I spent a week in Los Angeles in mid April and, even having spent time there in past lives (I was head of technology for Paramount Digital Entertainment for a couple of years.. a division of Paramount Television), it still strikes me as just, well, weird.
Clearly the entertainment capital of the world see's the web as a new distribution mechanism for it's content. It's also just as clear that they really don't know quite what to do with it.
It's an old story, really. How do we maintain control of our current money machine and gain control of the thing that (could) replace us? Or, at the very least, siphon off a significant portion of our revenue and a large portion of our most favored demographic?
I had my memories of Hollywood refreshed for me by a fellow I met (we’ll call him ‘Lenny’) who was represented as a high powered Hollywood agent type. There are million guys like this in Hollywood. They claim to be people that ‘know people’ and can get you the ‘deal’ you need to be ‘really big’.
What’s interesting about this is the stereotype of a Hollywood agent. The fast talking, high energy schmoozer that leaves you feeling, just a little bit, like you need a shower after spending time with them. This guy could have played the part in a movie. I liked him, but I felt, somehow, guilty about it after the fact.
He pulls up in his Jag. He’s dressed in all black (including his black snakeskin shoes). He’s got a full head of blond hair, and looks about 45 (I’m informed he’s closer to 60, but hey.. this IS Hollyweird, and it’s amazing what a little Botox can do for you).
I get the two handed handshake (takes my hand in both of his) and a warm smile. We’re scheduled for ‘an hour or so’ to talk.
I get about 30 minutes of background from him. Very connected, knows everyone. I’ve also got an idea of his net worth and how much he makes within 10 minutes. This, apparently, is part of the ‘impress the pale white geek from the internet world’ spiel. I’ve also got an idea of what models and actresses he’s slept with or lived with by 20 minutes in. this is the ‘male bonding’ part, or so I assume.
Now that his contact, financial and sexual prowess credentials are firmly established (remember, this is my first in person meeting with the guy, although I’ve had one conference call conversation with him and some others) he asks what we’re about.
Interestingly, he gets it. Sort of. He doesn’t get the user generation content piece of what we’re doing with ClickCaster, the most important part, but he gets that this is audio and video distribution with built in subscription. “kind of like subscribing to cable eh?’ Yea.. that’s it. Sort of (well, not really, but why complicate it early on).
We then go on a tour of what we can do and I find out, he’s actually actually somewhat versed in the online world. Seems he started and ran streaming content businesses in the late 90’s, early 2000’s. He’d shut it down in 2003 due to high bandwidth costs and not enough business. “My timing was bad on that one, could sell it for $300 mil if I had it today”. Maybe. But he DOES get some of what’s happening out there.
We’ve now passed three hours. He says ‘we need to talk to Mr. Big at Large Well Known Television Network'…. I look at him somewhat askance (like: uh huh.. sure we do) and he picks up on my doubt and decides he’s going to prove it. “It’s Passover” (it was) “but I’ll get him”. He proceeds to pull out two cell phones. Both advanced MS CE handsets. “I keep all 7800 of my contacts in these phones” he tells me.
He then proceeds to call Mr. Big at Large Well Known Television Network, get’s voicemail, and leaves a message something along these lines:
“Hey Larry (not his real name), Is Me, Lenny. I’ve got a guy here with Clickercast… (I correct him) I mean, ClickCaster… and this is hot babe, hot. You’ve got to see this. Worth half a billion in business bubby (I kid you not.. he really said babe and bubby, several times).
So far, I’m not overly impressed. Mostly because I have Bill Gates and Steve Jobs phone numbers and I could call and leave a voice message if I wanted to as well. Do they know me? Sort of. I’ve met them. But I doubt they remember me at all (and some assistant would screen it out).
After calling and leaving messages with three different Mr Bigs, he stops and smiles. Then a weird thing happens.
His phone rings. And damned if it isn’t Mr. Big from that Really Big Television Network. Head of programming. For real (I happen to know who the guy is by reputation). He tells him the same thing he just left as a message on voicemail and says “I got the guy right here” and hands me the phone.
Well, ok then.
We talk for a few minutes, Mr. Big asks me some questions (safe generalized ones) but not very in-depth (he doesn’t really understand, but he’d like to) and I hand the phone back to Lenny. They do the babe/bubby thing for a couple more minutes and it’s done.
“He wants to meet in NY. Next couple of weeks”. Huh.. how about that.
I say we can do that. Then the Hollywood thing kicks in. Lenny says “here’s what I need… I need (names a five figure monthly figure) , and I want (names a double digit percentage) of all money’s you get from any deals for a year and I want (names a high single digit percentage) of your companies equity.
Well sh*t.
The chasm between high tech startup and Hollywood peeks over the edge of the cliff.
To him, this is a normal deal. It’s how he works.
The calls repeat 2 more times (yea.. the other Mr. Bigs called him back within an hour or so as well). Damn, this guy really is connected.
Our hour or so meeting is now running about 5 hours with no sign of ending. He’s in full on sales mode and pushing to get me to sign up with him, right now, right here. Go! He's trying to wear me down (and it's starting to work). I'm beginning to think it's time to end this particular meeting.
I defer. Not that I don’t want the deals (although there’s some minor trepidation about dealing with Hollywood and the big media world on my part, mostly due to my experience the last time around and my memory of feeling like I was getting in a shark tank every day at work). I tell him I need to talk with my team and advisors. He keeps pushing and, finally, realizes I’m not going to agree to his terms on the spot. So he backs off. A little.
We’re now entering 7 hours of this. Dinner time, another meeting with a producer and my host. We say our goodbyes to Lenny. Even my host, who knows and works with the guy, says he's sorry for the exceeding long day, high compensation he was looking for and the hard sell.
On the way to dinner, Lenny calls me on my cell phone and he’s sitting with a fellow who has a website focused on getting unsigned bands up on the internet. The guy is an entertainment lawyer by day, band promoter - sort of (via the web) by night. “You two should merge your companies” is the first thing he says. Yea.. ok.. we'll look at that (it sort of died on the vine).
I’ve gotta give him one thing- things happens around Lenny. Or, at least he knows how to get them started.
Unfortunately, being the self funded Web 2.0 startup that we are, we just couldn’t afford him. And the percentage of equity he required was just too much for the team to buy into so we passed on working with him.
We tried negotiating with him on his terms, but I suspect he was thinking in 1999 dot.com bubble terms where startups had millions to spend without much direction on how to spend it. Not so in today’s world (and even more not so with us. We’re being extremely fiscally responsible and building what we can afford to as we go along).
He wouldn’t budge on terms, so, sadly, we had to let it go and part ways.
My gut tells me it’s a good thing though. Getting sucked into the whole ego/money/sex/speed scene of Hollywood is hard to ignore, and many DO get sucked in, but most get chewed up and spit out. It really is a big machine that’s organically configured itself to find opportunities, wring out every possible cent, then throw out the husk.
I don't know if we missed a bullet or a blessing. Time will tell, but I feel fine about the decisions we made. I'm also glad I went back to LA for a few days and steeped myself in that culture again to remind myself of why we're actually doing this startup.
It's largely about ending the kind of business Hollywood has fostered. Instead of a few large companies controlling the content you see on TV and other old media, spoon feeding you the lowest common denominator of content possible to reach the largest possible audience (and maximizing their revenue), we're about creating the next network. One that's largely powered by the people that use it.
That's, afterall, what Web 2.0 is all about. Us, the users, leveraging the collective wisdom of crowds and making it available to all of us.
