Can Movies Be Financed Like Tech Startups?
from the venture-capital dept
The technology industry is different. If a talented employee at Microsoft or Yahoo doesn't feel he's getting compensated fairly, he doesn't go on strike. Instead, he proves his point by starting his own company. Employees at small Silicon Valley firms are often given significant equity in lieu of other compensation. The ones who get in early at a really successful startup get filthy rich. As a result, they're part owners of the companies they're working for and they act like it. There's much less friction between management and labor in Silicon Valley because almost anyone who wants to can become part of management by starting a new company or joining a company already in the early startup phase. "Labor" and "management" aren't two separate categories, they're often the same people at different stages in their careers. Andreessen persuasively argues that a similar model can work for Hollywood. Two of the traditional functions of the studios, distribution and marketing, are rapidly being displaced by Internet-based distribution and viral marketing. The equipment required for producing high-quality video is falling quickly in price. The main thing that's still expensive is labor, and that can be had the same way it's obtained in Silicon Valley: by raising venture capital and paying talent partly with equity. A lot of talent will likely be willing to accept a smaller paycheck in exchange for a significant share of the profits from a successful film. And a lot of investors will jump at the chance to be business partners with talented (and maybe famous) actors, writers, and directors. It certainly sounds like a more productive model than the protracted strike we're facing now.