It feels like this reinforces this feeling I've had about money. Those who work with the money always seem to carve out a larger slice for themselves, often in increasingly clever ways. It's a one directional battle where those who don't work with the money are always on the defensive.
I'm thinking a lot about managers and sales at the engineering firms I've worked at in the past. They get to see the numbers coming in, the salaries of everyone, and have a lot more say over who gets paid what. They've got the data which is power. The talent who actually produce the product are in the dark.
In a previous career I worked on a support team at a company where support contracts brought in a ton of money. Support was part of what the company sold as a product as much as the product itself. It brought in a lot of money even during slow economic times.
However, over time the sales team gained more and more influence. Since their compensation for support contracts was seen as a given they wanted to really focus on sales.
Eventually they came up with the great idea to offer support for "free". A product with free support became fairly popular because of the price. Sales increased but support tools and staff did not because there was just no new support money. Worse yet workload skyrocketed because sales took off ... among price conscious customers who were pretty terrible users and demanded a great deal of support time.
It didn't help that the product itself was often sold as something it wasn't.
Eventually the layoffs in support started because "support just wasn't bringing in enough money to justify the head count".
The folks with visibility to the money did fine in the short term despite even undermining the company's long term income, everyone else not so much.
At that role in support I cultivated some good relationships with engineering and others. But even there I ran into some "the customer is doing it wrong" kind of feedback from engineering.
Nothing was better than getting everyone on a conference call with the customer (I prepped the engineering team so no surprises) and letting engineering talk to them in a situation that they're a bit less likely to use that line of reasoning.
Amazing how quickly things were done after that ;)
Yeah sometimes the folks on the ground know how it really works as opposed to those who don't see it day to day.
This is one of the reasons why I believe in rev-share employee co-ops. The power dynamics are greatly equalized: everyone gets to see the profit and everyone knows how much others are getting paid. Sure, there's uncomfortable and challenging situations to still work through, but the benefit of having more distributed worker ownership and transparency is a value worth pursuing.
I believe in the tooth fairy, but it doesn't mean she is real [1]. There is no conspiracy preventing employee owned co-ops from being started so why don't they dominate the business landscape if they are so much better? Or are they like lots of utopian ideas that don't work well in practice.
Education systems are designed to train people to be workers, not to be worker-owners of co-ops. There are a lot of skills required to start a co-operative company that people just don't tend to have. There is also a lack of financing options for worker co-operatives because financial institutions tend to view them as risky (even though they are I believe more successful on average than private corporations). Most co-ops are bootstrapped with funds raised by the members themselves.
So, in short, our economy is built around a dynamic where many people have very little and are therefore essentially forced to work for those who have a lot. The precarity of those who would benefit most from being part of a co-op is largely what prevents them from being in one. This precarity is a boon to the wealthy in society, who can benefit from having people compete in the labour market. Thus, no one with the means to change the circumstances -- such that co-ops are simpler to form -- would ever want to do so as it would hurt their position.
This is one untested hypothesis I guess. An alternative is that most people don't want the stress and risk of running a business and prefer to just sell their labour in the market. If only a small percentage of people want to be business owners and managers then we will end up with the business landscape we have.
Why not just grant financial instruments that incentivize everyone to increase its value (Stock or RSU's) and make compensation data public, revealing who gets paid what?
Maybe I'm being an idealistic hippie or whatever. I kinda feel that opaqueness around compensation is meant to keep employees under-compensated for as long as a company can afford to do so. Solution: compensate everyone well, and if you can't afford it, don't be in that business anymore.
Large sectors of the economy are too competitive and of such low productivity to compensate everyone well.
Ultimately you can only afford to pay someone what the marginal value of their labour provides. If you pay them more it has to come from some other person in the organisation or the company loses money.
Sounds like a lot of tech startups, where employees own the majority of the shares. It just happens that some employees (the founders) have a larger share than others.
There is a meaningful difference, though, in that a coop is intended to be a permanent, stable arrangement while in a startup the current stock arrangement is intended to be temporary, while seeking external investment and/or an exit event.
