When you have the kind of outsized personality that inspires a TV series, even an appearance at a technology conference tends not to disappoint. But between one-liners and F-bombs, William Morris Endeavor Entertainment co-CEO Ari Emanuel offered a great glimpse into how one of Hollywood’s top power brokers is thinking about the future of his business.
Known best for giving Jeremy Piven the model for his uber-agent character on “Entourage,” Emanuel sounded more like he stepped out of “The Sopranos” in his Q&A Monday night at the Web 2.0 Summit in San Francisco.
As Emanuel sees it, the Internet’s removal of all the traditional barriers to consumers erected over the years by Hollywood gives him a natural advantage as a representative of artists. As he so eloquently put it, “As time progresses and distribution expands, I’m going to be one tough motherfu**er,” he said.
It was just one of the moments during a lively discussion with CNBC (NYSE: GE) anchor Julia Boorstin that elicited howls of delight from the audience as Emanuel sized up his prospects with the blunt bluster we’ve come to expect from his fictional alter ego. Elaborating on changes to the traditional distribution channels, he recalled his bruising but lucrative negotiations a few years ago with Twentieth Century Fox on behalf of “Family Guy” creator Seth MacFarlane, who earned “hundreds of millions” for his TV work from Fox while holding on to his film and digital rights.
“I have never cared what something costs; I care what it’s worth,” he said, in one of several lines that bounced all over Twitter within minutes of being uttered. Another pearl came in his description of the nature of Hollywood negotiations: “Fair is where we end up,” he said of the brutality that goes on at the bargaining table.
Citing the ongoing standoff between Google (NSDQ: GOOG) TV and the broadcasters, Emanuel said he had no qualms about spurning the usual buyers like Fox Broadcasting Co. simply because the highest bidder lay outside Hollywood. “If it’s worth more to Google TV than it is for FBC, than I’m going to Google TV,” he said.
Which isn’t to say Emanuel is entirely enamored with Google either. Emanuel made clear the company doesn’t “really understand what content is,” specifically the resources required to generate quality material. In addition, he believes Silicon Valley doesn’t understand that in a world where distribution is infinite, it’s going to be exclusive deals that offer differentiation in a sea of commoditized content. “I believe I need you and I believe that you don’t realize you need me,” he told the crowd.
Another Emanuel target was an unlikely sector: the publishing industry. Emanuel said one of the motivations behind merging with Endeavor agency with William Morris last year was to get his hands on the book business, where Endeavor had no skin in the game. The reason it’s so appetizing, he said, is because it’s ripe for disintermediation.
“I definitely don’t think i have to go to Knopf. I don’t think I have to go to Simon & Schuster for the book business. So I think that’s going to be a very contentious conversation,” he said. “They might just get hardcover (rights), but I don’t know yet.”
But his most stringent criticism was aimed at his own industry, which he characterized as having dropped the ball on battling piracy. That failure, he said, stems from not providing consumers with digital platforms with easy, cheap transaction opportunities. “We’ve done a horrible job in Hollywood figuring out that mechanism,” he said. “If we’re not going to create a market and an economic model to be monetized in a better way than it has in my business, we’re going to go the same way as the music business.”
Key to Emanuel’s digital strategy is monetizing the social graph. He returned again and again to the notion of yielding revenues from the interactions between talent and fans outside the usual distribution channels. He even teased some of the kinds of things he is working on in that regard, from negotiations with LinkedIn to use it as a programming platform for his agency’s author clients to crowd-financing a movie on Facebook.
In between bon mots, Emanuel spoke at length about how his agency is restructuring itself to grapple with the future, including the formation of a digital-minded marketing agency, Red, and the $300-500 million in fundraising for Raine, a merchant bank that will look for venture-capital investment opportunities. WME has already made investments in the technology space: casual gaming outfit Grab.com, celebrity-centric home-shopping website Open Sky, cloud-computing gaming company OToy and Israel-based content-monetization engine Catch Media.
Asked toward the end whether he could envision financing the next Mark Zuckerberg, Emanuel said he conceivably could because his agency was paying more attention to Northern California. “I think we need to trek up here more and more,” he said, and this time it didn’t sound like a threat.