Media Theory

Two Businesses: the case for data

I’m a huge fan of Rob Long’s podcast Martini Shot. But I couldn’t disagree more with his most recent one: Two Businesses.

On it Long argues, humorously and rather unconvincingly, that Amazon should sell its studio to CBS because running a successful online retailer and grocery store (Whole Foods), is nothing like running a television and movie studio, because:

“a successful grocery store chain and a successful online retailer need to be masters in margin shaving and supply chain management and on time delivery and customer service, none of which have anything to do with producing successful movie and tv shows.”

As if television and film are businesses that have money to burn these days. I understand what Long is getting at: content is volatile. But I think he’s missing what innovators like Amazon and Netflix are going to bring to the business.

Even if Amazon or Netflix are no better at creating breakout shows than the traditional studios, they are willing to consider that the production process itself is ripe for improvement. And if these new media companies are able to improve their productions by even a small amount, those successes will compound over time. Much like in poker, the measure of skill is in the long game. You can’t judge a player’s skill by one hand, you need to consider how a poker player plays a thousand hands; the same goes for the production companies and studios.

There has been a lot of talk about the crazy expensive deals Netflix has made with television producers Shonda Rhimes and Ryan Murphy may seem like business as usual. But with no inside information myself, I’d guess that it’s the data they’re after too. After all, data is the most valuable resource in the world nowadays.

I’m sure that Netflix believes that Rhimes and Murphy are going create hit shows for their subscribers, otherwise Netflix wouldn’t have paid such a premium. But Netflix also knows that Rhimes and Murphy are going to establish experienced producing teams that will generate a ton of production data for Netflix to study. Data that will completely accessible now that these shows are being produced in house. Data that will allow Netflix to learn how to apply efficiencies and create hit shows from the ground up at cost.

(I imagine that David Letterman’s team is going to get some interesting questions from the Senior Data Scientist – Studio Production in the near future.)

George Pelecanos’s short story, coincidentally called, The Martini Shot illustrates a common situation ripe for innovation that Netflix is probably already pursuing. The main character, a successful television producer, describes a location shoot where the Director of Photography is ordering another needlessly complicated shot that will never be used in the edit, but pushed the crew into overtime anyway:

“But we knew Lomax’s MO. He leaned toward artsy, with shots that made no sense in terms of POV, angles and footage we’d never use when it came time to cut. The secretary’s arrival, easily accomplished by a walk into frame, would be complicated by his insistence on bringing her in with a dolly shot, which meant laying down track and more lighting, which meant time. We’d get behind, and the rest of the day we’d be playing catch-up, and consequently the last scene or two would suffer. We’d worked with Lomax before. He made the days longer than they had to be, but he was all right.”

Not only is this wasteful, but needless overtime is also dangerous.

If producers were able to correlate production payroll with their editing timelines an entirely new dimension of decision making would become possible. Producers would be able to look at shows at a cost per shot, per scene, and per sequence basis. Conversations about how to make shows would change significantly. And if producers are not going to see the value in improved efficiency and accountability, then bond and insurance companies will. Amazon, the master of logistics, is the right company to use data to drive down costs, which over enough productions improves the likelihood of profitability.

This shift will require thinking about the process production process differently. Much like how Elon Musk’s Gigafactory announcement reframed how we should be thinking about factories:

“The biggest epiphany I’ve had this year is that what really matters is the machine that builds the machine – the factory.”

Margin shaving, supply chain management, on time delivery: all of these things will be executed very differently in television and film production. But their core goals: reducing waste and improving efficiency are much needed in every business. I wouldn’t bet against innovators like Amazon Studios.