Co-opts are ripe throughout the agricultural sector, but they do have to fight hard to maintain those positions because short-sighted corporate competitors undercut the co-opts pricing with unsustainable practices. Often it is cheaper to pump farmland for all it is worth until the topsoil is depleted and thin, then just buy up different farmland from struggling small farmers who got undercut from the unsustainable practices. While the depleted farmland either gets sold off to developers or gets put into a wildlife program where they get paid rent by the government to leave it fallow.
So it is still a battle between people looking for short personal profits against those who are seeking long-term sustainable profits. There is no associated extra costs for depleting farmland or practicing unsustainable farming methods so assholes will continue to abuse it as long as they make money on it.
Unless these corporate competitors are stupid, then taking a short sighted approach means the returns from not exploiting the future are too low. The problem is not corporations, but the regulatory structure around farming where the true value of the future is not correctly valued. If these corporations made more money not exploiting the future than exploiting it then they would act in the long term interest.
I can't name any tech companies who do it, but I've seen in traditional businesses (the kind that don't lose VC money for years). They just aren't really the companies you're going to read about on here or cnbc.
Some tech companies kinda do it by paying employees in stock. The highest paid employee at Amazon only makes $150,000 cash, while the company creates shares of stock to fund the rest of their compensation. Those are actual shares that get taxes as income, not options.
Since Amazon doesn't participate in stock buy-backs, like most tech companies do, most of the salaries are actually funded by stock holders in the dilution of their shares.
Is that really the case? Let's say Amazon paid all salaries in cash. Also, for simplicity let's says employees view cash and stock compensation as perfect substitutes. Then the addition compensation has to be funded by Amazon - if it won't do so from cash from operations or debt, it has to come from raising equity: Which in effect is the same as paying employees in stock.
I believe REI has the same model as MEC (Mountain Equipment Co-op) in Canada. In order to buy from them, you must be a member, which costs like than $10 once, and profits are distributed between all members. Something like that.
"I'm thinking a lot about managers and sales at the engineering firms I've worked at in the past. They get to see the numbers coming in, the salaries of everyone, and have a lot more say over who gets paid what. They've got the data which is power. The talent who actually produce the product are in the dark."
I've long thought that it might be educational to work as a recruiter for a few months.
That way I'd get access to what is effectively an honest, accurate salary survey, not the highly suspect self-reported numbers you see on various websites.
As a recruiter, yes, this is exactly what we do. My speciality is salespeople, and if you show me a LinkedIn page I can tell you (within about a $5k range) how much someone is making.
There isn’t really any one thing it’s more a function of a number of things (market they sell to, deal size, quota, is it software only, is it new vs existing biz) and then asking about performance.
> Those who work with the money always seem to carve out a larger slice for themselves
Not trying to be cynical or snarky here at all but it's kind of an 'of course' moment I've had on this a long time ago.
If you're a software engineer or hacker you tend to have the best laptops, best home network, best smart phone setup, etc.
Look at how inept on tech your friends are compared to you.
They're smart at whatever they're doing. If they're a firefighter they're probably amazing but when it comes to tech they're incompetent or at least naive.
Same thing for money... if ALL you do is work with money you're going to be amazing at it....
This is why I want to work with money. Unfortunately, this is how the world is just setup.
> They've got the data which is power. The talent who actually produce the product are in the dark.
There's no reason you have to run your company this way. IN fact making salaries public within the company should very much improve things. If they are fair then what's there to hide, and if they are unfair, why is that so? And if they look unfair but aren't, then some explanation can't hurt.
Yes I have always run my companies this way. Even in a bootstrapped company people always knew how many months of cash we had on hand (sometimes scarily few!). And sometimes there were salary injustices and people pointed them out.
Typically when someone thought a salary was wrong they wouldn't complain publicly, but ask "why is the marketing VP getting so much?" And we could show salary surveys, what the VP does, etc.
This kind of attitude helps keep a company together. You know about the common attitude of engineers shitting on sales and marketing as morons or the marketing folks with contempt for the engineers who "have no imagination?" I've never had a company like that.
Honest people are rare. An honest person will do the right thing even when they think no one else is watching, and even when they believe they will never be caught.
