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You have to beat the man to be the man

charliecurran.com

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Re: You have to beat the man to be the man

#81

Post by jaredsohn »

dylangs1030 wrote: post #80
mikecane wrote: post #71

Earlier quoted context omitted.

>>>For example, TV shows have taken a large chunk of business away from the motion picture industry since TV was invented Major studios own TV networks today. It's all the same bank account. If your money doesn't go into the pocket labeled "Movie," you're putting it in the one called "TV."

That's fascinating...but I can't find a citation online. How did you come across this? Is e.g. ABC owned by Universal?

ABC is owned by Disney which owns Pixar, Disney, Touchstone, Miramax, Marvel Entertainment, LucasFilm, ...

A large chunk of TV is owned by {Newscorp, Disney, Time Warner, Comcast, Viacom, and CBS} http://www.freepress.net/ownership/chart

Here is who owns the major movie studios: http://en.wikipedia.org/wiki/Major_film_studio#1990s.E2.80.9.... Notice that with Sony the big exception, the list of companies is roughly the same.

Re: You have to beat the man to be the man

#82

Post by chalst »

charliecurran wrote: post #72

Hey everyone, I just got out of the editing bay and was really happy to see such a well thought out discussion playing out amongst the community. I wanted to take a moment to clarify my argument and respond to some of your comments in the hopes of furthering the conversation. The major criticism I noticed was that I somehow misunderstood Graham's argument or that it functioned in such a way that subsumed mine. As I u…

I found your essay a bit hard to follow, I think in part because it was a fusion of two (very interesting) essays, a historical primer on how Hollywood works and an argument about why Y Combinator can't incrementally fund entities that take away Hollywood's lunch.

I'm still confused as to what the latter argument is, in essence. Before reading what you wrote above, I would have said it was that you thought that you can only beat Hollywood by emulating GAHVI (the Golden-Age Hollywood Vertical Integration), and that this can't be done in the Y Combinator model, at least not through the kind of start-ups PG described in his essay. But the talk of narrative in the above suggests to me that is not really your argument at all.

Re: You have to beat the man to be the man

#83

Post by teeja »

Great, provocative thinkpiece.

I'd add that considering the number of expensive flops this summer, the audiences' responsiveness to the massive CGI-spectacles and remakes of recent years might be beginning to wane. To make film No Country for Old Men again might require not 'beating' the man but replacing spectacle with heartfelt passion. Pay more attention to why gay-rights are unstoppable.

Re: You have to beat the man to be the man

#84

Post by Alexx »

maxerickson wrote: post #78
Alexx wrote: post #77

Earlier quoted context omitted.

Revenue and Market Cap aren't comparable. I don't know where the figure of $65 billion is from, but Disney alone has a turnover of $45 billion, so I suspect it is an order of magnitude off the total hollywood economic value - which is worth vastly more than the box office total. To compare directly, Facebook received $2.5bn in funding, last year turned over $5bn and made loss of $0.5bn. Disney received no funding, tu…

What do you want to call Hollywood? Disney has revenues of $19 billion on TV and $13 billion on their parks, while they only make about $6 billion on movies. The movies have a profit of $722 million, TV $6.6 billion. I guess I wouldn't be terribly surprised if Disney were making more money from ESPN than from producing movies (I didn't look real hard if they break out their various cable property revenues and such).…

Yeah, that's what I meant by the total hollywood economic value. Google makes money from multiple services and products too, and in the context of new companies coming in and taking a slice of the pie it makes sense to look at hollywood as a whole. Content (TV, Movies, whatever) and Merchandise (Parks, toys etc) got hand in hand. You can buy angry birds plush toys because once any company establishes a brand they are going to find multiple avenues to exploit it, and any companies coming into the market will be in that position too.

Edit: And you're right Google is a 'better business' than making movies most likely. But that doesn't mean it's not of interest to VC. After all, oil is clearly a 'better business' than Google!

Re: You have to beat the man to be the man

#85

Post by maxerickson »

Alexx wrote: post #84
maxerickson wrote: post #78

Earlier quoted context omitted.

