October 1, 2024 • 27 mins
Can you imagine a world where artists struggle to earn a living despite creating beloved works? That's the reality we face today, as back-end revenue in the entertainment industry is vanishing, leaving creatives in the lurch. In this episode of Air Jijiji, we share a personal experience with the children's show "Chuggington" to illustrate how back-end deals once served as a financial lifeline for artists. We'll examine the seismic shifts caused by Silicon Valley's disruption, which has redefined the industry to benefit a select few while leaving many artists struggling. We'll also challenge the notion that technology and AI can replace the irreplaceable value of great art.
Shifting gears, we explore how creators leverage new platforms like YouTube and Patreon to reach audiences directly, bypassing traditional media giants. Social media's role in fostering real-time fan engagement has never been more critical. We'll also unpack how blockchain technology and smart contracts could revolutionize back-end earnings, offering a glimmer of hope amidst the tumultuous landscape. Plus, we'll discuss the balance between monetization through advertising and brand partnerships and the unyielding importance of maintaining artistic integrity. Please tune in for a comprehensive look at the evolving business of creativity and where it's headed next.
Thanks for listening.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Welcome to this week's ARGG.
We're going to talk aboutsomething that is complicated,
so I'm going to get through thisas quickly as I can Reach out
to me on studioggio with anyquestions you might have about
this, because this is a bigtopic.
We're talking about IP.
We're talking about vanishingIP and what that means to
artists today, how losingback-end revenue shattered
(00:38):
Hollywood and the untapped IPgold mines waiting to be
discovered.
When the elevator to my studioopened some years back, two
producers stepped off and theyhad a show and they were looking
for music.
I'll get into the show, whichwas Chuggington, on another
episode, but today I'm talkingabout back-end.
(00:58):
Back-end is the part of thedeal that used to be what we
work for.
There was front end and wewould compromise that price in
order to get back end.
It was a pretty simple thing.
I mean, I'd look at the dealand I'd say like, look, I got to
be covered, you got to cover me, you got to support me for the
work I'm about to do, but I'llkeep the price low because I'm
(01:19):
looking at the back end andwhat's happened is the back end
has been vanishing, but thefront end the prices, haven't
gone up, so that's squeezed thecreative market.
This story that I'm about totell you is what happened to an
artist's back end.
Chuggington had a back end andI did a back end deal.
(01:41):
I didn't know then that it wasthe end of deals like that and I
was lucky to catch one, buteverything was going to change.
The two producers that steppedoff the elevator were Sarah Ball
and Don Tote.
Sarah was a front-rankpreschool director who had done
Bob the Builder and this was hernew show, chuggington.
(02:02):
So it was pretty exciting tomeet her director, who had done
Bob the Builder and this was hernew show, chuggington.
So it was pretty exciting tomeet her and it was pretty
exciting to talk about this deal.
But when I signed the contractto produce the soundtracks for
the kids' show, the entireentertainment industry was about
to undergo a disruption thatwould destroy the rights of
artists.
We'd worked years, decades, toachieve these rights and I just
(02:29):
never really understood whyartists became the low-hanging
fruit for Silicon Raiders.
I just don't understand it.
Maybe it's just that artistswere easy pickings.
Maybe it's just as simple asthat.
Many people tell me to move on,surrender and get used to it,
(02:55):
deal with it, and I've had manypeople tell me it's opened a
world of creativity to all.
Like high-end work was someelite group hidden behind walls
that masses could not breach?
And now we have opened thegates with these new tools and
these new deals, this new dealstructure that was given to us.
(03:17):
We didn't ask for it, it wasimposed on us and this is
supposed to have made the worlda better place.
I am not so sure that's true.
It's certainly not true forworking creatives but, more
importantly, I don't think it'strue for creativity, and that's
a big problem.
It kind of is about juststuffing massive amounts of cash
(03:40):
and using our work of cash, andusing our work and by our I
mean every citizen on the planetto charge a gusher of wealth
into a fabled gated community ontop of the mountain.
The fantasy the walls can nowbe breached is the opposite of
(04:00):
the truth.
The walls are now higher thanever.
It's almost impossible to makea living unless you're on the
inside of the Silicon ValleyMonetary Trust Fund, which seems
to be in the pockets of about10 people.
So we're all out here Funny,it's like a plantation economy
(04:23):
and we're the field hands andthey live in the big house.
That's the way it feels to thisworking creative who's been
doing this for three or fourdecades.
Why, why?
I can't get over that question.
Why, why?
Was this the only way to makethe world go forward by taking
rights from artists, changingour work and just dismissing us
(04:47):
as unimportant?
I don't know.
I really just don't know.
It's free-for-all content,creative-free and used to make
money for the anointed class,elite class.
That's the way it feels.
I'm talking about the way itfeels.
And the question is now how doartists make money?
How does it happen If thelandscape has changed?
(05:11):
One thing has not Great art israre and valuable and it belongs
to the artist.
Great art is not a training tool, it's not a commodity.
That's kind of heresy, right?
It's like I'm standing up inchurch and saying I don't
believe in God.
Art is not a commodity.
(05:32):
Not great art, not true art.
It's not a commodity.
It may become a commodity.
Van Gogh's paintings may tradeand sell for more than they were
ever worth when the artistcreated them.
That's different.
I'm talking about creating art.
You can't create art if it's inyour mind that you're being
(05:52):
part of a commodificationprocess.
