8 ms·

This is pretty dense with industry-specific terms, but I think I figured it out. "Packaging" is a talent agency bundling up different creative roles (writer, p

This is pretty dense with industry-specific terms, but I think I figured it out. "Packaging" is a talent agency bundling up different creative roles (writer, producer, actor) for a project (film or tv show) and then pitching that group of people for that specific project to the studios. The agency takes a percentage of the _project_ revenues instead of a percentage of each individual _talents_ pay for the project. This is apparently the standard way things work in Hollywood now and has some consequences: 1. It screws up the "Agent" part of the talent agency. They no longer directly represent an individual's interest (like a Real Estate agent or a Lawyer) because they just want to get people into a "package". This is the main problem described in the article, that there are some massive conflicts inherent to this process. 2. Packaging projects make agencies way more money than directly representing clients. 3. It reverts movie and tv making back to something like the studio days. Every actor isn't really able to work with every director, in order to get something made they need to be "packaged" which means working with someone else from within the same agency. 4. It messes up people lower on the rung more than top tier folks because they're less able to buck the system.

lupire 8y ago
Real Estate agents are famous for not representing their customer's interest. In real estate, half the time (buy-side) your agent is being paid their entire income for the transaction by your adversary. In several states, "your agent" is legally required to disclose the fact that they are not your agent!
- AlexTWithBeard 8y ago
  As usually, the disclosure is done as two crimpled pink pieces of paper with light gray print. The text on the paper tries to be legally correct and understandable by non-lawyers at the same time and fails to achieve either of these purposes. Been through that. Still angry.
- dd36 8y ago
  Your agent, no matter who is paying them, has a fiduciary duty to you. I’ve bought and sold a lot of property and can guarantee you that the fact that commissions are paid by sellers makes zero difference. Really, it’s coming out of the purchase price, which is netted to the seller but technically is being paid by you.
  - nkurz 8y ago
    Your agent, no matter who is paying them, has a fiduciary duty to you. This isn't universally true. In some US states, the frequent problem is that the agent who is showing you homes (and who you tend to think of as "your agent") is not actually your agent (with fiduciary duty to you), but a subagent of the seller (with fiduciary duty to them). Here's an excerpt from recent report on this: --- For many years, a large majority of home buyers and sellers have worked with real estate agents. Most consumers believe that these agents always or almost always are required to represent the interests of the home buyer or seller with whom they are working. ... Yet, real estate agents often are not required by law to represent the interests of the buyer or seller with whom they are working, and many do not. In reality, there are a number of different types of relationships allowed in most states between real estate agents and their clients. • Single agent: The agent works solely for the client and has fiduciary responsibility. A fiduciary agent is “obligated to procure the greatest advantage to his client.” • Designated agent: The agent is recruited by the listing agent to work with a buyer and has fiduciary responsibility to that buyer. • Subagent: The agent works with the buyer but has fiduciary responsibility to the seller. • Dual agent: The agent somehow is expected to represent the interests of both the seller and buyer in a home purchase. • Transactional agent: The agent works with both buyer and seller to facilitate a sale but has no fiduciary responsibility to either party. https://consumerfed.org/wp-content/uploads/2019/01/the-agency-mess-home-buyer-and-seller-confusion-report.pdf https://consumerfed.org/wp-content/uploads/2019/01/the-agenc... --- So while it's possible that you live in a state where you are correct, where subagency and dual-agency are forbidden, in the absence of a signed contract for the services of a buyers agent, others should not follow your advice until they are certain the same is true for them.
    - ry4nolson 8y ago
- gregmac 8y ago
  The incentives are also very messed up, because of the way commission is paid. Freakonomics [1] famously covered this: Commission is typically 6%, which is split 4 ways to the buying agent, their agency, the selling agent and their agency. So your agent personally takes home 1.5% of the selling price -- on a $300,000 sale, they are making $4,500. The difference between selling your house for $300,000 and $310,000 after commission is $9,400 in your pocket -- and a paltry $150 for the agent. Are they going to take the risk of leaving it on the market for an extra week (and spending more time showing it, etc) hoping to make an extra $150? Of course not. (Spoiler alert for the book: unless it's their own home, in which case they leave it on the market for an extra 10 days and sell for an extra 3% on average). Another incentive problem exists on the buy-side: your agent gets paid more money the more you pay for the house. It's literally working against their interest to negotiate a lower price, other than when it's above your absolute maximum. [1] http://freakonomics.com/books/#freakonomics http://freakonomics.com/books/#freakonomics
  - tomohawk 8y ago
    This is why, when selling, its better to use a la cart brokers. You pay a set fee to MLS your place, and set fees for other things. You still need to pay a commission to the buyer broker/agent, otherwise they won't show your place. So, 2.5% or 3%. Traditionally, the commission paid was 5% (split 4 ways), but some markets that got as high as 7%. I once had an agent explain to me (who was bad at math) that this was due to inflation.