That, of course, brings up the question of what the "right thing" is. In a society with no moral absolutes, what is the right thing? Who is to say that a greedy agent is not a good person, as compared to an honest agent?
Why aren't sales people paid hourly? Incentives are better aligned when you get a percentage of the contract value. Not completely aligned (the real estate agent is going to be optimizing for deal-flow, not absolute highest price), but more aligned than an hourly wage.
The point being missed is everyone contributes a percentage to the value of the house. I'm hard pressed to believe the real estate agent's contribution is 6% of that value.
Almost Noone else in the value creation work flow gets paid on percentage.
No one is forcing you to have one. Many people don’t use them. But more people do. And if you believe that the market is somewhat efficient, people are paying a fee (it’s a lot lower than 6%) because they feel it’s generally worth it.
Agents getting paid a percentage of what their clients get isn't the concern here, and is generally considered good in the sense that the more they get for you (their client) the more they take home.
The issue here is that the agents are taking a (fairly large) cut of the shows being produced as an alternative to getting paid by their clients. In the real estate analogy, it's as though your agent could decide to get paid a percentage of the buyer's income less expenses rather than a chunk of the sale price. In that scenario you would expect your agent to bring you lots of wealthy buyers who then produce low-ball offers, and so has it been in the writers guild experience.
> Agents getting paid a percentage of what their clients get isn't the concern here, and is generally considered good in the sense that the more they get for you (their client) the more they take home.
That's the theory, but then it turns out to be a lot more profitable to get commissions for selling five houses for $400K each than to spend the same amount of time to sell one house for $550K.
Cue statistics about real estate agents selling their own homes for substantially more than they get for their clients.
Sure; the point of paying them a percentage is to get their incentives to roughly align with yours. Short of giving them 100% you should expect that at some point that breaks down and they will figure the next optimization isn't worth it when it would be to you with your larger share.
But that's very different from this situation described here, where the agent serves a different and in fact diametrically opposed master.
I think the statistics were also that real-estate agents houses also stay on the market longer than other houses. Which also agrees with what you're saying. Essentially they can maybe make 6% of 20-50k more but it would require weeks more work on their part so it's not nearly as big a deal to the agent as it is to the owner.
Usually it’s 1% to 3% on each side of the sale. I sure as hell didn’t like paying $45000 to the agents but we would have listed (and sold) the house for $50000 less if not for our agent’s prodding. So in the end we cleared an additional $5000 by not getting nervous and accepting her advice.
We thought the market was cooling down too much to support a price on the high end of the range. We were wrong. It sold in one week.
But isn't it usually the exact opposite of your experience? That is, the agent will happily encourage you to sell it at a lower price because she wants her commission now, rather than a very slightly greater commission 6 months from now?
As an example, suppose your house could sell for $750,000 immediately with you paying a 6% commission of $45,000. Or, suppose the same house could sell in 6 months (after a lot of showings) for $800,000 with you paying $48,000 in commission. The $50,000 extra you'd make on the sale is really big for you. But the extra $3000 the agent makes for months of extra work and waiting around is nothing. She'd rather take her $45,000 after selling it cheap after 1 week and then move on to sell another house.
Isn't that the normal dynamic?
EDIT: I've heard that you can write a listing contract so that the agent's fee is tiered. So, for example, they'd get 1% if they sold it for $500k because even a "for sale" sign written in crayon in front of the house would sell it, but then 6% on the amount between $500k and $750k, and a juicy 18% or whatever on the price above $750k. But does anybody actually do this?
> So, for example, they'd get 1% if they sold it for $500k because even a "for sale" sign written in crayon in front of the house would sell it, but then 6% on the amount between $500k and $750k, and a juicy 18% or whatever on the price above $750k. But does anybody actually do this?
The problem is that doesn't really fix it. You want them to get the $800K even though the $750K offer walks in the first month. But the $750K offer nets them $20,000. The $800K offer nets them $29,000 -- 45% more to get a ~7% higher price, but for doing 500% more work. So they still take the $750K the first month and then spend the other 5 months selling five more houses for $750K each.
