October 23, 2000

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Hollywood: The IT Transformation Is In Progress

By Jeff Sweat

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s the man behind special-effects wonders such as Batman and Sleepy Hollow, producer Peter Guber knows a thing or two about what technology can do on the big screen. But as the chairman of Mandalay Entertainment Inc., a movie and television production company, Guber has even more to say about the hardware and software that's needed to run Hollywood behind the scenes. InformationWeek senior editor Jeff Sweat recently talked to Guber about everything from the Internet to creativity.

InformationWeek: What kinds of technology have the potential to transform Hollywood?

Guber: There's a large segment of people in the entertainment business who believe that systemization through information technology can organize the decision-making process in a more formidable and effective way, and I think that's true. Maybe it's looking at where movies and television can control budgets, can manage inventory, can license products, can look at the predictability of costs vs. success. I'm not talking about technology in terms of physical filmmaking, or digital filmmaking, which is obvious. I'm talking about how information is utilized in terms of the business-creative process.

Unless we're careful, though, the business of decision-making in a creative environment could be commoditized. The difficulty is that the computer then can make the decision as to which song to sing, which lyrics to make, which script to write, which director to hire, and which picture to make. And we know intuitively that's not correct.

InformationWeek: Can technology be used to shape the creative process, or is that creative process based too much on gut feelings?

Guber: For years, people wondered whether they could create an equation that would determine which movie or television show or music to write, or where the fattest part of the demand curve was. With information technology, you can recognize where the audience is by looking at the information about where they were. But it's tougher to figure where the audience will be.

The conundrum is that you can't quantify everything, and if you quantify all the parts of it and then look only at the parts you quantify, you leave the magic out of the equation. The alchemy is in the combination of the two.

InformationWeek: Hollywood has been captivated by the possibilities of the Internet, but there's also been a lot of failures there. What, if anything, is the role of the Internet in Hollywood?

Guber: It has the ability to change the landscape radically. You can't have a fortress attitude. If you don't deal with it, it will run you over. You have to look at information technology such as the Internet, for example, and say to yourself, "This is one of the most efficient commodities of all time." It collapses the distance between the Eureka of the artist and the Wow of the audience. And in that lies the problem and the opportunity.

You see these [new media] companies going bankrupt. But what's going on underneath is a bad business plan. There's reason to believe this isn't the end of this [Internet business]. This isn't even the end of the beginning of this. This is the beginning of the beginning of this, and they just got in too early with the wrong plan and the wrong way.

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Illustration by Allen Crawford

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