The Hollywood Labor Model

I saw the title of Adam Davidson's piece “What Hollywood Can Teach Us About the Future of Work” and thought he was going to draw a specific conclusion, but instead he drew another.

I was there as a “technical adviser”: The movie involved some financial events that I’ve reported on, and the filmmakers wanted to ask me questions as they set up their scenes. But I spent much of the day asking questions of my own, trying to figure out something that mystified me as the day went on: Why was this process so smooth? The team had never worked together before, and the scenes they were shooting that day required many different complex tasks to happen in harmony: lighting, makeup, hair, costumes, sets, props, acting. And yet there was no transition time; everybody worked together seamlessly, instantly. The set designer told me about the shade of off-­white that he chose for the walls, how it supported the feel of the scene. The costume designer had agonized over precisely which sandals the lead actor should wear. They told me all this, but they didn’t need to tell one another. They just got to work, and somehow it all fit together.
This approach to business is sometimes called the “Hollywood model.” A project is identified; a team is assembled; it works together for precisely as long as is needed to complete the task; then the team disbands. This short-­term, project-­based business structure is an alternative to the corporate model, in which capital is spent up front to build a business, which then hires workers for long-­term, open-­ended jobs that can last for years, even a lifetime. It’s also distinct from the Uber-­style “gig economy,” which is designed to take care of extremely short-­term tasks, manageable by one person, typically in less than a day.
With the Hollywood model, ad hoc teams carry out projects that are large and complex, requiring many different people with complementary skills. The Hollywood model is now used to build bridges, design apps or start restaurants. Many cosmetics companies assemble a temporary team of aestheticians and technical experts to develop new products, then hand off the actual production to a factory, which does have long-­term employees. (The big studios, actually, work the same way: While the production of the movie is done by temps, marketing and distribution are typically handled by professionals with long-­term jobs.)
Our economy is in the midst of a grand shift toward the Hollywood model. More of us will see our working lives structured around short-­term, project-­based teams rather than long-­term, open­-ended jobs. There are many reasons this change is happening right now, but perhaps the best way to understand it is that we have reached the end of a hundred-­year fluke, an odd moment in economic history that was dominated by big businesses offering essentially identical products. Competition came largely by focusing on the cost side, through making production cheaper and more efficient; this process required businesses to invest tremendous amounts in physical capital — machines and factories — and then to populate those factories with workers who performed routine activities. Nonmanufacturing corporations followed a similar model: Think of all those office towers filled with clerical staff or accountants or lawyers. That system began to fray in the United States during the 1960s, first in manufacturing, with the economic rise of Germany and Japan. It was then ripped apart by Chinese competition during the 2000s. Enter the Hollywood model, which is far more adaptable. Each new team can be assembled based on the specific needs of that moment and with a limited financial commitment.

I agree we'll continue to see more projects handled by teams that come together and then disband. In tech this is already a trend within companies, teams of product managers, designers, and software engineers coming together for one project, then disbanding and scattering to other projects. Technology advances arrive faster than in the past for a variety of reasons including Moore's Law and the heavy overlap in the Venn diagram of where the tech giants compete. Everyone wants the biggest cut of the finite pool of user attention, and all those companies have a lot of similar resources in terms of software engineers, PM's, designers.

Small teams of specialists collaborating for finite periods tends to be the most efficient way to move quickly enough to keep pace with this unrelenting tempo, unless you're working on larger scale projects with longer timelines, like self-driving cars or a new form of mobile computer.

Movement of specialists between companies has heightened, too. California doesn't enforce non-competes, heavy equity compensation plans tend to see a huge dropoff in annual value after four or five years (with accelerated vesting after a year or two), and identifying people from other companies with the skills you need is easier than ever in the age of LinkedIn, and with lots of companies offering employee referral bonuses. HR departments learned long ago that the success rate and cost efficiency of recruiting through referrals to be superior to other methods.

But in the last paragraph quoted above, I think Davidson is off when he equates the Hollywood model with being an evolution away from what he terms the end of a hundred-year fluke, an era of “making production cheaper and more efficient” and an ear in which workers “performed routine activities.”

In fact, anyone who's ever worked on a movie production and been on a movie set knows that the efficiency Davidson observes in the first paragraph quoted above is precisely because Hollywood learned a series of processes to transform a complex creative endeavor into something akin to a factory line of repeatable tasks.

If you've ever stayed to watch the end credits of a Hollywood production (and if you've seen any Marvel movies in recent history, you probably have), you've probably been stunned by the sheer number of people involved. For several minutes, names scroll up the screen in fine print, and your mind boggles at the cost of employing so many people. Is it really necessary to have so many specialists?