In theory you could make the math severe enough work out the other way, e.g. they get 0% for the first $750K and then 50% of anything over it. But then the problem you have is valuing the base price appropriately. If you set it at $800K then they don't even bother trying to sell your house, but if you set it at $600K then they're back to being better off to sell six houses in six months for $750K each instead of one for $800K, and you end up paying them a very large commission for the privilege.
I've sold twice, and both times the agents gave me a range to offer at based on how long they thought it might take to sell. They were very much "on my side" so to speak.
I think the thing your example overlooks is the power of referrals. The happier you are with them, the more likely you are to refer friends and family to the agent when they ask you for a trustworthy recommendation. Like any sales gig, a network of happy customers takes time to build and is where the real money is at.
> "That is, the agent will happily encourage you to sell it at a lower price because she wants her commission now, rather than a very slightly greater commission 6 months from now?"
The listing agent is incentivized to price your house as highly as possible while still selling it quickly.
Under most normal circumstances this aligns exactly with a seller's best interests.
The problem here is that who knows if your listing price was optimal. I know some real estate agents who would argue that in a hot market, you should list for significantly less in order to create a bidding war.
It doesn't make sense to compare this outcome to what you -- an amateur -- would have done.
For real though--you're happy with paying $45K for that advice? Rather than do a bit more research, you're okay with letting a realtor take away almost all of the economic surplus?
I should probably care more, but after netting about $750k fixing up houses over the past 20 years while my wife and I worked full time jobs, I don’t. Estimates had converged on between $860k and $940k from various realtors and models; we took her advice, listed at $950k, and ended up with about $300k in net profits.
FSBOs don’t usually sell as well for the simple reason that REA caravans don’t hit them. This is kind of important since we live 2000 miles away from where we were selling. We’ve seen some 1% agents and they were possibly worse than nothing (we soaked a seller with shitty agents for about $35k when we started to walk away after an inspection).
Our agent also dealt with endless bullshit (reassessment, delivering an ultimatum to an annoying tenant when my wife folded, etc) for a couple months leading up to the sale. We wanted to unload the house and NOT deal with finding a new tenant. I think this is the part people underestimate — it’s NOT just the $5k net. It’s also all the crap we didn’t have to deal with while living 2000 miles away and both working full time jobs. There are endless time sensitive documents, amendments, etc that I didn’t have to grind my teeth about.
Honestly I’m starting to wonder how many houses the friendly Internet Experts have sold. It’s a shocking amount of bullshit to navigate.
Totally agree. I always think that negotiating a salary as a company accountant must be pretty easy because you know exactly what’s going on. That’s why I don’t understand that a lot of employees are against salary transparency. Maybe they think they got a great deal but from my experience most people who think they got a good deal in reality don’t.
I can look at the salaries of the companies that advertise salary transparency and know for sure that I’m getting a better deal than I would get there.
Information is power. In my company the financial guys also have a very regular promotion schedule compared to R&D where you are pretty much stuck after a few years.
This is the labour/capital struggle that your socialist friends talk about. In capitalism, labour produces the products, but capital still has control.
Which is why it's so important for things like unions to exist. Without a union, writers wouldn't have any way to fight back against packaging.
No, it's specifically labor of superintendence which has control - as distinguished from both capital and "wage" labor. Equity owners often get screwed just as badly because of these control issues, which is one reason why firms might want to resort to issuing debt, and the root reason why issuing equity (as in, title to a share of profits) is in turn bundled with ceding some amount of control over the firm.
> This is the labour/capital struggle that your socialist friends talk about. In capitalism, labour produces the products, but capital still has control.
In what sense do Sales people own the means of production and exploit engineers? They're simply closer to the flow of money and able to take advantage of information asymmetry.
This is a different phenomenon, and a more interesting one in my opinion. It's part of the difference between those who make a thing, and those who do supporting business functions that happen to put them in an advantageous position.
> The talent who actually produce the product are in the dark.
So you think the 'talent' is able to be 'talent' without the sales and management? Do you know how many people (in entertainment) are where they are not solely because of talent but because of sales and marketing? Ditto for software. You think that the google guys (Larry & Serge) would be able to make it on their own strictly on their own 'talent'? All that matters is Wozniak, Jobs the 'con-nive-er' didn't matter?
