The secret to success in media – talent and fearlessness
An interview with Steven Gaydos
In a world that has been racked by massive technological and social changes over the last decade, Steven Gaydos has held a front row seat from multiple vantage points. His successful career in the movie and music industries and his impact on the publishing sector (as an author, journalist and executive) have given him a unique perspective. Today as VP and Executive Editor of Variety magazine, Steven is driving many profitable innovations that are helping to diversify the already thriving business.
Unlike most industry veterans, Gaydos brings a vision and creative energy more often attributed to younger entrepreneurs. He is passionate about quality journalism and authenticity, and has no qualms about speaking candidly about those institutions he feels need a wakeup call.
“In order to sell films to young audiences, Hollywood would present cannibalism as an alternative lifestyle if there were enough social media indicators that it was the next big thing.”
The Guardian, Mollywood, how blockbusters got loved up
“Screenwriting seems like a lost art. I pretty much despise the majority of the American films I see and perhaps as high a percentage of the non-American films. I trace most of the problems back to screenplays, which is usually the fault of producers who either don’t know what makes a good screenplay or are determined to make money off dreck that is based upon stupid or boring screenplays.”
Screenwriter’s Utopia, Ten questions with Road to Nowhere screenwriter Steven Gaydos
The film business is not alone in terms of needing a reformation, which is why I reached out to Steven to hear his thoughts on the state of journalism in today’s volatile media landscape and what needs to be done to help it and other forms of media thrive in the 21st century. I think you’ll find his observations both thought-provoking and entertaining…
Steven, your vantage point and experience has allowed to watch the evolution of media consumers. In your opinion, how are today’s audiences changing the face and business of media and how is Variety engaging with its audiences today?
Variety has responded to the new media consumer and engaging with their audience just as it responded to other changes – keeping up with them and reporting on them as we have been doing for the last 112 years.
A funny thing happened about five-six years ago when we were sold by Reed Elsevier to Penske Media. There were lots and lots of people out there, most of them our competitors, who said Variety can’t handle this new world of digital reporting and Variety can’t handle the technological change that’s happening.
The fact is that Variety has been reporting on technological changes, specifically in terms of the entertainment business, since it was founded in 1905.
Around 1915, about 25 million people a week
went to see vaudeville – a variety show with dancing, singing, xylophone playing, choruses, Cossack troops, jugglers and opera singers. That was the primary form of entertainment. We were the publication of live entertainment because there was virtually no alternative.
Then we became the publication people identified with the movie business, even when the movie business was primarily based in New York, where we were founded. Then radio came in followed by TV. There was a time in the late 1940s or early 1950s when everybody thought TV was going to destroy the movie business because of technological changes.
We’ve been both buffeted by the changes and reporting on the changes for over 100 years, but, ultimately, we’ve been keeping up with them.
Today, we have growth in print when virtually no one else does. We have an exploding digital business. We’re doing lots of different things. For example, I’ve started a Variety Content Studio with our own marketing team creating branded and native content, which is mostly driven by digital consumption.
To sum all of that up in one line, today’s audience is consuming news, information, entertainment in a way that they weren’t 25 or 30 years ago and we’re keeping up with the times.
Speaking of the growth in print, what’s attributing to that? This is obviously bucking the trend of everybody else who is experiencing major slumps in print revenues.
This may sound a bit self-serving, but I think there’s some verifiable truth to it. People in the entertainment business really respect the Variety brand of journalism, the Variety name and the Variety product that we deliver. I think we’re more essential now than ever.
When Jay Penske of Penske Media (PMC) bought Variety, his mission was for us to double down on being authoritative and being a business journalism operation – not splitting into two and trying to be a glitzy place about shoes, handbags, dresses and stuff. Instead he bought WWD, which is essentially the Variety of fashion – Women’s Wear Daily.
He respects publications and journalism organizations for being good at what they do. And our connectivity to the entertainment professionals is where the print product really thrives. It’s a limited circulation publication that’s essential during awards seasons (e.g. Emmys, Oscars®) as a way for people to reach the insiders in the business – the influencers. That’s also where we’re growing a consumer audience.
Through our reputation that was always our foundation, more and more people are finding us and utilizing Variety on a daily basis online and in print. The people in digital are finding us, while the people in Hollywood and in the entertainment business are valuing us. They’re valuing that we’re kind of like the last man standing, if you will, in terms of quality entertainment business journalism.
Speaking of reputation, that’s a very interesting point you brought up because of what we’re seeing is the growing mistrust in media and the difficulty some publishers have growing that brand awareness and recognition with a younger audience. What are you seeing at your end? Is the reputation that you’ve established for over a 100 years resonating with that new demographic which didn’t have a brand relationship with you before?
