Michael Ovitz: Transforming Hollywood and Silicon Valley

The Legend of Michael Ovitz

Michael Ovitz is widely regarded as one of the most successful talent agents in Hollywood history. His journey from working in a mailroom to becoming a super agent representing some of Hollywood's biggest stars is nothing short of legendary. Ovitz's career has been marked by a relentless drive to win and a philosophy of "win at all costs." While this approach led to tremendous success, it also came with significant personal costs.

In a recent interview, Ovitz reflected on his career and the lessons he's learned:

"We went out to win, and when you go out to win, you make certain sacrifices. We were tough and we were aggressive, and I had a philosophy of win at all costs. When we did, the cost was huge."

Despite the challenges and controversies that have surrounded him, Ovitz remains committed to making a positive impact:

"I want to leave the planet a little better than when I came on."

The Three Careers of Michael Ovitz

Michael Ovitz's career can be divided into three distinct phases, each marked by significant innovations and transformations in the entertainment and technology industries.

1. Founding Creative Artists Agency (CAA)

In 1975, at the age of 26, Ovitz co-founded Creative Artists Agency (CAA). This move revolutionized the talent agency business and transformed Hollywood. One of the key innovations introduced by Ovitz was the concept of "packaging."

Packaging involved bringing together multiple elements of a project - such as the script, director, and lead actors - before presenting it to studios. This approach shifted the balance of power in Hollywood, giving agencies more control over projects and allowing them to negotiate better deals for their clients.

Ovitz explained the philosophy behind CAA's team-based approach:

"We started CAA with a very simple thesis, which was that we were going to do something as a team rather than individually. It just worked really well. Artists enjoyed having a group of individuals to talk to, which is not dissimilar to what these four guys [referring to the All-In podcast hosts] have accomplished. Artists liked being surrounded by multiple people with different skill sets."

2. Bridging Hollywood and Silicon Valley

In the early 1990s, Ovitz recognized the growing importance of technology and its potential impact on the entertainment industry. He began making regular trips to Silicon Valley to explore opportunities for collaboration between Hollywood and the tech world.

In 1992, Ovitz reached out to Bill Gates, initiating a dialogue about the potential convergence of their respective industries. This led to a partnership with Andy Grove in 1993, forming the CAA-Intel Media Lab. The goal was to bring cutting-edge technology to Hollywood and explore new possibilities for content creation and distribution.

Ovitz recalled the challenges of this period:

"We knew something was coming, we had no idea what, but the business did what it always does - it put its head in the sand. No one looked to San Francisco. Today, when I meet with people in the business, it's interesting when I explain to them how streaming has basically changed the legacy business forever."

3. Venture Capital and Silicon Valley Advisor

In 1999, Ovitz began his third career phase when he met Mark Andreessen. This meeting led to Ovitz joining the board of Andreessen's company, Loudcloud (later Opsware), and marked the beginning of his deep involvement in the tech industry.

Through his connection with Andreessen, Ovitz was introduced to many key figures in Silicon Valley, including Reed Hoffman, Peter Thiel, and Mark Zuckerberg. This network allowed Ovitz to apply his skills and experience from the entertainment industry to the world of tech startups and venture capital.

One notable example of Ovitz's impact in this arena was his work with Palantir Technologies. Ovitz played a crucial role in helping Palantir transition from a government-focused company to one with a strong commercial presence. He worked closely with Palantir's leadership to identify potential applications for their technology in the private sector, particularly in the financial industry.

Ovitz described his approach to working with Palantir:

"I met with Alex Karp for three months in his office. I was living in San Francisco three days a week, and I looked at everything they were doing. They only had about 25-30 engineers at the time. I came up with some ideas, starting with three silos: advertising, healthcare, and finance. We quickly narrowed it to finance because it was a no-brainer - the whole world had gone under with the mortgage crisis."

The Changing Landscape of Entertainment

As someone who has been at the forefront of the entertainment industry for decades, Ovitz has a unique perspective on the dramatic changes that have occurred in recent years.

The Impact of Streaming

Ovitz is candid about the disruptive effect that streaming has had on the traditional entertainment business model:

"Streaming has basically destroyed the legacy business. You've probably all seen in the press what's going on with Paramount, where they have purchased the company at a price that's probably 20% of what it used to be. It was one of the great seven horsemen of the entertainment business."

He explains that the fundamental economics of the industry have shifted:

"The entertainment business went from 'you get paid upfront and then you get a piece of the profits' to 'since streaming's come, you get paid upfront, there are no profits.' Your product's in the ether, your book's in the ether, your song's in the ether."

The Rise of AI in Content Creation

Ovitz sees both promise and peril in the rapid advancement of AI technology in content creation:

"If you look past [streaming] and you look to AI right now, it's bittersweet. The things that can be done are mind-boggling. We just saw a slight example - I'm involved with a company out of Germany with three young PhDs from the University of Heidelberg. They have just released their first product of text-to-video. I've never seen anything like this in my life visually. You can say what you want, and it shows up, and I mean it's perfect."

However, he also acknowledges the fear and uncertainty this technology is creating in the industry:

"The people that work in this community - and 250,000 people in Los Angeles make their living in the media business - they are all afraid of one thing, and that is: are they going to have a job or be able to work?"