What do you want to call Hollywood? Disney has revenues of $19 billion on TV and $13 billion on their parks, while they only make about $6 billion on movies. The movies have a profit of $722 million, TV $6.6 billion. I guess I wouldn't be terribly surprised if Disney were making more money from ESPN than from producing movies (I didn't look real hard if they break out their various cable property revenues and such).…

Yeah, that's what I meant by the total hollywood economic value. Google makes money from multiple services and products too, and in the context of new companies coming in and taking a slice of the pie it makes sense to look at hollywood as a whole. Content (TV, Movies, whatever) and Merchandise (Parks, toys etc) got hand in hand. You can buy angry birds plush toys because once any company establishes a brand they are…

I disagree that oil is a better business than Google. Each dollar of gross profit for a company like Exxon requires a lot more operations than each dollar of gross profit for a company like Google (It's something like 50% more now, even after Google has captured a significant majority of online advertising and begun dithering around looking for more businesses to get into). Microsoft's licensing power gives it a nearly silly position in this comparison (but that has long since ceased to be a major growth industry, disappointing investors).

Energy certainly provides an opportunity to establish a huge operation and make huge profits, but it also requires a huge amount of capital.

Re: You have to beat the man to be the man

#86

Post by Alexx »

maxerickson wrote: post #85
Alexx wrote: post #84

Earlier quoted context omitted.

Yeah, that's what I meant by the total hollywood economic value. Google makes money from multiple services and products too, and in the context of new companies coming in and taking a slice of the pie it makes sense to look at hollywood as a whole. Content (TV, Movies, whatever) and Merchandise (Parks, toys etc) got hand in hand. You can buy angry birds plush toys because once any company establishes a brand they are…

I disagree that oil is a better business than Google. Each dollar of gross profit for a company like Exxon requires a lot more operations than each dollar of gross profit for a company like Google (It's something like 50% more now, even after Google has captured a significant majority of online advertising and begun dithering around looking for more businesses to get into). Microsoft's licensing power gives it a near…

Tech has a higher profit margin, but is a smaller industry. So depends which metric you want to use to define better- Efficiency or total profit. Comparatively the largest pure tech (none hardware) company Google is valued at $290bn publicly, and the Financial Times estimates the largest pure oil company Saudi Aramco privately at $2000-$7000bn based on the size of it's reserves.

It's a fruitless argument either way. I simply meant the fact industries with larger figures exist, doesn't mean VCs just look at the random top-line numbers and ignore an industry because it's 'not big enough' when you're dealing with billions of dollars.

Re: You have to beat the man to be the man

#87

Post by moocowduckquack »

guard-of-terra wrote: post #41
KaiserPro wrote: post #37

Earlier quoted context omitted.

Ahh, but therein lies the rub. The movie-making business is fine, its the disties that are the problem. The problem is this, a good movie is subjective. Go to your local movie festival, 90% of the entries will be clichéd lumbering trite. 7% will be good by comparison, but you wouldn't recommend them to your friends, much less bet money on them. This leaves 3% that are quality. Of that 3% 20% might be profitable. Peop…

If there is a need for a gate keepers, why do they pass bad movies? And most movies on the screen are mediocre at best. And they also lose money.

Hollywood did pray and spray investing long before the VC market hit onto it. The studios assume that the vast majority of films will not make money and that it is really hard to know which ones will do so in advance of them being made. So instead of spending a lot of time trying to select successful films, the studios try and spread the risk by investing wide and accepting that some years they will lose money. In the years where they lose money, the press then report that hollywood is in danger, whereas most of the studios have already budgeted for the losses.

Re: You have to beat the man to be the man

#88

Post by guard-of-terra »

moocowduckquack wrote: post #87
guard-of-terra wrote: post #41

Earlier quoted context omitted.

If there is a need for a gate keepers, why do they pass bad movies? And most movies on the screen are mediocre at best. And they also lose money.

Hollywood did pray and spray investing long before the VC market hit onto it. The studios assume that the vast majority of films will not make money and that it is really hard to know which ones will do so in advance of them being made. So instead of spending a lot of time trying to select successful films, the studios try and spread the risk by investing wide and accepting that some years they will lose money. In th…

No they don't invest wide. You have a few "wide" films a year. What you have is a stream of movies which are ordinary, mediocre and unsuccessful. Why fund that?
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