It just will not work.
The artist needs to be overhere in a bubble, left alone to
create their art.
That's the way you get thegreat art.
You can't go and just hire anartist and say create me great
art.
It just doesn't work that way.
(06:15):
Ai, which is sort of on thescene now and is causing massive
disruptions.
Ai feeds on the past but artfeeds on the future.
Ai feeds on the past but artfeeds on the future.
Do you see what I mean?
(06:35):
Without new art, ai is just asnake eating its tail.
Eventually it will justcollapse in on itself.
So we have to look at that andsay how are we going to deal
with this, unless it's just youknow what we have, what we have
and we're not going to goanywhere new?
There's been so manydiscussions I was reading them
this morning about this problem.
(06:55):
Somebody called it mad cowdisease, mad chat disease,
because the AI is just feedingon old AI and filling up the
internet with AI reflections andit just ends up reflecting
itself.
It doesn't have any new to it.
(07:18):
I mean that's the biggestproblem we have with this.
We need new and to get new weneed to support the artists In
the entertainment industry.
Back-end revenue, the residualearnings from syndication, dvd
sales, internationaldistribution once provided a
reliable source of income forcreators and actors and
(07:40):
production teams.
However, the streaming era hasfundamentally altered this
landscape.
Platforms like Netflix, hulu,disney Plus have shifted the
business model from traditionalback-end deals to flat-front
payments.
Look, if I was going to make amillion dollars in residuals and
(08:02):
now they're going to pay me amillion dollars up front, we
wouldn't be having thisdiscussion.
What's happening is there is noback end and they're paying me
my old fee up front, which wasnegotiated and put together with
back end vision in mind.
So the prices have shrunk and Ihave to take on more as a
(08:23):
producer, as an artist, than Idid before.
I'm responsible for the wholefront end and I've got to
squeeze that whole front endfrom these lower fees with no
return.
There's ways out of this andwe're going to talk about that
right now.
I mean, you have to ask yourselfif they can't afford to pay for
the content that drives theirprofit.
(08:43):
So if they can't afford to payfor the content that drives
their profit, is it becauseglobal accounting is too complex
or nobody is watching?
You know, I just I just don'tget it.
I mean, when it comes down toNetflix, nobody's watching
Netflix because the executivesthat run Netflix are are running
Netflix.
You know it's like let me tunein to see what this executive is
(09:06):
doing.
They're watching Netflixbecause of the working artists
that have given them the content.
This deal was a good deal.
It was good for the executivesand it was good for the artists.
The new deal it's good for theexecutives and it really sucks
for the artists.
The seismic shift has madepursuing back-end revenue more
(09:27):
elusive than ever, while themodel of getting paid once and
hoping for residuals over theyears has faded.
You must ask are there newopportunities here?
Are there new strategies tocreate a back-end in the new
entertainment market?
That's the question.
That's what I'm looking attoday.
So what is causing thisentertainment shift?
(09:58):
Several things.
First, there's streaming oversyndication.
Traditional syndication models,where shows were sold to
networks globally, generatinglong-term revenue, have largely
been replaced by streaming deals.
These are often structured asflat rates, like we talked about
(10:18):
, with no ongoing financialbenefits.
There's no benefits as thecontent gets more views or is
licensed internationally.
There's just no back end.
Another is this is reallyinteresting the shorter
lifespans of content.
Our global ADD doesn't help.
(10:39):
Content cycles are shorter thanthey used to be In the past, a
hit TV show might have enjoyedyears of syndication or DVD
sales, but today content has afaster turnover on streaming
platform.
I mean, it's incredible.
You can go and do an epicfantasy 10 episodes, you know an
(11:00):
hour each, and once you'rethrough it it's like it's done.
People don't even rerun it,unless you're like me and you
watch everything 10 times.
But they just are hungry forcontent.
We need more content and yetthey don't want to pay for it.
I don't know the way out of this.
Globalization has not helped,with streaming services
(11:21):
distributing contentinternationally.
From the get-up, thetraditional aftermarket revenue
from foreign distributions hasdiminished.
Algorithm-drivendiscoverability streaming
platforms rely on algorithms topush new content to viewers,
meaning older content doesn'tbenefit from reruns or
(11:42):
resurgence in popularity like itonce did.
I think as we get deeper intothat, that's going to be a
little less true.
I think older content,evergreen content, game of
Thrones content will be watchedagain and again and again.
However, there is no benefit forthe performers and the writers
and the directors when thathappens, the producers.
(12:04):
There's no large benefit.
We're fighting for it, but sofar we haven't been that
successful.
So are there new back-endopportunities?
Yeah, I think there are, andfinding them is the whole game,
and it's probably a moreinteresting part of what I'm
(12:24):
talking about today.
And number one, something thatwe've been working on here at
the studio is ownership ofintellectual property.
Creators, who own their contenttheir TV series or film or
(12:47):
music podcast have more controlover licensing deals and
distributions.
Negotiating to retain IP rightscan lead to long-term earnings
through merchandisingadaptations, future distribution
deals.
Don't sell the farm.
That's what I say to young,up-and-coming artists.
(13:07):
Don't sell the farm, just buymore feed and seed the field.
Set up shop.
Don't sell Grow.
I think that that's key to whatwe're looking at here.
You can also diversify platforms.
It used to be you did a dealwith Disney and Disney delivered
(13:29):
the eyeballs.