    - lotsofpulp 8y ago
      Yeah, I’ve had supposedly educated people try to tell me they tip 20%+ for standard waiter service instead of 15% due to inflation. Some work in finance. And sometimes on tip on the tax too. Crazy times we live in.
      - lsiebert 8y ago
        The real value of wages for waiters has decreased significantly because of inflation. Though that's not really inflation's fault as much as a lack of meaningful wage increases.
- CalChris 8y ago
  It's worse that that. First, all of the money comes from the buyer; that's why they're called the buyer. It goes to the seller who pays the closing costs. So the entire BPP = Buyer's Price of House is (Seller's Price of House + Closing Costs). The buyer will then pay sales tax on BPP. Yes, you are paying sales tax on the closing cost. It's worse still. You then pay property taxes on the BPP which means that you pay property taxes on the closing costs. You can and I did negotiate the BPP and then tell the seller that you will be paying the closing costs yourself and deducting them from the BPP. Then you avoid paying sales tax on the closing cost service and paying property tax on the closing cost service. Oh, and don't even get me started on the financial services industry scam of mortgage interest deductions.
  - 171243 8y ago
    please... tell me more. this is badly needed advice.
666lumberjack 8y ago
It seems to me that it's not just a conflict of interest, but the interest of the agency is actually diametrically opposed to the interest of the talent. By keeping the pay of the talent they purportedly represent as low as possible, they make the overall 'package' easier to sell to a studio (which is how they actually make money).
- scott_s 8y ago
  Yes, Simon points this out explicitly: "Why bother to fight for 10 percent of a few dollars more for this story editor or that co-executive producer of some actor or director when to NOT do so means less freight on the operating budgets of the projects that you yourself hope to profit from? Why serve your clients as representatives with a fiduciary responsibility and get the last possible dollar for them, when you stand to profit by splitting the proceeds of a production not with labor, but with management — the studios who are cutting you in on the back end? Why put your client’s interest in direct opposition to your own?"
- jrochkind1 8y ago
  Hypothetically the more the package costs... wait, the "packager' isn't taking a cut of how much the package costs like they do as an agent (where they take a cut of how much their client gets paid, so a cut of what the studio is _spending_, so they want the studio to spend more, at least on their clients), they're taking a cut of project revenue??? (Or profits, or something in between, either way). Oh yeah, that's evil. They're not representing their client at all anymore. The obvious way to align these interests is that the "packager" should share a portion of their "packaging" cut with the people "packaged". But of course, the point of the whole "packaging" economy seems to be so they don't have to do this.
dharmon 8y ago
Interesting. It seems the only way to get a movie made that's not a studio-originating project, with people who _you_ want to work with, is 1) get your own financing (like DiCaprio schmoozing the 1MDB guy to fund Wolf of Wall Street), or 2) play tit-for-tat with something the studio really wants to make (like George Clooney giving them Ocean's 12 in exchange for them funding his Good Night, and Good Luck).
dalbasal 8y ago
Idk anything about movies, but the idea of packaging "talent" sounds potentially interesting for the startup space. 2-5 people "packages" that can already work well together and know what they can and can't do well. I know I've been in circumstances where something like this would have worked really well.
- treis 8y ago
  > 2-5 people "packages" that can already work well together and know what they can and can't do well. That's a consulting firm.
  - tqkxzugoaupvwqr 8y ago
    Wait, do consultants do actual work instead of just giving advice? (Serious question.) I always thought consulting is just looking at the existing/planned processes and products and saying “You should do X using best practice Y. Here are the details of my deep knowledge.” In contrast, I thought anyone actually working on processes or products but not being an employee is a contractor. If anyone can enlighten me, I’d be glad. I always wondered what consultants do.
    - navait 8y ago
      Yes, there are plenty of consulting firms that will make you an iOS app, web site/application, data processing pipelines(my company). IBM and Accenture are large companies that provide these services. Outside of tech, there are large firms like PwC that audit your books, and do other things you don't have the in-house skills for. Pharmaceutical firms ofter consult out their marketing to companies like ZS Associates. The consulting you're talking about is "management consulting", but there's a huge world of stuff out there.
      - tomjakubowski 8y ago
        It's worth noting that companies like IBM and Accenture are also clients of those kinds of consulting firms that will make you an iOS app, web site/application/etc.
slg 8y ago
The Writer's Guild of America had a good video that also helps to summarize this and why writers are opposed to it. https://www.youtube.com/watch?v=v5p6urW6c7I https://www.youtube.com/watch?v=v5p6urW6c7I
santoshalper 8y ago
Yes, basically this: the big agencies that run the vast majority of the entertainment business have transformed from talent representation into "deal makers"... essentially producers who represent everyone involved in deal. In theory this streamlines the whole process. In practice is royally fucks everyone involved who is not already in a power position. Essentially now, if you are a writer or b-list celebrity, you almost need an agent to represent you when dealing with your agent.

