw these CES 2014 takeaways in action in Park City back in January, and will continue to in the coming months – throughout the entire filmmaking community.

Sundance InfoGraphic: Are Indies the 8th Studio?

With an annual production budget that exceeds $3 billion, independent movies rival the major studios’ spend on filmmaking, even as indies vastly outstrip the studios in sheer volume.

That’s a key finding of our exploration of Sundance by the numbers, which we’ve rendered in our 2014 Sundance Infographic below. There are seven major movie studios: Warner Bros., Disney, Universal, Sony/Columbia, Lionsgate, 20th Century Fox, and Paramount. Can we now reasonably call independent filmmakers the Eighth Studio, because their aggregate production expenses clearly put them in the major studio league?

I don’t believe anyone has ever attempted to quantify the amount of money spent on independent films before. To do this, we decided to use Sundance as a bellwether of the entire independent film sector; with more than 4,000 feature-length films submitted each year, Sundance certainly represents a healthy sample of the industry. While absolutely every indie movie isn’t submitted to Sundance, the highest-profile ones generally are. So the Sundance submission numbers represent a good statistical estimate of the most viable indie movies produced each year.

Then we needed to make an estimate of how much money had been spent on each film. After speaking to a dozen producers, sales agents and indie financiers, we settled on $750,000 per movie, as a blended average number. A few people urged us to estimate a higher number. Even though some movies are made for less, many are made for far, far more, which would put the average cost over $1 million. We decided to keep our estimate at $750,000 to stay on the conservative side.

We also estimate that more than 400,000 people work on indie movies each year, assuming that an average of 100 people work on each film, through all phases of production and post-production.

Opening Night Curse?

In other findings, we took a look at what many distributors call the “Sundance opening night curse”–their belief that if a movie is chosen for Sundance’s opening night, it won’t do well at the box office. Here we found mixed results, which means the “curse” is often true, but not always. Since 2010, 10 films have screened on opening night. Two of them, Twenty Feet From Stardom and Searching for Sugar Man were indie box office success stories; the rest were not.

We Also Discovered:

Distribution: 2011 was the pivot year; since that year, more than half the films screened at Sundance have achieved distribution deals. That’s because of the explosion of streaming and digital delivery systems. Of course, many of those deals are non-theatrical, and some are for acquisition prices as low as nothing (or nearly nothing–$25,000), which means that most independent financiers won’t recoup their investments.

Biggest sales: Since 2010, the movies that are sold for the most money usually have not been worth it. The winner of this game are Fox Searchlight and Focus Features, which bought well and had theatrical success with The Way Way Back and The Kids Are All Right.

The 8th Studio’s Balance Sheet

Still, the overall picture is far from pretty, and if we were to do a balance sheet for the Eighth Studio, the indie film industry, it would be bleeding more red than a Nicolas Winding Refn movie. In that way, the Sundance Infographic is also a cautionary tale. Fewer than 2% of the fully-finished, feature-length films submitted to the Festival will get any kind of distribution whatsoever. Of the more than $3 billion invested annually, less than 2% will ever be recouped.

Does that mean investors shouldn’t bankroll indie movies, and filmmakers should stop making them? Of course not. But I do wish financiers would invest more wisely, with seasoned guidance and a clear plan for distribution beforehand, and that filmmakers would concentrate on crafting far better movies. Creators and audiences alike would be better served with higher quality and lower quantity. The numbers make that abundantly clear.

Sundance Infographic 2014: The Festival by the Numbers

Sundance Infographic 2014: The Festival by the Numbers

Click on infographic to enlarge.

Sundance 2014 Infographic produced by Entertainment Media Partners and Cultural Weekly.

Sundance 2014 Infographic produced by Entertainment Media Partners and Cultural Weekly.

Update: Since this infographic was prepared, Sundance added 2 additional films; 121 films were screened this year.

Business Lessons for 2014: You Are a Media Company

“Don’t Become as Obsolete as the Sears Catalogue”

Of the business lessons you may apply in 2014, here’s the most important: You are media company.

What kind of company did you think you were? Practically everything we do today is media: social, personal, or commercial entertainment. We all walk around with mobile devices in our pockets, devices that are really mini-movie studios, capable of creating, editing and distributing content worldwide.

Of course you are a media company. This is true whether you employ 100,000 people or you work for yourself.

In case this surprises you, here is a history question.

Why didn’t railroad companies become the airline industry? After all, the railroads had the financial capacity, and knew about aircraft technology. They should have, could have, become airline companies, instead of being superseded by them.