Disney delivered all theeyeballs, or TV's or CBS, but
that's not the case anymore.
That's probably the singlebiggest change.
It's the audience that drivesthe market.
Now more than ever, they arelike a horde of wandering
(13:49):
eyeballs wandering the digitalmedia scape and deciding what to
watch.
It's as likely as to be TikTokas NBC.
Rather than depending solely onone distributor, creators can
distribute content acrossmultiple platforms Netflix, hulu
, disney+, yes, amazon, prime,video, shure, hbo, max, apple,
(14:10):
itunes, but also Google Play,vimeo, youtube, apple Podcasts,
spotify, crackle Shutter, evenPatreon you get the idea.
I've got a list that's a milelong of places that you can
distribute your beautiful show.
As long as you own it, you canmake the deals and just put it
(14:35):
out there until you find whereit needs to be, until the
audience finds you, until theright quorum of eyeballs show up
and go like, hey, I like thisshow.
Then there's direct fanengagement.
I mean, I've always been aboutdirect fan engagement.
(14:55):
When I was young and I had rockand roll bands, the whole goal
in those days was to get a lineoutside the club.
If you could get a line outsidethe club on the night you were
playing, that was like yes, thatwas like your KPI, your key
performance indicator.
Hey, there's 100 people outsidethe club.
That was cool, you were makingit.
(15:16):
Things haven't changed that much.
We can now directly engage withthe fans and I call it the
line-out-the-door theory.
It's as old as the hills, butin 2024, it's on steroids.
You can build a communityglobally if you do it right.
With platforms like Facebook,instagram and TikTok, and then
even as a writer, substacksocial channels, live exclusives
(15:40):
, a million ways you can engagewith people directly and by
engaging them directly, say tothem this is what I'm doing, do
you like it?
Until they say like, yes, I dolike it.
It's sort of like live,interactive, immersive focus
groups, which used to be such aprocess but is now a daily event
(16:03):
that you can put into yourproduction schedule.
Of course, sponsorships andbrand partnerships this is all
still available, except thatit's available to the producers.
It used to be that people wouldbuy media plans from Disney.
They would have these big upfronts in New York and say this
is where we're going and thebrands would line up.
(16:23):
That still goes on and that'sstill big business.
None of this precludes, by theway, big business.
I know, in advertising they'vebeen talking about the death of
the 30-second TV commercial formass marketing forever, but it
hasn't died.
There's a lot of it.
You see it out there all thetime.
It's all over the place.
These things tend toaccommodate each other rather
than wipe each other out.
(16:43):
So sponsorship and brands forsure, the opportunities to
partnership with brands isstronger than ever.
Branded content, productplacement you can successfully
work outside of traditionalmodels, for sure, but be careful
, you can't compromise your workas an artist.
You just cannot.
(17:04):
You cannot tie chains aroundyour spirit, and some brands
will do that.
There are brands out there thatwill say, like we're sponsoring
you, go around your spirit.
And some brands will do that.
There are brands out there thatwill say, like we're sponsoring
you, go do your thing.
So you have to kind of pickyour spots.
You know what I mean.
I spent time in the video gameindustry, so I was introduced to
(17:30):
much of what I am going to talkabout now.
It's a cursed idea and whollymisrepresented and misunderstood
.
The value is still undetermined, but as an artist and someone
who signed an old schoolcontract that still pays the
rent today, I found a lot ofwhat I will talk about next
intriguing.
Let's just say that it'sintriguing.
(17:51):
It's also the Wild West andthere's a lot of pirates out
there or what do you calloutlaws out there, bandits out
there but it's intriguing.
There's something there andwhat I'm talking about is
talking about is blockchaintechnology used to benefit
artists?
There's been artists out therewho've been looking at this
(18:15):
pretty extensively and there's asense that it can work.
Problem is, right now it's alot of con, so you've got to be
really careful.
The rise of blockchaintechnology presents a new
frontier for back-end earnings.
So how does that work?
As a producer, I might attach asmart contract to my work to
(18:35):
offer solid returns to thecreatives who work on my project
.
Right?
What is a smart contract?
A smart contract is like thinkof it as a box and you put
little digital assets.
So Chill Blow does a voice on aproject and I give him a smart
contract which goes into the box.
Now, whatever happens to myproject, joe Blow's smart
(18:58):
contract is attached to it.
I could sell the project.
His contract stays attached toit.
It gets played in South Korea.
We learn about that because thesmart contract is in the project
.
I mean, it's kind of blows yourmind a little bit, right, I
mean it really does.
That means we have an efficientway of doing this.
Now, how do we pull it off withall the shenanigans being used
(19:21):
on blockchain?
I don't know.
I have a feeling that's asolution for the next generation
of producers, but the idea, theidea is probably the most
dynamic idea that's beenpresented to us as artists to
recover our back end, which hasgone missing in the hallways of
silicon valley.
All right, um, the contractsattached.
(19:45):
Let's call them digital assets.
I say digital assets, but what?
What I mean in plain English isthe music, the voices, the
actors, the performers, thesingers, the animators, the
scriptwriters, the copywriters,the directors.
The new digital contract, whichis a living contract, in that
as the creative grows, as theshow goes from audio drama to
(20:08):
animation, to video games, thecontract goes with it.
Use, which is what back-end isreally about.