lupire 8y ago

Real Estate agents are famous for not representing their customer's interest. In real estate, half the time (buy-side) your agent is being paid their entire income for the transaction by your adversary. In several states, "your agent" is legally required to disclose the fact that they are not your agent!

AlexTWithBeard 8y ago
As usually, the disclosure is done as two crimpled pink pieces of paper with light gray print. The text on the paper tries to be legally correct and understandable by non-lawyers at the same time and fails to achieve either of these purposes. Been through that. Still angry.
dd36 8y ago
Your agent, no matter who is paying them, has a fiduciary duty to you. I’ve bought and sold a lot of property and can guarantee you that the fact that commissions are paid by sellers makes zero difference. Really, it’s coming out of the purchase price, which is netted to the seller but technically is being paid by you.
- nkurz 8y ago
  Your agent, no matter who is paying them, has a fiduciary duty to you. This isn't universally true. In some US states, the frequent problem is that the agent who is showing you homes (and who you tend to think of as "your agent") is not actually your agent (with fiduciary duty to you), but a subagent of the seller (with fiduciary duty to them). Here's an excerpt from recent report on this: --- For many years, a large majority of home buyers and sellers have worked with real estate agents. Most consumers believe that these agents always or almost always are required to represent the interests of the home buyer or seller with whom they are working. ... Yet, real estate agents often are not required by law to represent the interests of the buyer or seller with whom they are working, and many do not. In reality, there are a number of different types of relationships allowed in most states between real estate agents and their clients. • Single agent: The agent works solely for the client and has fiduciary responsibility. A fiduciary agent is “obligated to procure the greatest advantage to his client.” • Designated agent: The agent is recruited by the listing agent to work with a buyer and has fiduciary responsibility to that buyer. • Subagent: The agent works with the buyer but has fiduciary responsibility to the seller. • Dual agent: The agent somehow is expected to represent the interests of both the seller and buyer in a home purchase. • Transactional agent: The agent works with both buyer and seller to facilitate a sale but has no fiduciary responsibility to either party. https://consumerfed.org/wp-content/uploads/2019/01/the-agency-mess-home-buyer-and-seller-confusion-report.pdf https://consumerfed.org/wp-content/uploads/2019/01/the-agenc... --- So while it's possible that you live in a state where you are correct, where subagency and dual-agency are forbidden, in the absence of a signed contract for the services of a buyers agent, others should not follow your advice until they are certain the same is true for them.
  - ry4nolson 8y ago
gregmac 8y ago
The incentives are also very messed up, because of the way commission is paid. Freakonomics [1] famously covered this: Commission is typically 6%, which is split 4 ways to the buying agent, their agency, the selling agent and their agency. So your agent personally takes home 1.5% of the selling price -- on a $300,000 sale, they are making $4,500. The difference between selling your house for $300,000 and $310,000 after commission is $9,400 in your pocket -- and a paltry $150 for the agent. Are they going to take the risk of leaving it on the market for an extra week (and spending more time showing it, etc) hoping to make an extra $150? Of course not. (Spoiler alert for the book: unless it's their own home, in which case they leave it on the market for an extra 10 days and sell for an extra 3% on average). Another incentive problem exists on the buy-side: your agent gets paid more money the more you pay for the house. It's literally working against their interest to negotiate a lower price, other than when it's above your absolute maximum. [1] http://freakonomics.com/books/#freakonomics http://freakonomics.com/books/#freakonomics
- tomohawk 8y ago
  This is why, when selling, its better to use a la cart brokers. You pay a set fee to MLS your place, and set fees for other things. You still need to pay a commission to the buyer broker/agent, otherwise they won't show your place. So, 2.5% or 3%. Traditionally, the commission paid was 5% (split 4 ways), but some markets that got as high as 7%. I once had an agent explain to me (who was bad at math) that this was due to inflation.
  - lotsofpulp 8y ago
    Yeah, I’ve had supposedly educated people try to tell me they tip 20%+ for standard waiter service instead of 15% due to inflation. Some work in finance. And sometimes on tip on the tax too. Crazy times we live in.
    - lsiebert 8y ago
      The real value of wages for waiters has decreased significantly because of inflation. Though that's not really inflation's fault as much as a lack of meaningful wage increases.
CalChris 8y ago
It's worse that that. First, all of the money comes from the buyer; that's why they're called the buyer. It goes to the seller who pays the closing costs. So the entire BPP = Buyer's Price of House is (Seller's Price of House + Closing Costs). The buyer will then pay sales tax on BPP. Yes, you are paying sales tax on the closing cost. It's worse still. You then pay property taxes on the BPP which means that you pay property taxes on the closing costs. You can and I did negotiate the BPP and then tell the seller that you will be paying the closing costs yourself and deducting them from the BPP. Then you avoid paying sales tax on the closing cost service and paying property tax on the closing cost service. Oh, and don't even get me started on the financial services industry scam of mortgage interest deductions.
- 171243 8y ago
  please... tell me more. this is badly needed advice.