What stopped the railroads from transforming? A failure of imagination, their own limited definition of what they did. In short, they believed they were in the railroad business. They should have said they were in the transportation business. This is one of the most common business lessons taught in business schools.

A similar challenge faces every business today, and every creative entrepreneur. If you define yourself within the limited framework of your discipline or industry, it is likely that you will become as obsolete as the Sears catalogue. But before you ask yourself “Why didn’t Sears become Amazon.com?” you should simply redefine your activities and embrace your media-company reality.

How do you become a media company?

Do what media companies do: Empower others to share their stories and information through you. Give your customers/audience/consumers the tools with which they share, articulate and improve their lives.

In other words, if you make trench coats, think like a TV channel, not like a clothing company. If you are a journalist, think like a publisher, not like a writer.

Existing media companies are, of course, well positioned to take advantage of the concept. But, ironically, they don’t always think like media companies, in the way I am defining them. Movie studios and television networks won’t endure for another decade if they don’t listen to their fans and embrace their creative partnership. Traditional publishing companies, with their slow turnaround-to-print process and myopic view of how audiences seek their content, are already witnessing a defection of high-profile authors.

In this decade, a media company needs to provide mechanisms by which all customers are audience members and also co-creators.

What should you do?

1. Get over your blocks, your feelings that you don’t have the time or ability or skills to do media, social media or video. It isn’t that hard.
2. Create content that people love and want to share
3. Focus on storytelling, because the best story always wins. If your company doesn’t have a narrative, it cannot be a viable company.

Likewise, when creative people tell their own stories, they give their work extra value. For example, have you ever walked into an art gallery and had the artist explain her work to you? The artist’s story always makes the work more interesting and valuable.

In her new book Blockbusters, Harvard Business School professor Anita Elberse recounts her interview with Angela Ahrendts, the CEO of Burberry, the company famous for its trench coats and outerwear.

Images from Burberry's Tumblr page

Images from Burberry’s Tumblr page

In the interview, Ahrendts surprisingly describes Burberry as a “digital-media company.”

Burberry has been so active in social media that it now has more followers than any other luxury brand. “And the company has launched several online destinations,” Elberse writes. “At artofthetrench.com, for instance, consumers can submit photos of themselves in its iconic rainwear. ‘Nothing is for sale; it is just a site to connect people,’ explained Ahrendts. At Burberry Acoustic, which falls under Burberry.com, people can find songs recorded exclusively by British artists who have been handpicked by Burberry’s chief creative officer.”

The strategy has worked. Burberry’s sales have tripled during Ahrendts’ tenure—which just ended when she got an offer she couldn’t refuse from another company. This month, she is moving to Apple, where she will lead strategy to grow sales Apple’s online and retail stores worldwide.

Whether you are a giant corporation or a sole proprietor working alone in a garret, your future as a media company is inevitable. If you haven’t embraced it already, now is the time. This simple mind-shift will transform what happens this year.

Top image from Audi’s YouTube channel. They’re a media company, not a car company.

Momentum Building

Success Isn’t Accidental

A movie has an extraordinary value proposition: If you give us 30 seconds of your attention, which is the average length of a television commercial, we will make such a compelling argument that in a couple of weeks you will give us two hours of your time and also some of your money.

This doesn’t just happen. Our techniques in the movie business create success that isn’t accidental, and can provide useful tools for your business, no matter what industry you are in.

We have one objective: to get as many people as possible into the cinema on opening day. It is a lot like launching any product, service or retail sale. Apple builds up enormous momentum in advance of releasing each new iPhone, to the extent that people line up for hours on the first day they can get it. New web apps create buzz and far in advance, in the hopes that at the moment of release many people will download them, moving the app into the “must have” category. In the retail market, stores create massive momentum leading up to Diwali and Public Holiday Sales, because they know if the store is crowded when it opens, sales for the day will be strong.

Films are the same.

For a movie, a full house creates critical mass and spreads word-of-mouth like wildfire, because movies play better when they are screened for large audiences. There’s something about being in a big group of people, all having the same experience in unison: it makes the experience stronger. And sells more tickets in the long run.

How do we do it?

The first thing we realize, on any film or enterprise, is that there is much we do not control. In the movie business, we cannot control the weather, the other movies opening on the same day, or what critics say. Therefore, we focus on what we can control. It takes advance planning.

A major motion picture starts planning three years ahead, which is when we set our opening date. (In fact, some movies now plan even farther ahead; Disney had announced a Star Wars movie for summer, 2019!) This is a first communication with our audience, and it gives them plenty of time to start getting ready for our big premiere.