In fact, it is only by employing so many people that Hollywood productions can keep their production costs to a minimum. It sounds like a paradox, but it makes perfect sense when you realize the distribution of costs on a production. One tiny fraction of people among that long list make up a disproportionately massive slice of the production costs, and those are the movie stars. These are the people playing Iron Man, or your gorgeous romantic lead who just can't meet Mr. Right because she's so wrapped up in her job, or the bodyguard of the President who has to save the day when terrorists break into the White House posing as cable TV repairmen (it is a crutch of Hollywood screenwriting that any repair person can show up unannounced and then get in by just by asking if the security guard if they really want to bother some bigwig who will be really upset at that minor intrusion into their schedule).

If you're lucky enough to have Robert Downey Jr. or Jennifer Lawrence or some such movie star in your production, they make many multiples of what your $35/hr union gaffer makes. Also, that movie star is likely committed to their next movie already, so you have them for a finite number of shooting days, too. In almost every way, they are the financial and logistical long pole of your production, so you have to make the most of their time, whatever it takes. You've mapped out what pages of the script will be shot on which days in which locations, and the actors are told in advance which days they'll be needed where.

Actors are sensitive instruments, too, so when they're in the moment, ready to pull off a delicate scene, when they stroll over from their trailer on to set, you had best have everything ready to go. Remember that recording of Christian Bale chewing out someone on set for moving a light while he was performing a scene? I'm not saying that wasn't excessive, but I've also been on enough sets to understand where he was coming from. It's like a CEO chewing out someone for doing email on their laptop during a crucial meeting.

It turns out the most fast and efficient way to maximize the number of shots you can complete is to break the massive and complex effort of dressing and lighting a set into a huge number of discrete, specialized tasks. You have one person whose entire job is to rig up one light. One person whose sole job is to track script continuity. One person who takes photos of each shot to make sure props are returned to the same spot before each take. One person whose sole job it is to drive Scarlett Johansson over to the shot from her trailer in a golf cart.

Could you do it with fewer people? Could one person set up multiple lights and dress the set and hold the boom mic? Yes, but that's what you call a student or independent film. That style of shooting takes longer to set up each shot, and while you're in the midst of prepping for the next shot, your star is sitting around in the trailer playing on their iPhone, running up your production budget way more than if you just hired a few more arms/legs to get the set ready more efficiently. When movie stars take a much lower wage to work on an indie film, it's not just so they can expand their acting chops, it's also out of financial necessity.

It's the tech equivalent of doing a keynote involving someone like a Tim Cook, Mark Zuckerberg, Jeff Bezos, or Larry Page. Their time is the most precious and expensive resource in the room. Could a handful of people handle all the logistics of reserving and dressing the facility, setting up the A/V, producing all the marketing collateral, sending out invites, etc.? Sure, but it's not an efficient use of resources for that small team to be the long pole when it's Tim Cook's time that is most precious. Anyone who's ever presented to the CEO intuitively understands whose time is most precious in the room, who to make the most eye contact with.

In fact, if tech was to learn anything from the Hollywood model, it should be that maximum efficiency is achieved when there are very few to zero overlapping responsibilities among members of a team. The vogue in tech now is that designers aren't just designers, engineers aren't just engineers, product managers aren't just project managers. Everyone on the team is talented across disciplines, everyone's opinion should be heard.

If you hire talented people, it's very often the case that they're smart on multiple vectors, but a team consisting of people who all overlap across a wide surface area of decision making is a team with high coordination costs and more frequent disagreements. It may produce better results, but it may take longer.

On a film set, even the number of communication channels is restricted so that the number of potential interface possibilities doesn't rise exponentially with the number of people on set. The only person who can speak to the actors is the director and maybe the assistant director. The director doesn't speak to a grip, he speaks to the cinematographer who speaks to the gaffer who may speak to the best boy who then tells the grip how to adjust a light.

When Adam Davidson marveled at how so many people on set could work so quietly and efficiently, as if one coordinated team, it's because decades of producing hundreds of movies per year forced Hollywood to create a very battle-tested process for most efficiently cranking out the high production value films we see on the silver screen.

This is one of those cases where a metaphor can be stretched too far, as intellectually tidy as it may be. Unlike software production, movie production is one area when throwing more people at a problem, as long as they're the right specialists with very discrete responsibilities, can lead to greater productivity at higher efficiency.

Why, then, are there so many lousy movies? The same reason there are so many lousy apps or websites. Once you know what you want to do, production can be reasonably efficient. However, the creative piece of figuring out what to do has not yet been reduced to some reproducible process. Creative work remains, for the most part, a high failure rate endeavor.