And I am not saying this in a 'well without the Janitor we wouldn't..' type of way either. Sales, marketing and management is a very important part of the process.
> seem to carve out a larger slice for themselves, often in increasingly clever ways
Yet you don't think that the same cleverness leads to sales at the company and/or other benefits?
It's not about who can't do without whom. It's about who creates most of the value that is ultimately delivered to the consumer. No matter how you slice it, no scheme in which the intermediaries make orders of magnitude more than the producers is fair, and especially so when intermediaries can do this because they are operating from a position of power.
(Unless you adopt a radically unconventional definition of "fair", such as "whatever a laissez-faire market produces is fair by definition".)
It’s probably because I know very little about how Hollywood works, and I’m definitely coloured by how much of HR departments we seem to be able to automate and digitise these years. But why do writers need agents? Why does anyone really need an agent in 2019?
I mean, I understand the value of lobbying and networking, I use it quite a bit in my own life, but is it really so hard for writers to connect to employers, that they need to pay someone to do it?
It's not hard for writers to connect to employers. It's hard for studios to connect to competent writers without wading through a tidal wave of utter dross.
From the studio POV, an agented writer is likely to be at least reasonably competent. From the writer POV, an agent is likely to be at least a reasonably competent negotiator and have direct industry contacts.
The idea is that the studio gets people who can do the job without having to read thousands, perhaps tens of thousands, of terrible scripts from wannabes. Agents try to talk up writer fees and include standard extras because writers have no clue what their services are worth to a studio, and many don't understand the finer points of studio contract law.
When the system works, everyone benefits. Of course it doesn't always work, and writers get screwed in all kinds of creative ways. But agenting means that on balance they still do better than they would going up against Gigantic Media MegaCorp Studio on their own.
Now, streaming has created an explosion in TV programming, and some agents are setting themselves up as production houses rather than as talent managers.
This changes the balance of power and makes agents more like an employer with a vested interest in cutting a deal than a representative with an interest in cutting a good deal for their client.
> Of course it doesn't always work, and writers get screwed in all kinds of creative ways. But agenting means that on balance they still do better than they would going up against Gigantic Media MegaCorp Studio on their own.
Interesting concept. In the tech industry, I'd be much more okay paying an agent or agency directly to represent me than being in a union, since I'd be able to vote with my feet (by switching agencies) and my money if I feel a particular agency is not properly representing my interests.
Unfortunately, here the writers are being represented by both an agency and a union and are therefore being double-billed, so to speak.
Plus, as an employee, I negotiate salary and benefits with confidence but always keeping in mind that I'm negotiating against someone who I have to work with once we sign the contracts - you can only push your position so strongly while maintaining a comfortable working relationship for the long term, you can say "its just business" all you want but people on the other side still get their feathers ruffled. In some sense, the agent or recruiter here is also being paid to be the asshole - everyone expects it of them, hardball is part of the deal, the employee being hired can just sit back and shrug and say "hey, my agent is tough to deal with sometimes, but they're good at their job" and reduce confrontation with their new boss. On top of that the agent has perspective on market rate for a role that goes well beyond what you could hope to gather in Glassdoor, by asking friends, etc. If it were commonplace in tech, I'd absolutely hire an agent on my behalf if I were doing gig work.
Does the entertainment industry use standardized contracts, term sheets, whatever it's called? Or is everything negotiated case by case?
From the outside looking in, it seems that one of Y Combinator's core innovations (contributions) is normalizing that stuff, giving everyone the same deal. Reduces friction, increases certainty. Thereby improving the market.
The unions provide standard negotiated templates usually, which many contracts are based on, but with significant amounts of bespoking on a case by case on top of them for any major talent.
> It's not hard for writers to connect to employers. It's hard for studios to connect to competent writers without wading through a tidal wave of utter dross.
So agents are a filter, like tech recruiters, essentially.
> It's hard for studios to connect to competent writers without wading through a tidal wave of utter dross
Looks like there’s an opportunity for the Writer’s Guild, with the help of a few technologists, to create an internal peer-review system. (Ideally, where reviewers are blind to the writer’s identity.)