Use how it's used, how manytimes it's used, is tracked in
pertuity precisely and paiddirectly to the artist.
Are you getting excited?
(20:30):
Because this actually excitesme.
If it doesn't excite you, Idon't blame you.
I'm kind of a geek for thiskind of stuff.
I know it's complicated tofollow, but how cool, how cool
would that be?
Most working artists work on theassumption they do not receive
100% of the royalty.
I mentioned the showChuggington.
I had an old school contractthat was signed in like 2007,
(20:52):
before YouTube was even a thing,and I've done really well with
it.
I mean, it's given me myresiduals every 13 weeks for
years, weeks for years, but I'vealways known I don't get 100%
of the royalty.
You know, because the reportingis a little slipshod,
especially when you have a hitlike that and it gets played in
100 countries.
It's like you know how manytimes have been played in South
(21:13):
Korea.
You know, finding that out isdifficult.
Some places like Germany do afantastic job of reporting and
my royalties from that countryshow it.
In the United States it's alittle wishy-washy, you know,
and my royalties show it.
So the understanding is maybeyou get 60, maybe 70, maybe, on
a good day, 80% of your royalty,but you're never getting 100%.
(21:35):
With what I'm talking about,blockchain technology, you're
going to get 100% of yourroyalty and that's probably why
it's going to be hard to put inplace.
I kind of wonder, because theperformance royalty societies,
they're interested in 100%accuracy.
I really do.
You have to wonder.
Blockchain is a way forward,but who can trust it?
(21:55):
I don't know.
But this is where it gets crazyand where I say don't sell your
IP, just don't sell it, don'tsell your IP.
I mean, think about it.
Iconic imagery, quotes orcharacters from your content can
(22:17):
be turned into products.
All right, from your IP you canget the products Lunchbox
bonanza kind of right.
Only you make the lunchboxesyourself and pocket the change.
License the IP.
You know that guy, mr Wonderful, on Shark Tank.
He's always saying license, Iwant a license, I want to be
involved in licensing deals.
He is so right about that.
(22:38):
He is so right about that.
Elements for games and apps andvirtual environments, the
metaverse.
The metaverse is sort of likecome and gone, it feels like.
But you know the ideas.
We're talking about the ideas.
These can help sustaincreativity long after the
initial release of thecreativity Element.
(22:59):
Licensing, asset licensing it'sthe new syndication in video
games.
They got this down.
They make as much money fromsales of the game as they do
from selling a little sword thatgives your character more power
.
In-game sales are worthbillions.
I wish I had some of thoseTuckington trains in my back
pocket.
To be honest with you, that showis a goldmine of untapped IP.
(23:22):
But the producers came fromanother generation and they've
just let it kind of sit there.
So you know you want to dosomething.
Call me I don't even know whoowns the show, but call me.
Okay, we have things likecrowdfunding.
That's pretty cool, rightAnother kind of line out the
door and audio Audio.
(23:42):
That's why I'm doing it atstudio jijiji.
We start with audio.
It's controlled budget, it'screatively flexible, it's ours.
I can do most of it right herein my studio, I mean it's
growing in popularity.
They provide creators withanother way to recycle and
(24:02):
monetize existing IP spinoffpodcasts, audio adaptations of
films or TV shows, even deepdives into the creative process,
like on AirGigi, you know,advertising subscription revenue
can follow.
This is good, artists, aboutwhat we can do in this
marketplace that we had no sayin and it's been handed to us.
(24:27):
But we're not going to start,we're not going to stop creating
our art.
I mean that's not going tohappen.
So how do we survive?
What's out there?
It's a new reality.
All right.
The entertainment industryconstantly evolves and the
flattening of the back-endrevenue streams has forced
artists to rethink theirbusiness models.
Our corporate overlords areeither clueless or unscrupulous
(24:51):
your choice, you decide whichway it is.
The new reality favors thehustler and, honestly, it's a
pain in the ass.
It's a pain in the ass.
I much preferred it before, whenI would work like a dog and I
would send it out and otherpeople had to promote it and
other people owned it.
But I would keep a piece.
You know, I'd keep a piece,which I would the writer's piece
(25:12):
usually, or maybe mechanicalrelatives, or maybe a piece of
the publishing we would do thesedeals and then someone else
would administer it and thechecks would come in the door
and I would just put them in mybank and I could focus on what I
do best, which is creating newprojects.
That's me.
That's what I do.
Nowadays.
You have to put on a lot ofhats and be a hustler.
That's the way it is, butthere's also some opportunities
(25:35):
in that, because creativity isnot just coming up with a cool
script or writing a cool song orediting a cool video.
Creativity is also can be howyou put the project together,
how the budget works, how themoney is raised and how the
money is spent.
If you put your keep yourcreative hat on all the time, it
(25:58):
can really help.
The world was a lot simpler.
Yes, in the old days when allyou had to do was get a pencil
and paper and send the resultsinto the wind and wait for the
windfall, there were some niceyears just doing that, but those
years are gone.
That does not mean there's noopportunities.
It actually means there is newopportunities.
(26:20):
That's essentially whatentrepreneurship is in the big
picture, and creativeentrepreneurship is what we're
talking about here.
So go out there, be open, takecontrol.
Do not sell your IP and lookfor opportunities to use it in
new and creative ways.
(26:40):
You start thinking like that.
You'll start thinking there'san amazing amount of
opportunities out there for us.
Good luck and thank you forlistening.