Not that people haven't tried. One recent book on the subject was Creativity, Inc., whose very title promises to unlock the secrets of Pixar's strong track record of success in an industry not known for its high batting average. Lots has been written about the book, and about Pixar, a company shrouded in an almost mystical (and mythical) aura, not just in Hollywood but in the business world at large. I have almost finished the book, and it has much of interest on the topic of managing creative people, how to get them to collaborate best.

One thing which really benefits Pixar and hasn't received enough attention, however, is how it increases the feedback frequency and volume from the marketplaces both internal and external. One of the problems of filmmaking in general is that the final product, the completed movie, isn't finished until long after the actual filming on set. Making a movie is such a long process that it is broken into three stages: pre-production (all the stuff before the actual shooting of the movie, like financing, writing or purchasing a script, signing movie stars and the  director, etc.), production (actually filming the actors, with all that encompasses), and post-production (editing, sound editing and mixing, color correction, etc.)

The problem with this process is that by the time the actual final cut is ready to watch by an audience, the feedback is so late that only minimal corrections can be made if the movie isn't working. Your actors and have moved on to other projects and probably unavailable for reshoots, which just add to costs. Reshoots are very rare in Hollywood, and when you hear about a movie going into a reshoot it's often a harbinger of doom, like a tech company raising a down round. It can feel like good money chasing after bad.

Pixar has several advantages on this front. One is that it works in animation, so costly actors are less of a financial and scheduling crutch. An animator costs less than an actor, so if a performance isn't working, it isn't as costly to fix. And even if Tom Hanks wants a fortune to do the voice of Woody in Toy Story, it's not as dire a situation to swap a voice out as it is to change your lead actor (though I can't imagine Woody sounding any other way).

Second, in animation you can fairly quickly produce rough cuts of a script, with voices and sound and a watchable edit. So you can test scenes much earlier and much more cheaply than you can with, say, a live action scene between Ryan Gosling and Scarlett Johansson. As with prototyping in tech, suddenly you can push market feedback earlier in the production process rather than pushing it all the way to the end, when it's often too late.

Additionally, Pixar has put in an internal quality control group called the Braintrust, consisting of its top creatives and storytellers like John Lasseter, Andrew Stanton, Brad Bird, and Pete Docter. The Braintrust provides regular feedback to Pixar filmmaking teams, and their status as a group external to the project provides the objectivity that the teams themselves may lack because of their personal involvement and investment. This is an advantage to Pixar's existence as a firm, in contrast to most Hollywood movies which are made by teams assembled on the fly. A live action film typically can't get access to a creative Braintrust because a studio like Warner Bros is largely just a financing vehicle, it hires directors and actors to shoot movies one project at a time. The people at a studio like Warner Bros who can provide feedback are mostly suits, not storytellers, so their feedback is seen as useless and intrusive.

Pixar takes quality control so seriously that they've shelved several high profile projects after having gone into production, and they've rebooted others like Toy Story 2 with new teams. That is not cheap, but it's cheaper than just plowing forward, sinking more money into a project that isn't working, and releasing it.

The last factor enabling Pixar to incorporate so much quality control in its production process is that its hits have paid out enough to support the ongoing business of the firm. Even with its stellar record, however, it hasn't been all smooth sailing. When you only put out one movie a year (about Pixar's pace in its history), it had damn well better be a hit or the firm will feel the impact. This is a high cost, high investment process in every way, like tech firms putting out their new flagship cell phone once a year. 1

Pixar movies take many years to produce, much longer than live action films, and their budgets are in the hundreds of millions of dollars, even without really expensive movie stars on the budget. One middling box office success like Brave can lead to layoffs and office closures. The whole endeavor is more precarious than many would believe given Pixar's track record, but such is life when you invest so much in so few products.

Because of its status as an actual firm with some continuity in leadership (of course many of its employees work project to project) and its focus on animation, Pixar's magic is not easily replicable by traditional movie studios, especially those who work largely in live action. It's analogous to companies that try to emulate Apple; it's a dangerous game in which it's very easy to choose to copy the wrong things, or not enough of the right things, to less than stellar results.

Ronald Coase would have much to say on the topic.

  1. Samsung had a window, before Apple put out its iPhone 6 and 6 Plus, to get two new high end handset to market, the S5 and later the Galaxy Note 4. The two phones failed to capitalize on that brief window to steal high end marketshare, and instead the iPhone 6 and 6 Plus turned the tables and stole a bunch of market share from Samsung they debuted in late 2014. It was always unlikely for Samsung to leapfrong successfully given Apple's prowess in high end handsets, but you don't get many such windows. Accelerated evolution is exciting but unforgiving.