666lumberjack 8y ago

It seems to me that it's not just a conflict of interest, but the interest of the agency is actually diametrically opposed to the interest of the talent. By keeping the pay of the talent they purportedly represent as low as possible, they make the overall 'package' easier to sell to a studio (which is how they actually make money).

scott_s 8y ago
Yes, Simon points this out explicitly: "Why bother to fight for 10 percent of a few dollars more for this story editor or that co-executive producer of some actor or director when to NOT do so means less freight on the operating budgets of the projects that you yourself hope to profit from? Why serve your clients as representatives with a fiduciary responsibility and get the last possible dollar for them, when you stand to profit by splitting the proceeds of a production not with labor, but with management — the studios who are cutting you in on the back end? Why put your client’s interest in direct opposition to your own?"
jrochkind1 8y ago
Hypothetically the more the package costs... wait, the "packager' isn't taking a cut of how much the package costs like they do as an agent (where they take a cut of how much their client gets paid, so a cut of what the studio is _spending_, so they want the studio to spend more, at least on their clients), they're taking a cut of project revenue??? (Or profits, or something in between, either way). Oh yeah, that's evil. They're not representing their client at all anymore. The obvious way to align these interests is that the "packager" should share a portion of their "packaging" cut with the people "packaged". But of course, the point of the whole "packaging" economy seems to be so they don't have to do this.

dharmon 8y ago

Interesting. It seems the only way to get a movie made that's not a studio-originating project, with people who _you_ want to work with, is 1) get your own financing (like DiCaprio schmoozing the 1MDB guy to fund Wolf of Wall Street), or 2) play tit-for-tat with something the studio really wants to make (like George Clooney giving them Ocean's 12 in exchange for them funding his Good Night, and Good Luck).

dalbasal 8y ago

Idk anything about movies, but the idea of packaging "talent" sounds potentially interesting for the startup space. 2-5 people "packages" that can already work well together and know what they can and can't do well. I know I've been in circumstances where something like this would have worked really well.

treis 8y ago
> 2-5 people "packages" that can already work well together and know what they can and can't do well. That's a consulting firm.
- tqkxzugoaupvwqr 8y ago
  Wait, do consultants do actual work instead of just giving advice? (Serious question.) I always thought consulting is just looking at the existing/planned processes and products and saying “You should do X using best practice Y. Here are the details of my deep knowledge.” In contrast, I thought anyone actually working on processes or products but not being an employee is a contractor. If anyone can enlighten me, I’d be glad. I always wondered what consultants do.
  - navait 8y ago
    Yes, there are plenty of consulting firms that will make you an iOS app, web site/application, data processing pipelines(my company). IBM and Accenture are large companies that provide these services. Outside of tech, there are large firms like PwC that audit your books, and do other things you don't have the in-house skills for. Pharmaceutical firms ofter consult out their marketing to companies like ZS Associates. The consulting you're talking about is "management consulting", but there's a huge world of stuff out there.
    - tomjakubowski 8y ago
      It's worth noting that companies like IBM and Accenture are also clients of those kinds of consulting firms that will make you an iOS app, web site/application/etc.

slg 8y ago

The Writer's Guild of America had a good video that also helps to summarize this and why writers are opposed to it. https://www.youtube.com/watch?v=v5p6urW6c7I https://www.youtube.com/watch?v=v5p6urW6c7I

santoshalper 8y ago

Yes, basically this: the big agencies that run the vast majority of the entertainment business have transformed from talent representation into "deal makers"... essentially producers who represent everyone involved in deal. In theory this streamlines the whole process. In practice is royally fucks everyone involved who is not already in a power position. Essentially now, if you are a writer or b-list celebrity, you almost need an agent to represent you when dealing with your agent.