The Future of Storytelling

Ovitz raises important questions about the role of human creativity in an AI-driven world:

"The question is: can AI have emotion and heart? If you look back all the way to the history of video games, to Pac-Man, which was a nothing game, but it was viral in the world - it had no heart, it was nothing, it was just some thing eating other things. But look where we are today with full-motion video games. And once you get the face and the eyes right in video games and in animation - and animation has done the best of that - it sucks people in emotionally. So the question is: can AI do that, or do they need a human being to do that? And nobody has the answer."

The Changing Nature of Media Consumption

Ovitz observes that the way people consume media has fundamentally changed, largely due to technological advancements:

"The one negative thing that the valley has done for creativity is they have trained viewers, which I thought was impossible 20 years ago, to consume content differently. I want it short, I want it fast, I want to eavesdrop on other people. They don't need to be celebrities - I'm going to make somebody a celebrity that isn't a celebrity and has no talent, but they seem to know how to put makeup on, so I'm going to follow them."

He notes that this shift in consumption patterns is having a profound impact on how content is created and distributed:

"There's data coming out of your eyeballs. You have the streaming services giving filmmakers data on who's looking at what, how old the character should be, how good-looking this one should be, how bad-looking this one should be, what should the heavy look like, who the director should be based on the past 20 films because we've put it in the computer. It doesn't work like that."

The Loss of Artistic Vision

Ovitz laments the shift from a time when studio heads made decisions based on instinct and artistic vision to the current era dominated by data and financial considerations:

"When I started in the business in the '60s, there were only three television networks, seven motion picture companies, there were five publishing companies that published books, and there were five record companies. They were the gatekeepers to everything we read, heard, or saw."

He contrasts this with the current situation:

"It's a different world. I'm so lucky, I can't articulate it enough. I've seen both. I got to work where there were people running studios like Lou Wasserman ran Universal, Dick Zanuck ran Fox, and all the executives - they didn't work for big companies. Some of the companies had stock that traded just on its own, and those that didn't were private."

Ovitz argues that this shift has led to a loss of cultural depth and artistic risk-taking:

"No one that studies film - when I teach at a film class, I will ask: How many of you see black and white movies? Almost no hands go up. How many of you have seen movies prior to 1980? No hands go up. How many of you know who Frank Capra is, or David Lean, or Stanley Kubrick? I just go right down the list of the greats that set the foundation for the American cultural ethos in entertainment."

The Challenge of Free Speech and Censorship

Ovitz notes that the industry is grappling with issues of free speech and censorship in new ways:

"When I started in the business in the '60s, there was actually a department at the three networks that read everything, looked at everything, and told you what you could not do. Some of it was so ridiculous that the creative people went crazy. Some of the biggest fights as agents we ever had was protecting our creatives against the authority of what was the censorship department. And we're right back there now."

He points out that new technologies like AI are creating novel challenges in this area:

"This whole concept of AI - how do you protect... I had a conversation yesterday, something I never thought of. I was looking at cyber companies, and I was on the phone with someone that works at a big cyber company, and he gave me a thesis, asked me what I thought: How could they protect against someone doing a piece of AI that is you, Chamath, and it's got an invoice with you on it approving that that invoice should be paid? The invoice looks very legitimate, it's got your wiring instructions, and it goes to the company, and it's not you, and it's not your invoice, and your office automatically pays the bill. They see you, they see the invoice, they pay the bill. How do you protect against that? That's just the tip of the iceberg, and it's all everyone's talking about right now."

The Impact of Social Movements on Hollywood

Ovitz acknowledges the significant influence that social movements have had on the entertainment industry in recent years:

"Let's start with the woke movement. It's hard to believe that it's had a huge impact on what you see, what you read - not what you hear. Musicians have been really clever about getting around that because if you watch some of their music videos, they just do what they want to do, but it's short form, it's 3 minutes or under."

He suggests that these social pressures have created new constraints on creativity in Hollywood, although he doesn't elaborate further on the specific impacts or his personal views on these changes.

Ovitz's Legacy and Impact

David Sacks, one of the interviewers, offered a perspective on Ovitz's lasting impact on the entertainment industry:

"When I read your book, one of the concepts that really stood out to me was that when you talked about packaging and putting together a package, you always had this concept of what you called 'the motor,' which is it was the element in the package that would make it go. In the example you gave with Jurassic Park, you had the element of Steven Spielberg, and really in that case, the element was the IP that you got from Michael Crichton. You put that together - there were two elements in that case. But that always stuck with me, and you know, even when I'm dealing with startups, I'm thinking about what's the motor here."

Sacks went on to suggest that Ovitz himself was "the motor" for an entire era in the entertainment industry:

"It seems to me that you were the motor not just for CAA, but really for an entire era in the entertainment industry, and I want to give you credit for that."

Conclusion

Michael Ovitz's career spans several decades and multiple industries, from revolutionizing the talent agency business to bridging the gap between Hollywood and Silicon Valley. His insights into the changing landscape of entertainment, the impact of technology on content creation and consumption, and the challenges facing the industry today provide a unique perspective on the evolution of media and technology.

As the entertainment industry continues to grapple with technological disruption, changing consumer habits, and new social pressures, Ovitz's experiences and observations offer valuable lessons for those seeking to navigate this complex and ever-changing landscape. His ability to adapt and innovate across different sectors serves as an inspiration for entrepreneurs and industry leaders looking to make their mark in the intersecting worlds of media, technology, and business.

Article created from: https://www.youtube.com/watch?v=fBGH_Hq0Bm4