I think you have the question backwards. I wonder why more people, especially in tech, don't have agents.
Broadly speaking, writers are freelancers who enter into short-term high-value contracts for work-for-hire. Agents negotiate the contract on the writer's behalf, with the agents compensation depending on the writer's (this, in fact, is what the current dispute is about, as this has become less and less true). This ensures that the writer gets a good deal, ideally the best deal possible. Talented writers aren't necessarily talented negotiators or networks, so this division of labor works well.
Seems to me everything I just said also applies to freelance Tech Workers. But instead of Agents we get marketplaces like oDesk or TopTal where freelancers are competing against each other, often in a race to the bottom.
Asktheheadhunter.com has lots of good information about how to tell good recruiters from bad, how to help them help you, and more. Not affiliated, just spent a lot of time reading and used to subscribe to his newsletter.
I think this is the root of the problem. Say you're a studio making a movie and you want to hire, say, 5 writers, 25 actors, 10 special effects editors, 3 stuntmen, etc. You'd prefer to get them as a package because it's easier for you and you have a better chance of them working well together.
The agencies stepped in and provided that service, but now they have an obvious conflict of interest. If they get $10 million for all of those combined it's now up to them to decide how much each of their individual clients get and, therefore, how much of that $10 million the agency keeps. They have a clear incentive to get the clients to accept less.
I don't know how much of an impact it really has. The superstar writers that can actually use an agent probably aren't being packaged. The interchangeable cogs that don't really need an agent end up with an agency that's more like a staffing firm. I think the only ones really getting screwed are those that straddle the line between superstar and cog. Their agents have an incentive to keep them in the packages while it would be better for the writer to be in the superstar category.
> Say you're a studio making a movie and you want to hire, say, 5 writers, 25 actors, 10 special effects editors, 3 stuntmen, etc. You'd prefer to get them as a package because it's easier for you and you have a better chance of them working well together.
This is called a production company and it has existed as a concept for a long time. Amblin is Spielberg's production company, Bad Robot is JJ Abrams', Syncopy is Chris Nolan's, etc.
It's just another layer of abstraction... ok now the production company has given the studio a nice package of talent to sign a contract with, but how did the production company create that package? By signing talent, which means there's still a role for talent agency. They're just negotiating with the production company instead of a studio.
What big talent agencies tried to do was collapse those two layers--production company and talent agency--into one. They wanted to do this because production is lucrative, especially when you don't have to negotiate with talent! Because you supposedly "represent" them.
> The interchangeable cogs that don't really need an agent end up with an agency that's more like a staffing firm.
I mean, I'm sure this maps to how the big companies think about staffing, but I doubt you'd find many people in the film industry who think of themselves as "interchangeable cogs". This fundamental disagreement about value is why contract negotiations happen in the first place.
>This is called a production company and it has existed as a concept for a long time
Not really. A production company actually makes the movies/show. What I am talking about is more akin to a staffing firm.
>It's just another layer of abstraction.
It's specialization, not abstraction. Agencies can be good at acquiring talent while studios can be good at producing movies.
>I mean, I'm sure this maps to how the big companies think about staffing, but I doubt you'd find many people in the film industry who think of themselves as "interchangeable cogs"
You think they would have figured it out after their last strike.
> is it really so hard for writers to connect to employers, that they need to pay someone to do it?
My experience is that, in many, if not all fields, people are experts at their particular skill only.
Writers are good only at writing, developers are good only at developing, and so on. Making connections and finding work is a different set of skills that many don't have.
Do they need to pay someone to do it? Well, in theory, they don't need to.
But that means learning a skill they probably don't like. Many developers are introverts who don't want to spend time talking to people. My guess is that writers too prefer to work on their own.
I think it's because more than anywhere else showbiz is about connections. And an agent is your API to "connections".
I generally do share the same skepticism. Does it really have to work that way? Can't just have a talent database where you can query for certain characteristics and within seconds see profiles with photos and videos of example work?
I imagine a lot of agents are retained for, "I'm a nobody who has done 2 Colgate commercials. Go campaign for me among your connections and get me to the next rung of the ladder." I appreciate that we are talking writers, not actors. But the same concepts apply.