This is Air Dajiji.
We're on here every week andwe're talking about all things
about the business and practiceof creativity, and we're lining
up some guests so you won't haveto just listen to me talk all
(27:02):
the time, but we have someguests.
We're going to be revisitingall these topics with guests who
can give us new perspective onthese topics.
So subscribe wherever your earswander.
We're on Apple Podcasts, we'reon Spotify, we're on iHeartRadio
.
I have a soft spot in my heartfor iHeartRadio because I love
radio, so I'm very proud to bethere, and thanks once again for
(27:31):
listening.
Welcome to this week's ARGG.
We're going to talk aboutsomething that is complicated,
so I'm going to get through thisas quickly as I can Reach out
to me on studioggio with anyquestions you might have about
this, because this is a bigtopic.
We're talking about IP.
We're talking about vanishingIP and what that means to
artists today, how losingback-end revenue shattered
(00:38):
Hollywood and the untapped IPgold mines waiting to be
discovered.
When the elevator to my studioopened some years back, two
producers stepped off and theyhad a show and they were looking
for music.
I'll get into the show, whichwas Chuggington, on another
episode, but today I'm talkingabout back-end.
(00:58):
Back-end is the part of thedeal that used to be what we
work for.
There was front end and wewould compromise that price in
order to get back end.
It was a pretty simple thing.
I mean, I'd look at the dealand I'd say like, look, I got to
be covered, you got to cover me, you got to support me for the
work I'm about to do, but I'llkeep the price low because I'm
(01:19):
looking at the back end andwhat's happened is the back end
has been vanishing, but thefront end the prices, haven't
gone up, so that's squeezed thecreative market.
This story that I'm about totell you is what happened to an
artist's back end.
Chuggington had a back end andI did a back end deal.
(01:41):
I didn't know then that it wasthe end of deals like that and I
was lucky to catch one, buteverything was going to change.
The two producers that steppedoff the elevator were Sarah Ball
and Don Tote.
Sarah was a front-rankpreschool director who had done
Bob the Builder and this was hernew show, chuggington.
(02:02):
So it was pretty exciting tomeet her director, who had done
Bob the Builder and this was hernew show, chuggington.
So it was pretty exciting tomeet her and it was pretty
exciting to talk about this deal.
But when I signed the contractto produce the soundtracks for
the kids' show, the entireentertainment industry was about
to undergo a disruption thatwould destroy the rights of
artists.
We'd worked years, decades, toachieve these rights and I just
(02:29):
never really understood whyartists became the low-hanging
fruit for Silicon Raiders.
I just don't understand it.
Maybe it's just that artistswere easy pickings.
Maybe it's just as simple asthat.
Many people tell me to move on,surrender and get used to it,
(02:55):
deal with it, and I've had manypeople tell me it's opened a
world of creativity to all.
Like high-end work was someelite group hidden behind walls
that masses could not breach?
And now we have opened thegates with these new tools and
these new deals, this new dealstructure that was given to us.
(03:17):
We didn't ask for it, it wasimposed on us and this is
supposed to have made the worlda better place.
I am not so sure that's true.
It's certainly not true forworking creatives but, more
importantly, I don't think it'strue for creativity, and that's
a big problem.
It kind of is about juststuffing massive amounts of cash
(03:40):
and using our work of cash, andusing our work and by our I
mean every citizen on the planetto charge a gusher of wealth
into a fabled gated community ontop of the mountain.
The fantasy the walls can nowbe breached is the opposite of
(04:00):
the truth.
The walls are now higher thanever.
It's almost impossible to makea living unless you're on the
inside of the Silicon ValleyMonetary Trust Fund, which seems
to be in the pockets of about10 people.
So we're all out here Funny,it's like a plantation economy
(04:23):
and we're the field hands andthey live in the big house.
That's the way it feels to thisworking creative who's been
doing this for three or fourdecades.
Why, why?
I can't get over that question.
Why, why?
Was this the only way to makethe world go forward by taking
rights from artists, changingour work and just dismissing us
(04:47):
as unimportant?
I don't know.
I really just don't know.
It's free-for-all content,creative-free and used to make
money for the anointed class,elite class.
That's the way it feels.
I'm talking about the way itfeels.
And the question is now how doartists make money?
How does it happen If thelandscape has changed?
(05:11):
One thing has not Great art israre and valuable and it belongs
to the artist.
Great art is not a training tool, it's not a commodity.
That's kind of heresy, right?
It's like I'm standing up inchurch and saying I don't
believe in God.
Art is not a commodity.
(05:32):
Not great art, not true art.
It's not a commodity.
It may become a commodity.
Van Gogh's paintings may tradeand sell for more than they were
ever worth when the artistcreated them.
That's different.
I'm talking about creating art.
You can't create art if it's inyour mind that you're being
(05:52):
part of a commodificationprocess.
It just will not work.
The artist needs to be overhere in a bubble, left alone to
create their art.
That's the way you get thegreat art.
You can't go and just hire anartist and say create me great
art.
It just doesn't work that way.
(06:15):
Ai, which is sort of on thescene now and is causing massive
disruptions.
Ai feeds on the past but artfeeds on the future.
Ai feeds on the past but artfeeds on the future.
Do you see what I mean?
(06:35):
Without new art, ai is just asnake eating its tail.
Eventually it will justcollapse in on itself.
