Jeff Berg, head of one of Hollywood's top agencies, explains why ICM is worth more than ten percent.
Jeff Berg is head of the giant Hollywood talent and literary agency International Creative Management (ICM), which represents some 2,500 writers, directors, and actors. Tall and surprisingly un-Hollywood in manner, the 46-year-old Berg nonetheless displays the confident disposition of a man who, amid the current industrywide scramble for content, feels he just may be sitting in the catbird seat.
WIRED:
Why the frenzy over Paramount?
Berg:
Because it's the last of the major studios that has a full catalog of value in a number of areas. And if you look at the arc of its corporate earnings over the last fifteen years, it seems to be at its apogee of sale right now.
WIRED:
But isn't it more than that? I mean, the media portrays the Paramount bidding war as some sort of decisive battle for control of content. Which seems strange, because even though Paramount owns Simon & Schuster, for example, anyone who wants to make a movie or a multimedia title from one of those books has still got to option it or buy it.
Berg:
Right, Paramount has no control over the authors.
WIRED:
So then what's missing in all this talk about content?
Berg:
I think it's that content, finally, is talent. It's individual writers, actors, producers, directors. They're the ones at the top of the value chain because they're the creators. So anyone who wants to fill their 500 channels will ultimately have to come to us.
WIRED:
And when they do, of course, your clients will be well paid. But what about content creators in Silicon Valley?
Berg:
My hunch is that the representation of game creators and multimedia authors is probably as primitive as it was for movie makers and writers in the '20s in Los Angeles, working [under contract] for the big studios. They aren't compensated in terms of fixed income or residual income the way their colleagues in the motion picture and television business are. Which is odd, considering that the game business is not a nascent economy. I mean, Sega and Nintendo last year outgrossed the whole motion picture industry. It's a full-blown market, generating billions of dollars in sales.
WIRED:
So are agencies like ICM going to start representing these people, maybe shake up the Silicon Valley status quo a little? Should we expect to see top game designers and multimedia authors starting to get six-figure, first-look deals - maybe even a percentage of the gross - from Sega or Nintendo or Apple anytime soon?
Berg:
Why not? I think it's entirely possible. As an agency, representing people in software development is just a logical extension of the work we already do. I think a couple of years ago our agency was more singular in its focus. We basically covered the motion picture studios and the networks. I'm only talking about the audio-visual world - not what we do in music or publishing. But we dealt with NBC, CBS, and ABC and the five or six major studios. Now, we continue to do that today, but we also cover all of the cable channels. And we find ourselves dealing with hardware and software developers. We're dealing with companies like Star TV and BSkyB, and our market right now is really much more of a global market, not just one focused on the United States and Canada. So as a result we've had to develop resources within the agency that can service those new buyers.
WIRED:
It seems like there's the potential for a strong creative fit between Hollywood and Silicon Valley.
Berg:
Yeah, and I'll tell you why. The missing link in some of the games right now is the whole area of character development and narrative plot. Software developers may be able to provide you with the most fantastic graphics, but finally you need a story. You need characters, you need a conceptual framework, and you need a theme. So far these aspects of software grammar haven't entered into the process much. But I think certain companies are realizing that they could draw upon the talent pool of those folks who do create movies and television shows and bring their skills into the interactive software network.
WIRED:
So, you're starting to get some inquiries?
Berg:
Well, more than inquiries. We're starting to do some deals, yeah. And when you think about it, it makes sense. I mean, what's the most successful noncharacter game? Tetris, probably, right? Well, what if you had a game with the addictive nature of Tetris together with strong character development and a compelling plot? What would happen if you backed up all these terrifically visual games with great themes and great characters? You'd be in a whole other stratosphere. And that's the challenge for both of our industries in working together... [Berg pauses a moment, glancing over at the PowerBook sitting nearby on his desk.]
Okay, wait...I'm just looking at America Online...there's a new QVC bid for Paramount.
[He starts reading aloud the news report.]
"QVC announced today it is taking its hostile US$9.7 billion bid for Paramount directly to the shareholders by launching a tender offer."
WIRED:
That's a lot of money. I mean, with $10 billion, why couldn't someone just...
Berg:
Build their own studio? Yes, well, why not? People miss the point if they think Paramount is the only question in the so-called battle for content. A more interesting question is, how soon before the MSOs (multiservice operators) and the RBOCs (regional Bell operating companies) start making their own movies?
WIRED:
Telephone companies making movies?
Berg:
Why not? They have a pretty good network don't they? They have tremendous capital. They're already participating in the financing of films through investments. There's no law that says studios are the only institutions that can finance or produce motion pictures. It's just that until now they've been the only ones with the institutional capability to do it efficiently. But anything's possible - Turner and HBO certainly learned how to make their own movies.
WIRED:
So, might phone companies one day start coming directly to ICM for stars or scripts or movie-making expertise?
Berg:
[Smiles] Maybe some of them already are.
WIRED:
Would you care to be more specific?
Berg:
Not really...I can't. We're in the middle of things right now that are highly proprietary. Let's just say that we have found ourselves in discussions with phone companies about content.
WIRED:
An agency like yours would seem to be extremely well positioned. Everyone's scrambling for content, and content is all about...
Berg:
Talent. Content is talent - delivered in digitized form. So whether a new studio is formed, or the regional Bells and the MSOs start making movies, or it's a fifth television network, DBS, Hughes Satellite, online networks, CD-ROM, 16- and 32- and 64-bit game platforms - it's fine with me. We're in favor of all of it. We want to sell to everyone.
