1:39pm PT by Jonathan Handel
USC Law Program Captures Screenshot of a Tough Business
“Hitting a Home Run: From YouTube to Riches,” was the name of a morning panel at Saturday’s USC / Beverly Hills Bar annual Institute on Entertainment Law and Business – but a more accurate title might have been “Keep Hitting Singles and Doubles: Eventually It Adds Up to Real Money.”
That at least was the lesson learned when Internet singing sensation Sam Tsui confided that his most noteworthy performances on YouTube earn him nothing at all, because they’re covers. The site won’t let him monetize a cover of someone else’s material, so the only way to bridge directly from a capella to ka-ching is to get viewers to click through to iTunes and pony up cold hard cash for audio tracks.
That’s not an easy sell, said Tsui. And, he added, “you can’t become complacent as a content creator – you need to do new, exciting stuff.”
And you need to do it quickly. Fellow panelist producer Jonathan Stern shoots his webisodes at a frenetic pace, 12½ pp. per day. Cue the Lewis Carroll quote: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
A similar dynamic applies in the independent film arena, a later group of panelists made clear. If you thought agents just spent their time reading scripts and fielding job offers for clients, consider this, from UTA CEO Jeremy Zimmer: “A big part of our job is finding equity sources” – i.e., investors willing to roll the dice on risky bets.
Finding such investors is never easy, least of all for a sector that seems to hurtle from one crisis to another. One of the panelists alluded to the Asian financial crisis a decade and a half ago, but that bit of ancient history seemed almost quaint in comparison to the dislocations of the global crisis that began in 2008 and which still casts a shadow.
Meanwhile, JP Morgan Chase banker David Shaheen III spoke of the “shockwaves” that resulted from the decline of DVD revenues over the last several years, and foreign sales agent Lisa Wilson rued the complexity of digital rights issues – “it’s a changing marketplace,” she said, “and the pieces haven’t caught up with each other yet.”
Even when the indy news is good, it isn’t: Wilson said she saw more films on offer at the Cannes Film Market in May than she’d seen in a decade. That bountiful crop translates to an oversupply of product, a point Zimmer emphasized when he noted that there are only three key buyers of arthouse product remaining, Focus, Fox Searchlight and The Weinstein Company.
Panelists spoke ominously of films getting made “that shouldn’t have gotten made,” but Shaheen nonetheless pronounced himself “bullish,” perhaps in part because budgets have come down. That’s due in part to high-priced talent accepting prices that aren’t as high as they once were.
“The days of Bruce Willis getting $20 million every time he shows up are over,” said Zimmer.
And about those investors: Zimmer decried a media narrative that talks of the “billionaire who came to Hollywood and got hosed.” That’s not the way it happens, he said. Rather, the billionaires decide to make passionate – but risky – bets, and “these people are really hosing themselves.”
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