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Welcome to Hollywood 4.0

27 Mar, 2014 By: Thomas K. Arnold

Studio restructurings are painful. Longtime staff members are laid off, often through no fault of their own. It’s not the quality of their work, or their productivity; it’s part of the ongoing drive by corporations everywhere to cut costs and boost efficiencies. I remember when I first joined this magazine a colleague called a studio publicist a few minutes before 9 a.m. “We’re not open yet,” said the publicist, who must have answered the phone by chance. “Call back during business hours.”

These days, I get emails and calls at 6:30 in the morning and 11:30 at night. Most studio publicists are required to carry their smartphones with them at all hours and on weekends, so they can be reached at any time, at any place. 24/7 is a cliché, but it’s really true. Technology, which we all thought would make our work easier, has done exactly that — but our bosses know this too, and they want to get as much out of us as they possibly can.

Studio executives know they can get more out of less, and they seem bound and determined to do exactly that. It’s the same all over corporate America — hence the “jobless recovery” of our economy and the fact that so many smart, talented people are out of work.

And yet the latest wave of restructurings at the major studios are far more complex than mere “people dumps.” Studio structures are changing not so much with the times as in advance of them. It’s now clear that the future lies in digital distribution — and once that realization hit, studios began prepping for the revolution.

Nothing levels the proverbial playing field so much as the Internet — and if the Internet is going to be the primary mechanism through which studios transmit content to consumers, it’s time for a “one world” approach. We can no longer look at home entertainment in “domestic” and “international” segments the way we did, say, in the early days of DVD, when discs were coded for different territories and even countries so there would be no crossover.

These days, it’s all about crossover — the Web knows no boundaries, and it’s high time we began looking at home entertainment from a true global perspective. That’s why Sony Pictures and Universal Studios recently tapped international business leaders, highly attuned to global business issues, to lead their respective home entertainment divisions. Globalization is no longer a catchy buzzword; it’s rapidly becoming the reality, not just in Hollywood but throughout corporate America.

Now, any time you bring two entities together there are bound to be casualties in “human capital.” You see it whenever two companies merge; there are always redundancies.

And yet the wave of restructurings that is now hitting Hollywood — and believe me, we’re just in the early stages — isn’t driven solely by globalization.

It’s also a reflection of the massive transformation in how we do business. We’ve entered a new era — an area of social networking and big data, of business intelligence and search, of mobility and analytics — that compels studios (and other corporations, for that matter) to completely rethink their business models. The CIO not only has a seat at the table, but more and more he’s driving innovation — he’s not reacting to business needs, but helping to shape and determine them.

Call it Hollywood 4.0. It’s a brave new world out there.

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