Hollywood's dream factory becomes Madison Avenue's reality By Richard Morga

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Advertising is today where the old studio system was three decades ago. Some of its institutions may be on the verge of collapse, but the function itself is a far cry from extinction. And its illness, if it may be called that, is no more treatable than MGM’s was when forced to spin off its Loew’s theater chain.
Never mind that the “unbundling” of studios was caused by forces over which the system had no control. The government-decreed sale of movie houses, not to mention the emergence of that audience-devouring monster called television, would have unnerved even the healthiest of movie-making communities. What’s relevant is the effects. And, as author Diana Altman describes them in Hollywood East: Louis B. Mayer and the Origins of the Studio System, they were no different from those pervasive on Madison Avenue today.
“The victory of the Department of Justice and the independents,” Airman writes, “had disastrous effects on the film industry, which had been built on vertical integration, the spine of its self-confidence. Now the studios, with their huge overhead, could not be sure they had an outlet for their product, and the theater companies, with their huge overhead, could not be assured of a steady flow of quality merchandise.”
The chapter addressing the studios’ post-vertical condition, entitled “Coming Apart,” goes on to note: “All the major studios had to cut costs drastically. A picture a week was out of the question. Studios could no longer suppert a stable of stars and writers . . . . Small-scale pictures were eliminated, so new talent no longer had a training ground. Talent scouts could no longer promise a long-term contract to youngsters willing to study hard. Gone were the free dancing, singing and drama lessons.”
Sound familiar? That’s because we’re all steeped in movie lore. In one way or another, we all miss the Hollywood machinery that filled our days with entertainment and our dreams with stars, that made Shirley Temple the most popular person in the universe and sustained Rock Hudson as a matinee idol. But there’s something else as well. The thought of being “unbundled” beyond recognition resonates on Madison Avenue because it was so unthinkable only a few years ago.
Turns out that Hollywood had a similar sense of invincibility right up to its rehab. To quote movie historian David Shipman in his five-pound opus The Story of Cinema: “As profits began to waver and fall for the first time in its history, large-scale failure became a fact for the industry to ponder upon. An industry which had always thought in big terms now learned to suffer on an appropriately grand scale.”
It is here the comparison becomes most telling. Yes, the movie industry did suffer, and some of it still awaits a return to the golden age. But the real talent merely left the lot. Some writers took to the hills, others to the beach. Same with actors, directors, even set designers.
Only their agents kept track of where they were. “They’re the ones who know how to get in touch with us,” says Jess Korman, a J. Walter Thompson alum who, since the ’70s, has been dividing his time between Hollywood and Madison Avenue. “That’s why, when it’s time to assemble a team for a project, they wield so much power.”
Whereas the old studio could deal with specific departments, all housed under one roof, now it must deal with specific individuals, all represented by agents. It shouldn’t be a surprise, then, to find that Korman and others believe the parallel between ad agencies and the studio system is increasingly relevant in this era of corporate downsizing. A lot of talent has left the agency bullpen, and clients, as well as agencies, are summoning it back into the game.
Granted, no two agency organizations are alike, and not every shop is heading down the studio path. BBDO’s “lot” appears as powerful today, for instance, as it was in the real studios’ heyday. There’ll also be a continuing need for a number of global agencies, just as there’s a continuing role for studios in the area of international distribution.
But the splintering off of assignments–the fragmenting of disciplines that were once advertising’s exclusive domain–is as real as Creative Artists’ involvement with Coke. And the evidence is strong enough to suggest that advertising isn’t afflicted with a cold so much as it’s undergoing a Darwinian transformation.
But what about the quality of product? The ability of agencies to deliver the goods in their post-vertical world? Even here the old studio system shows the way. As Shipman concludes his chapter on the studios’ decline, “It may not, in fact, be evident that the demise of the studio system gave rise to better pictures.”
Copyright Adweek L.P. (1993)