I think that’s an excellent question. I will tell you this. We work very hard at staying relevant and being connected. There are some things we do, that by their very nature, are incredibly connected and impactful for young readers and
young people in the entertainment business or those interested in it.
Twenty years ago this month, I started something called “Ten to Watch” – an annual list of up-and-comers in acting, directing, producing, screenwriting and comics. We just did Ten Directors to Watch in Palm Springs [California] and Ten Screenwriters to Watch up at Whistler [Canada].
When you’re as good as we are at picking who’s the next group of talents and you’re as committed as we are in finding them, talking about them and celebrating them, that kind of material really appeals to the young readership because they are learning about people in their own demographic who are breaking through.
If you’re a young person and you are interested in the entertainment business, especially film or TV, there’s really some great stuff to read to really understand what is happening, why it’s happening, who is breaking through, how they’re doing it and why they’re doing it. I think that’s incredibly relevant.
A few years ago, I started a new program that is called “Hollywood’s New Leaders” where we pick 40 people 40 and under. Again, if you look at that from the perspective of being 30 years old or 25 years old, you’re really getting case studies right there, in real time, that help you understand how job titles and positions that didn’t exist a decade ago are explosively important. They’re where the action is; they’re where things are happening.
So, I think there are a lot of things we do in terms of focusing on new generations including a lot of student outreach work and publishing an entertainment education report every year.
When Jay Penske bought us, Variety.com had a few hundred thousand unique visitors per month. Less than five years later, between Variety. com and IndieWire.com, we see between 15 and 20 million uniques a month. By the way, that number started growing rapidly within months of PMC ownership. I think we had 300,000 in March and six million in August 2013.
People are finding us through our terrific website and some may get into print. But print is a whole beast unto itself. There’s one statistic that I think is fascinating. By staying true to what Variety does well, we have grown in profitability and revenue dramatically. In 2016, our print advertising revenues were up 10%, where nationwide print advertising revenues were down more than 10%. We’re beating the trend.
Also, in terms of competing head-to-head with what has always been historically our closest competitor, The Hollywood Reporter, they have reported $30 million a year in losses. In addition to whatever they do in terms of managing their numbers and their cost structure, I think their losses are because their identity got blurred. It was once a trade paper; now it’s kind of a trade paper and kind of a glamour/lifestyle paper. For whatever reason, their formula, financially at least, has not succeeded and has actually been failing pretty dramatically. Meanwhile, ours has been dramatically succeeding. What’s interesting about that is we’re succeeding by being who we always were. We continue to keep up and improve – improving the newsroom and the visual quality and feel of our weekly paper.
We did cut out five dailies a week, and that’s the other thing about our revenue growth. We took out something like 500 publishing issue events a year – meaning roughly 250 dailies in Los Angeles and one in New York. We took all of those out of the mix, stuck to just a weekly edition and our revenues went up. By publishing
less, our advertising revenue went up. It’s kind of extraordinary.
It certainly is. What do you think the mission of a journalist is in the 21st century?
Again, you’ve raised a really, really good point there. It feels like a billion people are writing about entertainment these days – maybe not with a lot of connectivity to the actual business, or a lot of knowledge, filters, any real insights or quality controls. Whatever you call it, it’s just a lot of clutter and chatter surrounding us.
When you have a 112-year-old business news organization still functioning and still working hard, you realize there are only a few. It’s kind of like what’s happening in city newspapers and the print world of the dailies across America, which are in such disarray and struggling so much. It makes it all the more clear that a publication like The New York Times and their tradition of excellence makes it feel like it’s surviving. Yes, they have financial problems, but they’re kind of a beacon of light in an industry which has a lot of people running around, talking about “fake news.”
I think that if there’s a lot of fake news that the Times competes with, imagine how much fake entertainment news there is. And maybe it’s not fake; it’s just not smart. It’s sort of the lowest common denominator.
We’ve avoided that mostly. There’s some stuff that we do online where inevitably we get drawn into some stories that I think are a little bit silly. But, I would say 98% of the time, we’re not goosing our online numbers with chatter about inane things. There are some things that I think are a little bit lighter than Variety might have done in the past, but we’re fighting against that and still hitting some really great numbers.
In the state of entertainment reporting and fake news, there is an ocean of stuff out there. And if you don’t want to be part of that, you have to really find ways to have a solid business plan and a commitment that makes you financially sustainable – your numbers have to makes sense as a business and your journalism has to make sense. I feel that we’re doing that pretty well, but we’re not immune to market forces and the difficulties of the journalistic world in the 21st century.