So we have to look at that andsay how are we going to deal
with this, unless it's just youknow what we have, what we have
and we're not going to goanywhere new?
There's been so manydiscussions I was reading them
this morning about this problem.
(06:55):
Somebody called it mad cowdisease, mad chat disease,
because the AI is just feedingon old AI and filling up the
internet with AI reflections andit just ends up reflecting
itself.
It doesn't have any new to it.
(07:18):
I mean that's the biggestproblem we have with this.
We need new and to get new weneed to support the artists In
the entertainment industry.
Back-end revenue, the residualearnings from syndication, dvd
sales, internationaldistribution once provided a
reliable source of income forcreators and actors and
(07:40):
production teams.
However, the streaming era hasfundamentally altered this
landscape.
Platforms like Netflix, hulu,disney Plus have shifted the
business model from traditionalback-end deals to flat-front
payments.
Look, if I was going to make amillion dollars in residuals and
(08:02):
now they're going to pay me amillion dollars up front, we
wouldn't be having thisdiscussion.
What's happening is there is noback end and they're paying me
my old fee up front, which wasnegotiated and put together with
back end vision in mind.
So the prices have shrunk and Ihave to take on more as a
(08:23):
producer, as an artist, than Idid before.
I'm responsible for the wholefront end and I've got to
squeeze that whole front endfrom these lower fees with no
return.
There's ways out of this andwe're going to talk about that
right now.
I mean, you have to ask yourselfif they can't afford to pay for
the content that drives theirprofit.
(08:43):
So if they can't afford to payfor the content that drives
their profit, is it becauseglobal accounting is too complex
or nobody is watching?
You know, I just I just don'tget it.
I mean, when it comes down toNetflix, nobody's watching
Netflix because the executivesthat run Netflix are are running
Netflix.
You know it's like let me tunein to see what this executive is
(09:06):
doing.
They're watching Netflixbecause of the working artists
that have given them the content.
This deal was a good deal.
It was good for the executivesand it was good for the artists.
The new deal it's good for theexecutives and it really sucks
for the artists.
The seismic shift has madepursuing back-end revenue more
(09:27):
elusive than ever, while themodel of getting paid once and
hoping for residuals over theyears has faded.
You must ask are there newopportunities here?
Are there new strategies tocreate a back-end in the new
entertainment market?
That's the question.
That's what I'm looking attoday.
So what is causing thisentertainment shift?
(09:58):
Several things.
First, there's streaming oversyndication.
Traditional syndication models,where shows were sold to
networks globally, generatinglong-term revenue, have largely
been replaced by streaming deals.
These are often structured asflat rates, like we talked about
(10:18):
, with no ongoing financialbenefits.
There's no benefits as thecontent gets more views or is
licensed internationally.
There's just no back end.
Another is this is reallyinteresting the shorter
lifespans of content.
Our global ADD doesn't help.
(10:39):
Content cycles are shorter thanthey used to be In the past, a
hit TV show might have enjoyedyears of syndication or DVD
sales, but today content has afaster turnover on streaming
platform.
I mean, it's incredible.
You can go and do an epicfantasy 10 episodes, you know an
(11:00):
hour each, and once you'rethrough it it's like it's done.
People don't even rerun it,unless you're like me and you
watch everything 10 times.
But they just are hungry forcontent.
We need more content and yetthey don't want to pay for it.
I don't know the way out of this.
Globalization has not helped,with streaming services
(11:21):
distributing contentinternationally.
From the get-up, thetraditional aftermarket revenue
from foreign distributions hasdiminished.
Algorithm-drivendiscoverability streaming
platforms rely on algorithms topush new content to viewers,
meaning older content doesn'tbenefit from reruns or
(11:42):
resurgence in popularity like itonce did.
I think as we get deeper intothat, that's going to be a
little less true.
I think older content,evergreen content, game of
Thrones content will be watchedagain and again and again.
However, there is no benefit forthe performers and the writers
and the directors when thathappens, the producers.
(12:04):
There's no large benefit.
We're fighting for it, but sofar we haven't been that
successful.
So are there new back-endopportunities?
Yeah, I think there are, andfinding them is the whole game,
and it's probably a moreinteresting part of what I'm
(12:24):
talking about today.
And number one, something thatwe've been working on here at
the studio is ownership ofintellectual property.
Creators, who own their contenttheir TV series or film or
(12:47):
music podcast have more controlover licensing deals and
distributions.
Negotiating to retain IP rightscan lead to long-term earnings
through merchandisingadaptations, future distribution
deals.
Don't sell the farm.
That's what I say to young,up-and-coming artists.
(13:07):
Don't sell the farm, just buymore feed and seed the field.
Set up shop.
Don't sell Grow.
I think that that's key to whatwe're looking at here.
You can also diversify platforms.
It used to be you did a dealwith Disney and Disney delivered
(13:29):
the eyeballs.
Disney delivered all theeyeballs, or TV's or CBS, but
that's not the case anymore.
That's probably the singlebiggest change.
It's the audience that drivesthe market.
Now more than ever, they arelike a horde of wandering
(13:49):
eyeballs wandering the digitalmedia scape and deciding what to
watch.
It's as likely as to be TikTokas NBC.
Rather than depending solely onone distributor, creators can
distribute content acrossmultiple platforms Netflix, hulu
, disney+, yes, amazon, prime,video, shure, hbo, max, apple,
(14:10):
itunes, but also Google Play,vimeo, youtube, apple Podcasts,
spotify, crackle Shutter, evenPatreon you get the idea.