Then, often before we start shooting, we start doing test marketing. We use research companies to find out who the most likely audience will be, and how they will feel about the concept of the movie and its stars. We use the information to craft the marketing campaign and to shape the finished movie. For example, if we find that audiences really like an actor who’s in a supporting role, we might emphasize that character. If we discover that women under 25 years will be more interested in the movie than men over 30 years, we’ll start to design messaging specifically for this target audience group.

Over the course of the next two years, we will keep up a steady drumbeat of messaging—teaser trailers and posters, social media and publicity, news “events” and paid commercials. As we get closer to our opening day, the tempo increases from, shall we say, a waltz to a double-time march. If we have done our jobs right, fans are lining up on opening day, and the cinema sells out.

Our success at building momentum depends, of course, on having a good movie to sell, and nothing takes the place of excellence. You can’t break trust with your audience by promising one thing and delivering another. When the combination works—a great movie coupled with a great, momentum-building campaign—the result is non-accidental box office success.

You can use this same approach in any business you are managing. Plan your launch far in advance, and begin market-testing right away. Listen to what the testing tells you—have “big ears” and keep your ego out of the way, because the audience will tell you who they are, how they like to be communicated with, and what they want. Then build a calendar of creative messaging that gets bigger, bolder and faster as you approach your launch day. You’ll have your momentum. Now all you have to do, and it is no small thing, is exceed what your audience is expecting.

The Power Paradox In Leadership

In leadership, just because you have the power, does not mean you should use it. And even when you don’t have the power, sometimes you must act as though you do

As a CEO, how should you exercise your power of leadership? Should you govern by consensus? Make people tremble in fear? Be tough but fair?

We confront the same questions every day in Hollywood when we’re working on movies, because each movie is its own start-up entrepreneurial venture—we craft the business plan (the script), hire a bunch of people, and then make the product (the movie). Along the way, those of us who finance films and run studios need to decide what kind of leaders we are and what kind of power we will wield.

This issue comes into play at every step in the process, and nowhere more so than at the end, when we have to decide how the movie will be finished. We call that “final cut.” The “final cut” is the final version of a film, the moment where we stop tinkering with it and say it’s done. It’s also a moment where emotions can run high, because most of the time the director does not have “final cut”—that power is reserved for the motion picture studio or financial investors. While I know this seems strange to people in many other parts of the world, the United States has no tradition of droit morale or “moral rights” given to creators of intellectual property. If someone else is paying the bills, everything, even a movie, is a “work for hire,” which means the filmmaker, in the last days of a movie, holds precious little power.

On one film I supervised, our studio found the ending unsatisfying. We had an instinct, borne of our experience, that if the ending were better—in fact, if the last two scenes were reversed—audiences would leave the movie much more up-beat, which would translate into better word-of-mouth and more ticket sales in the future. The director didn’t want to make the change. She liked the ending the way it was, but she agreed to a test, so one Sunday afternoon we went to a cinema and screened two versions of the movie in adjacent rooms for test audiences. The versions were the same except that two scenes at the end were in a different order. After the screening, a research company did an audience survey, and it turned out we were right: the version with our ending had a higher approval rating.

You’d think that would be the end of the story. We, the studio, had “final cut,” and the director didn’t. But, even with the audience results in hand, she didn’t want to budge. She made an artistic plea, stating that the film was simply a better film with her ending, and that we should support quality and artistic integrity.

That evening, we executives at the studio caucused among ourselves. We reached a surprising decision—we agreed to let her keep her ending. We had done our job, and showed her that a different, more commercial ending was possible. She had done her job, and fought back to preserve her vision. Why did we make the decision as we did? Because, at the end of the day, we recognised that our role was to be financiers, not movie-directors, and even though we had the power to change the movie, it would overstep our role and imperil our relationship with this director and other directors we may work with in the future.

The outcome of that film was an even further surprise, because its box office turned out to be double our expectations. The director had been right all along; the audience appreciated her mark of quality.

Then I worked on another film with the opposite result. This time, we had engaged an extremely powerful director, one of the few who commanded the power of “final cut” himself. When we screened the film for a test audience, it tested poorly. The fixes were obvious to all of us, including the director. But he knew the film’s star would not want to go along, and this director told us, in confidence, that the only way to get the changes made would be if we played a charade, so he could claim we were forcing him. Here, too, we played our role, and he played his. The film got changed and became a moderate success.

What’s the lesson of these two stories, and what does it tell you about the kind of leadership that you should practice? Think of it as the Power Paradox. Just because you have the power, does not mean you should use it. And even when you don’t have the power, sometimes you must act as though you do.