- gatekeeping. Agents help studios/producers make sure they’re only talking to people suited for projects. Every project has super specific needs in terms of actors and writers. Agents stake their reputations on putting good choices in front of the decision-makers. Hollywood has tons of ambitious people vying for opportunities. Entry-level folks have an especially tough time breaking in, without having an agent vouch for them
- gig-like nature of Hollywood. Writing a movie or a TV season only takes a few months. Writers and actors are always hustling for the next gig. Agents help bear some of the workload so that writers can focus on writing, not scheduling meetings, negotiating contracts, searching for the niche opportunities that suit them, etc.
- bespoke nature of the contracts. The split depends on a lot of factors: how famous the actors are, how accomplished the writers are, etc. That means every project requires negotiation, and it’s nice to have someone in your corner who’s a pro at that.
- difficulty of closing a deal and the low close rate. Even for accomplished writers, it’s a long road to getting something actually made, punctuated by periods of waiting. It means that there are lots of business-related decision points where agents can be helpful, and it means that writers try to keep multiple irons in the fire -contributing to more work on the business side.
- relatively large amounts of money involved. Obviously there’s a lot of money in Hollywood for talent, relatively to most industries, so there’s room for agents to carve out livings
I also wonder if a preference for secrecy plays a role? e.g. as a writer, you need information about projects to make decisions, to craft a pitch, etc., and agents help mediate the flow of information.
Because being good in a field means your time spend in that field is valuable. Running around having meetings with people and trying to set up future work, negotiating pay ect. is time not spend in your field.
It’s not that agents have some secret knowledge that artists simply cannot learn, it’s just that the time effort and network of an agent is entirely orthogonal to the art itself.
Well that is a question many writers are asking themselves. What agents can offer is contacts, introductions, sage advice and the benefit of experience, to both writers and to studios, show runners etc. But eventually, agencies will always start to consolidate power, and start to act more like cartels, controlling the studios access to writers, and the writers access to studios.
In the past, this has led to individual agents breaking away from an agency, and using their contacts on both sides to start something new, and more mutually beneficial. I believe Endeavour started out like this in a round about fashion. But over time, Endeavour has grown, consolidated power and has become the same poison it was once the antidote to.
The WGA's new staffing system may well make the current agency model obsolete. And if that happens, agents themselves will have to go back to their roots and rediscover what their actual value is.
A large percentage of the worlds GDP goes to middlemen of all kinds. Hollywood agents, recruiters, real estate agents... the internet has kinda promised to do away with that, to connected people directly, do create efficient market places but has not yet fulfilled this promise. Ecommerce has closed many retail gold mines, but I wonder why VCs haven't identified services as something to sytematically disrupt.
My guess would be that the studios view the agents more as talent aggregators[1] and are probably very difficult to deal with unless one has one. Similar to how in tech as a contractor you can't deal with many companies without going through a contracting firm. (i.e. larger companies often won't deal with independent contractors directly) In both cases, the talent is viewed as a commodity and the middlemen both deal with some of the 'people' headaches and decrease the individual negotiating power of the talent unless/until they manage to break out as a singular talent. So in many ways, agents these days appear to really be contracting firms with (historically) a bit more transparency as to what their cut is.
[1] Note that the 'packaging deals' referenced in the article seems to confirm this notion.
When you are that well-known, it's even more useful to have someone specialized in managing that brand. By your argument, Coca-Cola should fire their marketing department because they don't need it anymore.
This has been and is currently happening thanks to social media. I imagine it’s part of what has emboldened the WGA to make this move now.
It use to be you needed an agent to vouch for you to an executive high up in studios. Together they would hash out if your content would be wildly received by a large enough group of people to turn a profit.
Now you have digital equity in the form of followers to show that you personally already have entertainment equity. The old guard isn’t willing to put their money fully into this new entertainment Avenue, in part because of how entrenched they are in the profits of the current machine. Studios can make money for selling a script, premiering the movie, product placement in the movie, printing the dvds, offer subscriptions to their streaming services, running advertisements on all of that as well, and distribution of the physical dvds.