A slightly off topic question…Do you think the entertainment industry has a right or is expected to “meddle in political affairs?”
I was based in London for several years, and this topic would come up fairly often. That is…. What makes a person from Hollywood, an actor or whatever, qualified to talk about social issues?
Well, when Charlton Heston was standing side by side with Martin Luther King Jr. in the march on Washington, I don’t know when we look back, if we regret that he was there standing up for the civil rights of black Americans. I sure as hell don’t mind that he was. I sure as hell don’t think he had no right to be there.
Did Frank Sinatra have a right to tell people, if you don’t want to respect black Americans, and you want to be prejudiced and not allow people in my band or people who are my friends and my professional associates to stay in your hotel or eat in your restaurant, you’re going to deal with Frank Sinatra. Did he have a right to say that? Did he have a right to speak out? Yeah, I think he did.
I’ve always disputed the idea that there’s something wrong with people from the entertainment business having views on important social issues because I look at it this way... I don’t know how much money Meryl Streep is worth, but, she makes a lot of money. She’s a very, very, very experienced, successful businesswoman
outside of being an incredible artist. She’s a more successful business person, it would appear, than our newly elected President because she’s never filed bankruptcy as far as I know. Right?
Barbra Streisand is a filmmaker who directs big films, secures publishing rights, makes record deals all under the business of being Barbra Streisand. She’s not a kid; she’s a grown woman. She’s a seasoned, experienced businesswoman. Those are just two incredible businesswomen who happen to also be artists.
Why on earth would a mature business person who is worth hundreds of millions of dollars, has been working for a living, paying their taxes, being a citizen, being aware and involved and educated (I think Meryl has a degree from Yale) not have the right to say, “I think the Affordable Care Act is a great thing and should be defended. There are 30 million people in danger of losing healthcare under this new administration and I don’t agree with their policies.”
I guess the reason that there is even a discussion about this is this fear that somehow the American people are so stupid that they will be unduly influenced by someone who is a good actor or a good singer. Now, what sense does that make? Would a person in Mississippi or Montana or California or New York hear what Meryl Streep or Marlin Brando say about Native Americans and think, “Well, I better agree with that because I sure liked Marlin Brando in On the Waterfront.”
I mean, it’s dumb. I’m 100% in favor of intelligent, experienced, successful business people in all fields having a sense of civic responsibility, a sense of engagement in their own culture, their own country, the social issues of their day, and being involved.
You’ve shared how successful Variety has been under the Penske ownership and the things that you’ve done in growing audience and revenues. So, what’s next for Variety? What’s next for you personally?
I think that very clearly what’s next for Variety and what’s next for me are sort of the same thing because that’s where I am now and where I’ve been for a while. The Variety Content Studio that I’m helping lead is a really new adventure. I think it has the potential to be an incredibly important part of Variety’s financial health and success. But, I think it also has an incredible opportunity to create native content, branded content and digital projects that are really first rate – informative, colorful, dynamic, enjoyable and great for brands.
It’s kind of interesting because my position at Variety is a little bit funny in one sense. I run the Features department at Variety; and Features, in terms of what I do, are sections that are put on a calendar so that people know that they’re going to be produced on a certain day. If they choose to advertise on those days, then we make money. There’s a church and state separation – a separation between Features and Advertising. But, they are what drive the print product revenues.
I found a way (and the numbers would seem to indicate this is true), to create entertainment business journalism – whether it be about the Cannes Film Festival or about Brett Ratner’s career or about, the Golden Globes, or about whatever subject we’re tackling – to do real quality, insightful, interesting, reputable journalism that makes a lot of money, is good for Variety’s financial health and supports the other things that are done on the news side.
In terms of branded content…For those of us of a certain age, we used to use the term advertorial. And advertorial in print meant something that the advertiser paid for that looked like journalism but was sponsored and clearly labeled as sponsored. Those advertorials
worked, but had a somewhat limited impact on our business.
When people today read Variety or Vanity Fair or The New York Times online and see something labeled branded content – something that looks good, reads good, seems solid and is colorful, visual, exciting and dramatic – the potential for it financially is light years beyond the potential of advertorial in print.
That’s why Financial Times, which is one the greatest news organizations on earth, has its branded content studio. The New York Times, with the greatest journalists in America, has a branded content studio. Starting basically right now, Variety has a branded content studio and I’m fortunate to be helping lead the creative side of it – the production side. That’s the most exciting thing for me. There are lots of other exciting things we’re doing as well. We do about 70 events a year with event sponsorship and experiential advertising through our relationships with film festivals all over the world.