I've got a list that's a milelong of places that you can
distribute your beautiful show.
As long as you own it, you canmake the deals and just put it
(14:35):
out there until you find whereit needs to be, until the
audience finds you, until theright quorum of eyeballs show up
and go like, hey, I like thisshow.
Then there's direct fanengagement.
I mean, I've always been aboutdirect fan engagement.
(14:55):
When I was young and I had rockand roll bands, the whole goal
in those days was to get a lineoutside the club.
If you could get a line outsidethe club on the night you were
playing, that was like yes, thatwas like your KPI, your key
performance indicator.
Hey, there's 100 people outsidethe club.
That was cool, you were makingit.
(15:16):
Things haven't changed that much.
We can now directly engage withthe fans and I call it the
line-out-the-door theory.
It's as old as the hills, butin 2024, it's on steroids.
You can build a communityglobally if you do it right.
With platforms like Facebook,instagram and TikTok, and then
even as a writer, substacksocial channels, live exclusives
(15:40):
, a million ways you can engagewith people directly and by
engaging them directly, say tothem this is what I'm doing, do
you like it?
Until they say like, yes, I dolike it.
It's sort of like live,interactive, immersive focus
groups, which used to be such aprocess but is now a daily event
(16:03):
that you can put into yourproduction schedule.
Of course, sponsorships andbrand partnerships this is all
still available, except thatit's available to the producers.
It used to be that people wouldbuy media plans from Disney.
They would have these big upfronts in New York and say this
is where we're going and thebrands would line up.
(16:23):
That still goes on and that'sstill big business.
None of this precludes, by theway, big business.
I know, in advertising they'vebeen talking about the death of
the 30-second TV commercial formass marketing forever, but it
hasn't died.
There's a lot of it.
You see it out there all thetime.
It's all over the place.
These things tend toaccommodate each other rather
than wipe each other out.
(16:43):
So sponsorship and brands forsure, the opportunities to
partnership with brands isstronger than ever.
Branded content, productplacement you can successfully
work outside of traditionalmodels, for sure, but be careful
, you can't compromise your workas an artist.
You just cannot.
(17:04):
You cannot tie chains aroundyour spirit, and some brands
will do that.
There are brands out there thatwill say, like we're sponsoring
you, go around your spirit.
And some brands will do that.
There are brands out there thatwill say, like we're sponsoring
you, go do your thing.
So you have to kind of pickyour spots.
You know what I mean.
I spent time in the video gameindustry, so I was introduced to
(17:30):
much of what I am going to talkabout now.
It's a cursed idea and whollymisrepresented and misunderstood
.
The value is still undetermined, but as an artist and someone
who signed an old schoolcontract that still pays the
rent today, I found a lot ofwhat I will talk about next
intriguing.
Let's just say that it'sintriguing.
(17:51):
It's also the Wild West andthere's a lot of pirates out
there or what do you calloutlaws out there, bandits out
there but it's intriguing.
There's something there andwhat I'm talking about is
talking about is blockchaintechnology used to benefit
artists?
There's been artists out therewho've been looking at this
(18:15):
pretty extensively and there's asense that it can work.
Problem is, right now it's alot of con, so you've got to be
really careful.
The rise of blockchaintechnology presents a new
frontier for back-end earnings.
So how does that work?
As a producer, I might attach asmart contract to my work to
(18:35):
offer solid returns to thecreatives who work on my project
.
Right?
What is a smart contract?
A smart contract is like thinkof it as a box and you put
little digital assets.
So Chill Blow does a voice on aproject and I give him a smart
contract which goes into the box.
Now, whatever happens to myproject, joe Blow's smart
(18:58):
contract is attached to it.
I could sell the project.
His contract stays attached toit.
It gets played in South Korea.
We learn about that because thesmart contract is in the project
.
I mean, it's kind of blows yourmind a little bit, right, I
mean it really does.
That means we have an efficientway of doing this.
Now, how do we pull it off withall the shenanigans being used
(19:21):
on blockchain?
I don't know.
I have a feeling that's asolution for the next generation
of producers, but the idea, theidea is probably the most
dynamic idea that's beenpresented to us as artists to
recover our back end, which hasgone missing in the hallways of
silicon valley.
All right, um, the contractsattached.
(19:45):
Let's call them digital assets.
I say digital assets, but what?
What I mean in plain English isthe music, the voices, the
actors, the performers, thesingers, the animators, the
scriptwriters, the copywriters,the directors.
The new digital contract, whichis a living contract, in that
as the creative grows, as theshow goes from audio drama to
(20:08):
animation, to video games, thecontract goes with it.
Use, which is what back-end isreally about.
Use how it's used, how manytimes it's used, is tracked in
pertuity precisely and paiddirectly to the artist.
Are you getting excited?
(20:30):
Because this actually excitesme.
If it doesn't excite you, Idon't blame you.
I'm kind of a geek for thiskind of stuff.
I know it's complicated tofollow, but how cool, how cool
would that be?
Most working artists work on theassumption they do not receive
100% of the royalty.
I mentioned the showChuggington.
I had an old school contractthat was signed in like 2007,
(20:52):
before YouTube was even a thing,and I've done really well with
it.