But it’s changing and I would estimate it’s about 1.5 more generations away from the younger guard upending the system completely.
"The Code of Conduct is a landmark agreement that realigns agency incentives with their writer-clients and eliminates the conflicts of interest inherent in agencies’ receipt of packaging fees and financial interest in production entities. Agencies signed to the Code may only represent writers for a 10% commission and may not receive packaging fees or be affiliated with a company producing or distributing motion pictures.
The Code also contains important provisions on how agencies must represent writers, provide timely information to the WGA to enforce the collective bargaining agreement and writers’ individual agreements, and promote non-discrimination and inclusion."
It's worth listening to the last few episodes of the Script Notes Podcast. John August (Big Fish, Titan A.E., Charlies Angles) is on the board of the WGA and they've been keeping listeners up to date with these negotiations.
This episode in particular is a good overview of what's going on and what the complaints and objectives are...
Is the association of agents quoted in the article a union for agents? I haven't heard of any union vs union fights happening before, so this could be interesting.
> I haven't heard of any union vs union fights happening before
Are you being sarcastic? Unions fight with each other all the time like any other group with their own interests. Unions will try to get the best deal for their own people which of course inevitably means someone else getting less.
This happens all the time when doing onsite tech. Everythig stops while the union authorized guy does the simple thing before anyone can continue their non-union contract work. I had to start baking the cost into the price after the first few times eating it. While I see the need for unions, and cannot suggest a superior implementation, the current incarnation seems to hurt as much as it helps in most cases.
Try setting up an LDAP group without being part of the LDAP team. Try ordering a replacement drive for your laptop without being part of the procurement team. Try opening holes in the firewall without being part of the network security team.
Unions really don't have much to do with this problem. It's merely an aspect of the division of labor. It's also probably a net-negative for the factor to have production stop so a worker can replace a bulb (assuming the production isn't stopped because of the bulb).
Does the LDAP group submit a Grievance to your org? Do they demand to be paid wages lost from your usurpation of their role? Apples to Oranges. Ftr I am pro-union but this is a uniquely union problem
> Does the LDAP group submit a Grievance to your org?
If you went in and made unauthorized changes, for sure.
> Do they demand to be paid wages lost from your usurpation of their role?
That depends. If we're talking about, say, government contracting, and the LDAP team is paid on a per-request basis, and you circumvent this, yes, they would rightfully demand to be paid what they're entitled to in the contract. Of course, in this case, it's probably two separate employers in one larger organization, but it does happen.
In the case of unions, the union has a contract to do certain things in return for certain compensation. A condition for doing it at a certain price might be that the contract is exclusive. Plenty of examples of this type of pricing in the business world.
There's no LDAP Group Membership Reviewer Union. Management could declare "LDAP group membership requests are now self-service" at any time, if someone presents them with a compelling case that it's better for the company.
At public companies in the US, people get paid to review your LDAP group membership requests for a simple reason: CEOs and CFOs don't want to go to jail for failing to comply with Sarbanes-Oxley.
If you're at a private company, though, and you think the change controls at your company are a net loss in value, that seems like something to discuss with your CTO.
> Two specific practices have gnawed at television writers. One is the agents’ decades-old habit of packaging a roster of talent from their pool of clients for a given project. In return, the agencies waive the usual 10 percent commission fee paid to them by individual clients and collect large sums, called packaging fees, from the studios.
This is a textbook case of selling out one’s clients. Also, 10%!
It’d be interesting to see what kind of technology business could come around as of dealing with this: Agent as a Service? Some kind of group Tinder (multiple writers on a project) / Fantasy Basketball using auctions ? Expedia / Google Ads / stock market with materially different sides to the auction?
Abstain from Hollywood. Consume and support independent media.
If 1% of people stop consuming Hollywood, is that going to change Hollywood? No. But that 1% would be a HUGE market to an upstart/independent market. That new market would be a threat to Hollywood, and that might change Hollywood.
I'm thinking a lot about managers and sales at the engineering firms I've worked at in the past. They get to see the numbers coming in, the salaries of everyone, and have a lot more say over who gets paid what. They've got the data which is power. The talent who actually produce the product are in the dark.