I’ve been part of the Cannes Festival for decades. I’ve had the great, good fortune of actually having been a filmmaker whose film was in competition in Venice and actually won a very nice Golden Lion award for my director. And I’m on my way to Berlin in a couple of weeks.
I love the film festival world and that love is translating into more opportunities for us; it’s still developing and a wonderful part of Variety’s future.
For publishing, music and movie industries to thrive in the next decade what do they need to do?
Here’s the interesting thing. The film business itself is in way more trouble as a business than it would appear when you see that this is the biggest year in terms of Hollywood theatrical grosses. You look a little closer and you see the 3% growth is all based upon an increase in ticket sales; attendance is flat.
Hollywood has made its whole game be blockbuster films. It resembles the packaged goods business more than it ever has. If you look back in history, you’ll see Coca-Cola actually bought a movie studio thinking they could run the movie business the way they ran the Coca-Cola business. That wasn’t true; it didn’t work decades ago. But it’s kind of true now with Marvel and Disney and a lot of other brands. There is a brand/fanboys/comic book/ blockbuster approach to the movie business that is kind of working.
The problem is when you’re in the spectacle business, spectacles aren’t cheap and bets are really big. Keep in mind that a typical Hollywood blockbuster film today can cost $200 million to make and at least another $150 million to market it. That’s a 350-400 million-dollar bet, which means with theatrical revenue structured the way it is, you have to make roughly $800 million to break even.
With certain kinds of movies, you can sell enough toys to make up for the fact that you didn’t make enough money in theatrical. Those are big bets and it’s a hard road to recoupment. That whole business I think is solid but, I just worry that the bets are so big. I have a 20-year-old daughter and having watched her in the past ten years, I wouldn’t be shocked if there was a year that the blockbuster film business started to taper off a little bit, with headlines in Variety saying that people were worried.
But, it’s a global business with 60-70% of revenues on a typical blockbuster coming from outside America. So, we’ll see.
Before I joined Variety, I was a screenwriter and a filmmaker in the indie world – an incredibly rough business. It is really hard to raise money there.
If you go to the Cannes Festival and the market where deals used to be put together and are still put together for movies, you will see how few movies are actually getting financed and how small so many of the movies are.
There is a glut of film at the indie level because you don’t need a lot of money to make a movie. But, you still need a lot of money to market a movie. Let’s say a bunch of us go out and make a movie tomorrow for two or three million dollars and it’s just spectacularly good. The chances are probably about 100 to one that we will lose money because the three million dollars is a meaningless number. We will have to spend $10-$25 million to market that film.
If you make a movie for $1.5 million and you sell it to one of the streaming services and they give you $150,000, by the time you divide that up between your partners and you think about the year of your life that you spent, you’d probably be better off running a feed store in the mountains somewhere.
So, as a sustainable business, indie cinema is really tough. TV appears to be a much better place financially. But, the changing face of young people and what they watch on their phones seems very, very different. And in terms of sustainable business models and the creative side of the business, I see a lot of very, very big challenges.
If you’re asking me, what is your advice to people thinking about being in entertainment production as a career? Very simple advice… Stay very close to the ground. Stay very close to the ground. It’s an old fashioned piece of business advice.
Have a business plan. Have an exit strategy. If you’re going to make a movie for $75,000 with your friends, where are you going to get the $75,000 back? Know that before you spend it. If you’re going to spend a million dollars of money from dentists and lawyers and family members or Kickstarter or whatever, what is your path to recoupment? Stay very close to the ground. Stay very focused on that. That’s one half of the equation.
The other half is to know that the American dream and the ability to dazzle the world and break through and be creative and be successful still exists – those amazing stories happen and I see them every day. There are new people breaking through from every walk of life, everywhere.
But that latter fact is what screws everybody up on the former dilemma. Everybody thinks they’re going to be the one that’s going to break through and they forget that there’s a thousand who aren’t.
So, I have dual advice.
If I were looking at it from a business, I would pay really, really close attention to marketing and sales, my business strategy and an exit strategy.
If I were a creative person, I would say I’m not going to let anything stop me. I was there the day that Quentin Tarantino gave a script to my directing, writing and producing partner, Monte Hellman. In 1990 Tarantino did not have relatives in the business. He did not graduate from USC. He was a kid from the South Bay who worked at a video store and he was incredibly fearless and incredibly talented.
If you are incredibly talented and incredibly fearless, I suspect you will succeed. That’s the combo. Incredibly fearless alone probably won’t get you there. Again, incredibly fearless, confident, determined and talented are those people we write about in – they have the combination that pushes them forward to where it all happens.
Thanks so much Steven. You’ve given us some great insights and advice – a lot to think about going into 2017.