I mean, it's given me myresiduals every 13 weeks for
years, weeks for years, but I'vealways known I don't get 100%
of the royalty.
You know, because the reportingis a little slipshod,
especially when you have a hitlike that and it gets played in
100 countries.
It's like you know how manytimes have been played in South
(21:13):
Korea.
You know, finding that out isdifficult.
Some places like Germany do afantastic job of reporting and
my royalties from that countryshow it.
In the United States it's alittle wishy-washy, you know,
and my royalties show it.
So the understanding is maybeyou get 60, maybe 70, maybe, on
a good day, 80% of your royalty,but you're never getting 100%.
(21:35):
With what I'm talking about,blockchain technology, you're
going to get 100% of yourroyalty and that's probably why
it's going to be hard to put inplace.
I kind of wonder, because theperformance royalty societies,
they're interested in 100%accuracy.
I really do.
You have to wonder.
Blockchain is a way forward,but who can trust it?
(21:55):
I don't know.
But this is where it gets crazyand where I say don't sell your
IP, just don't sell it, don'tsell your IP.
I mean, think about it.
Iconic imagery, quotes orcharacters from your content can
(22:17):
be turned into products.
All right, from your IP you canget the products Lunchbox
bonanza kind of right.
Only you make the lunchboxesyourself and pocket the change.
License the IP.
You know that guy, mr Wonderful, on Shark Tank.
He's always saying license, Iwant a license, I want to be
involved in licensing deals.
He is so right about that.
(22:38):
He is so right about that.
Elements for games and apps andvirtual environments, the
metaverse.
The metaverse is sort of likecome and gone, it feels like.
But you know the ideas.
We're talking about the ideas.
These can help sustaincreativity long after the
initial release of thecreativity Element.
(22:59):
Licensing, asset licensing it'sthe new syndication in video
games.
They got this down.
They make as much money fromsales of the game as they do
from selling a little sword thatgives your character more power
.
In-game sales are worthbillions.
I wish I had some of thoseTuckington trains in my back
pocket.
To be honest with you, that showis a goldmine of untapped IP.
(23:22):
But the producers came fromanother generation and they've
just let it kind of sit there.
So you know you want to dosomething.
Call me I don't even know whoowns the show, but call me.
Okay, we have things likecrowdfunding.
That's pretty cool, rightAnother kind of line out the
door and audio Audio.
(23:42):
That's why I'm doing it atstudio jijiji.
We start with audio.
It's controlled budget, it'screatively flexible, it's ours.
I can do most of it right herein my studio, I mean it's
growing in popularity.
They provide creators withanother way to recycle and
(24:02):
monetize existing IP spinoffpodcasts, audio adaptations of
films or TV shows, even deepdives into the creative process,
like on AirGigi, you know,advertising subscription revenue
can follow.
This is good, artists, aboutwhat we can do in this
marketplace that we had no sayin and it's been handed to us.
(24:27):
But we're not going to start,we're not going to stop creating
our art.
I mean that's not going tohappen.
So how do we survive?
What's out there?
It's a new reality.
All right.
The entertainment industryconstantly evolves and the
flattening of the back-endrevenue streams has forced
artists to rethink theirbusiness models.
Our corporate overlords areeither clueless or unscrupulous
(24:51):
your choice, you decide whichway it is.
The new reality favors thehustler and, honestly, it's a
pain in the ass.
It's a pain in the ass.
I much preferred it before, whenI would work like a dog and I
would send it out and otherpeople had to promote it and
other people owned it.
But I would keep a piece.
You know, I'd keep a piece,which I would the writer's piece
(25:12):
usually, or maybe mechanicalrelatives, or maybe a piece of
the publishing we would do thesedeals and then someone else
would administer it and thechecks would come in the door
and I would just put them in mybank and I could focus on what I
do best, which is creating newprojects.
That's me.
That's what I do.
Nowadays.
You have to put on a lot ofhats and be a hustler.
That's the way it is, butthere's also some opportunities
(25:35):
in that, because creativity isnot just coming up with a cool
script or writing a cool song orediting a cool video.
Creativity is also can be howyou put the project together,
how the budget works, how themoney is raised and how the
money is spent.
If you put your keep yourcreative hat on all the time, it
(25:58):
can really help.
The world was a lot simpler.
Yes, in the old days when allyou had to do was get a pencil
and paper and send the resultsinto the wind and wait for the
windfall, there were some niceyears just doing that, but those
years are gone.
That does not mean there's noopportunities.
It actually means there is newopportunities.
(26:20):
That's essentially whatentrepreneurship is in the big
picture, and creativeentrepreneurship is what we're
talking about here.
So go out there, be open, takecontrol.
Do not sell your IP and lookfor opportunities to use it in
new and creative ways.
(26:40):
You start thinking like that.
You'll start thinking there'san amazing amount of
opportunities out there for us.
Good luck and thank you forlistening.
This is Air Dajiji.
We're on here every week andwe're talking about all things
about the business and practiceof creativity, and we're lining
up some guests so you won't haveto just listen to me talk all
(27:02):
the time, but we have someguests.
We're going to be revisitingall these topics with guests who
can give us new perspective onthese topics.
So subscribe wherever your earswander.
We're on Apple Podcasts, we'reon Spotify, we're on iHeartRadio
.
I have a soft spot in my heartfor iHeartRadio because I love
radio, so I'm very proud to bethere, and thanks once again for
(27:31):
listening.
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