The Economist decides that entertainment is a difficult business, and that key to success to to strike the appropriate balance between creative and business impulses – duh:
- ONE by one, the men of extravagant vision and exaggerated showmanship have been toppled from the upper ranks of the world’s media giants. The departure of Steve Case from AOL Time Warner and of Tommy Mottola from Sony Music are only the latest in a lengthening line-up that includes Bertelsmann’s Thomas Middelhoff, AOL Time Warner’s Jerry Levin and Bob Pittman, Vivendi’s Jean-Marie Messier, Canal Plus’s Pierre Lescure and EMI’s Ken Berry. Into their places has stepped a parade of dull men in suits, such as Andrew Lack, new head of Sony Music, who has never worked in the record industry, Jean-Rene Fourtou, an ex-pharmaceuticals boss, at Vivendi or, at Bertelsmann, Gunter Thielen, ex-head of the group’s printing and industrial operations.
This trooping of grey faces into the unruly media world marks a distinct change of mood. Talk of “vision”, “synergy” or “new paradigms” is out; the daily grind of evaluating and improving operating performance is paramount. Gone are the days when moguls such as Mr Messier posed jauntily for Paris Match, a French celebrity magazine, while skating in Central Park. Except for the two wise old birds of media – News Corporation’s Rupert Murdoch and Viacom’s Sumner Redstone – today’s rising media stars, such as Tony Ball at BSkyB, Britain’s leading pay-TV operator, or Jeff Bewkes, co-deputy head of AOL Time Warner, go largely unrecognised on the streets and unquoted in the press.
The need to return to the basics of the business was summed up recently by Peter Chernin, Mr Murdoch’s right-hand man at News Corp. “What the hell were we thinking?” he asked. “Where did [the industry] get our grandiose ideas the media business was on the way to complete and utter re-invention?” His point was that during the boom, the industry was distracted by gadgets, mergers and convergence theories; now it is time to relearn old lessons about fostering creativity and manufacturing entertainment that people are willing to pay for.
….Entertainment bosses therefore need certain qualities: a readiness to take big risks, laser-quick reactions to fickle changes of taste, and a supreme confidence in their own gut instincts – all virtues, as Michael Wolf puts it in his book “The Entertainment Economy”, that reinforce the mogul model of leadership. But the best moguls trust their managers to take decisions too. “Show business doesn’t attract leaders who know how to listen properly or leave people alone,” comments Roger Fransecky, head of the Apogee Group, which advises many media bosses. “But when you manage creative people, you must intrude carefully.”
Resisting the temptation to interfere, but at the same time enforcing operational control, makes for a delicate balance. With their unpredictable, autocratic management styles, Messrs Murdoch and Redstone might look like ruthless meddlers. Yet in fact each gives his trusted division heads and right-hand men – respectively, Mr Chernin at News Corp and Mel Karmazin at Viacom – the freedom to get on with their jobs.
….On paper, the recipe for successfully managing an entertainment company appears simple: carve out small creative units within big companies to give them their own identity; grant them creative freedom from meddling bureaucracies; but do not do either recklessly. Yet striking the right balance between the artists and the suits remains remarkably hard.
Over the years, entertainment companies have often failed, and have instead swung, alternately, from being too strongly in favour of letting creative types rule, towards being too much in hock to the bean-counters. EMI has lurched from periods when the suits were in charge, notably under Jim Fifield’s stewardship from 1988 until his sacking in 1998, to times of financial excess, when the creatives went untamed, as happened with the rise of Mr Berry in the late 1990s until his eviction in 2001. The firing of Mr Mottola from the loss-making Sony Music represents yet another attempt to bring an end to an era of creative and financial extravagance: Mr Mottola was so close to the talent that he ended up marrying – and later divorcing – one of the artists he had once signed in her pre-EMI days, Ms Carey.
If the pendulum theory of managing the creative industries is right, today’s gallery of grey faces may last only as long as the downturn. Boom times tend, after all, to unleash profligacy – and not just in the entertainment business. The best companies are likely to be those that avoid swinging too wildly in favour of either ponytails or suits: both have their place.
Yes, and bears rarely crap in bidets.