Is The Old Hollywood Studio System Making a Comeback?

How Subscription-Based Content Services Are Reviving The Creative Professional

By Gabe Weisert

During the Golden Age of Hollywood from the late 1920s to the early 1960s, the “Big Five” motion picture studios hired creative professionals under long-term contracts. Thousands of writers, set dressers and costume artists (not to mention lowly actors and directors) worked on dozens of feature films a year for fixed annual salaries.

The emphasis was certainly on quantity over quality, but every now and then an ordinary-seeming genre film did quite well: The Searchers, The Wizard of Oz, Casablanca. It’s important to note that these masterpieces were mass-produced along with hundreds of other westerns, musicals and mysteries.

Of course this all happened when box office revenues were much more stable than they are today. For most Americans going to the movies was a dependably recurring activity which happened on a weekly or even daily basis. The studios ran a relatively predictable business and their preference for fixed contracts reflected that.

The music business used to be structured in a similar way. Up until the late 1980s, most major labels had dedicated artist development departments, responsible for managing the careers of recording artists in the hopes that one day a breakout hit would offset an acceptable series of losses & revive interest in a back catalog (Bruce Springsteen’s first three records were flops).

Today these sorts of professional relationships seem very distant. The end of steady contract work for creative professionals can be attributed to a number of factors: successive waves of corporate consolidation, the rise of the agency system, Internet piracy, the spectacular diffusion of media and culture in general. While it’s no question that artists were exploited in the old system, these days they’re lucky if they get a single chance to fail, much less three or four opportunities a year.

But echoes of the old studio system are starting to appear in an industry in the midst of its own drastic realignment — book publishing. Neal Pollack recently wrote an enlightening Slate article about his experiences as an Amazon-published author:

“Their formula for literary success is, as far as I can deduce: Write as many books as you can, and then sell them cheaply and in bulk. But that doesn’t mean making a shoddy product. The editing at Amazon Publishing — and I’ve worked with several different editors — has been as good as any I’ve ever received, as has the copy-editing and design. They’re willing to work at my pace, and always tell me that I can slow down my pace if I need to. I haven’t gotten rich, but I haven’t dropped into poverty, either. Even though none of my books has sold more than 15,000-ish copies, Amazon continues to pay me to write them. The idea is that eventually one of my efforts will hit, and then the backlist will rise.”

This sounds suspiciously like a mutually rewarding creative professional relationship from seventy years ago. How is Amazon able to pull it off? Along with a host of new content delivery companies, they benefit enormously from minimal distribution costs, unmatched consumer behavioral insight and a stable recurring revenue model with Prime.

Amazon can’t manufacture a sure-fire hit (though it could have a hit on its hands with “Transparent,” and its “Crouching Tiger” sequel), but its vast trove of customer behavior analysis allows it to make smart bets by matching topics with creatives and audiences, in much the same way the old Hollywood studios did. The Netflix success “House of Cards” was a similar exercise in creative triangulation. Popular culture, after all, is still very much a genre-based business built around dedicated fans.

On the revenue side, while people aren’t reliably going to the movies every week, more and more consumers are opting towards subscription-based content services in music (Rdio, Spotify), video (Netflix, Crunchyroll, Twitch) and reading (Kindle Unlimited, Oyster, Scribd). The steady and predictable income generated by subscriptions lets these companies make considered investments towards their future (whether sourcing great backlist content or developing original material) rather than scrambling to hit their numbers every ninety days amid an unpredictable advertising market.

And finally, since digital distribution has completely untethered these new content companies from the scheduling constraints of the physical supply chain (warehouses, truck delivery, display cases, etc.), they have much more flexibility in terms of asking content creators to iterate and experiment. Pollack, a very wry and funny author, mentions at the end of his piece that based on the suggestion of his editors he’s writing his own version of a romance novel.

Could these new revenue platforms enable more people to self-publish on their own? Alexandra Alter, who covers book publishing for the New York Times, says that “It’s an intriguing idea and I suspect if anyone could pull it off, it would be a graphic novelist or comic book writer producing installments, or a genre writer with a devoted following that would check in regularly for a new chapter of a serialized story.”

And just like in the old days, patience remains a virtue. Content subscribers usually don’t start generating profit revenue until after a couple of years, so artist development and audience retention is key. “Most of our revenue lies in retention,” says Trip Adler, CEO of Scribd, “And so our competitive advantage comes in building a differentiated experience for reading discovery through algorithms, original editorial and social sharing.”

Are we entering a new golden era of professional content relationships? As Samuel Goldwyn once said, “Give me a couple of years, and I’ll make that actress an overnight success.”

Gabe Weisert works for Zuora.