In Part Three of our Four-Part Series on New Hollywood we show how Agile Principles can be harnessed to create a virtuous feedback loop with audiences and why Hollywood’s antiquated Waterfall workflow doesn’t work in a game engine world.
“Listen to the technology and find out what it is telling you.”
Carver Mead, chip design pioneer
Old Hollywood: Chasing Waterfalls
In the middle of the Second Industrial Revolution (1870 - 1914), audiences across Europe and America were entranced by a small science fiction short film created by George Méliès in 1902 called Le Voyage dans la Lune (A Trip to the Moon). It was the first-ever film to use visual and special effects, and it was a sensation.
A Trip to the Moon helped pave the way for the first-ever narrative film, Edwin S. Porter’s The Great Train Robbery, in 1903. These back-to-back firsts allowed filmmakers to fuse visual and special effects with narrative filmmaking, giving birth to an industry called Hollywood.
Meanwhile, in Baltimore, Maryland, Henry Gantt was dreaming of more earthly pursuits: production management. In the decade before WWI, Henry developed his famous namesake, Gantt charts (see example below). These tools were inspired bar-like charts that helped myriad project managers in various industries schedule, plan, and prioritize activities and costs over time. Gantt’s charts represented a giant leap forward in planning workflows for an industrializing world built around manufacturing.
One of the industries to take advantage of this tool was fledgling Hollywood. Even in the software used today on Hollywood productions (see example below), we see versions of Gantt’s charts used.
The early Hollywood studios that began to pop up around this time even resembled manufacturers (to a degree), churning out slates of films every year, especially during Hollywood’s Golden Age. But as the VFX technology used to create content changed from analog to digital in the 1980s, the underlying process for creating that content did not, and production costs began to explode. By the late 1980s, the average cost to release an MPAA-film (release cost = negative cost + p & a spend) outpaced the average domestic box office revenue a film generated (see graphic below).
Source: Entertainment Industry Economics, 9th Edition, by Harold L. Vogel
This was precisely the time when digital VFX-heavy films - such as James Cameron’s, The Abyss (1989) and Terminator 2: Judgement Day (1992) and Steven Spielberg’s, Jurassic Park (1993) - came into their own. In fact, production budgets continue to balloon as newer digital technologies like virtual production are shoehorned into Hollywood’s antiquated workflow.
In the software world, this workflow has a name, Waterfall. A Waterfall workflow (not to be confused with a Recoupment Waterfall) is a linear approach to project management, where stakeholder (stakeholders = management + customers) requirements are gathered upfront and then a sequential plan is created to accommodate those requirements. Additionally, each phase in the process is discrete, living separately from the other phases. And once the upfront requirements have been collected the customer ceases to play a role in the development of the product, which means value isn’t realized until the project is completed.
Hollywood’s own workflow is essentially a Waterfall, where key stakeholders are internal (i.e., creative executives) only. Customers (audiences) are removed from the production process entirely (focus groups are hired to watch private screenings but only after a film is completed). In other words, there are no external stakeholders who can provide crucial feedback on how a given project (film or TV show) is progressing during production. This is one of the main reasons Hollywood is a hit-driven industry: there is no feedback loop with customers/audiences during production. Therefore, value is realized only when a film or TV show is 100% completed. As such, the production process lives in a Black Box until exhibition. The result? A hit or a miss. We can see a stripped down version of a Hollywood Waterfall workflow in the graphic below. Notice how audiences are cut out of the production process (development, pre-production, photography, and post-production) entirely.
But in Hollywood, if you give Steven Spielberg and David Fincher the same script, the same stars, and the same tools you’ll still wind up with two completely different movies. The path from A leads, therefore, to multiple B’s.
This is because films and TV shows are knowledge-based bespoke creative projects not homogenous products. As such, content creation has more in common with bespoke software and game development than it does with car manufacturing. Therefore, in a digital platform world, Waterfall workflows actually hinder the opportunities game engines present when creating digital content.
New Hollywood: Playing Digital Rugby
Waterfall workflows are inherently process-driven: one person does X so that another person can do Y. This dynamic may sound familiar to those working on a Hollywood production, especially in the VFX industry. In the VFX realm, it’s routine during production for one person to hand a task off to another only to sit back and wait a week or more for that same task to be handed back for further refinements. It is no wonder that VFX is so expensive - a single VFX shot in a movie can take months with dozens if not hundreds of versions.
Agile, on the other hand, is a set of principles that improves processes. And the Agile workhorse used most often to improve processes is the Scrum framework. Named after the tight ball of players in rugby that work together to move the ball down the field, Scrum is an iterative framework that rewards a learn-by-doing mindset and is perfectly suited to complex projects like content creation and game development where the path from A to B is non-linear and littered with unknowns.
Scrum is designed for small cross-functional teams of ten or fewer members that work in one to four week “sprints” (two weeks is the norm). Each sprint is meant to further the ball down the field towards the ultimate goal (in Hollywood, that would be a completed film or season of a series). At the end of each sprint, an MVP, or “minimum viable product” (in Hollywood’s case, that would be some deployable amount of content) is produced and the Scrum team holds a Sprint Review to demonstrate the MVP to key stakeholders (i.e., creative executives).
Now, here’s the real advantage of working in Scrum teams to produce game engine-powered virtual production content: game engine-powered virtual production allows creatives to work in real-time, which means the pre- and post-production phases collapse altogether. “Reshoots” is just shooting, and there is no such thing as “fix-it-in-post” since there is no “post”, you just fix it on-the-fly. In other words, it’s now possible for all four Waterfall phases of production (development, pre-production, photography, and post-production) to merge into one iterative flow. The Scrum framework leverages this iterative, real-time workflow and allows for something truly transformative to occur in Hollywood: external stakeholders (audiences) can now become part of the content creation process.
This has huge ramifications. At the end of each sprint, studios can drop small deployable bits of content and cultivate a virtuous feedback loop with fans. These “content drops” (MVPs) can be distributed on any type of digital platform, including social media. The graphic below shows how sprints can be harnessed to create content using game engines and cultivate a (potentially monetizable) feedback loop with audiences.
We can clearly see the difference between Waterfall and Agile approaches in the two graphics below. In the Waterfall approach (top), you don’t move on until the previous phase has been completed (or almost completed). This is a horizontal development model. With game engines and Agile (bottom), all phases are worked simultaneously in a vertical development model.
Including the development process in an Agile workflow may set off alarm bells for those who rely on already completed scripts to project production costs and manage risk. However, technology lives within constraints. And while some constraints can’t be pushed (hard constraints), others can (soft constraints). When a script is completed in advance, VFX teams have to execute a story that is already baked. That means they often have to fruitlessly push against those hard constraints. This is one of the major inefficiencies that bloat budgets. Now imagine a world in which writers work on teams alongside CG Supervisors and Virtual Production Supervisors. The writers can now communicate with the technical side to avoid pushing against those immovable hard constraints in the first place.
However, this means that teams who work on Agile projects, must find alternative methods to project these costs. Whether that comes in the form of a script/pilot outline, or benchmarking against historical budgets from similar past projects needs to be fleshed-out but the reward in long-term efficiency will be well-worth the effort to suss out this new paradigm. What’s crucial to understand is that although a script is not needed to begin working in Agile, it is obviously desirable to know in detail where the story is going. Another possibility is to simply work within an existing budget, set cost constraints around a project, and let human ingenuity do the rest (this is similar to what Blumhouse does).
The Agile approach to content creation has several key benefits (see graphic below) over its Waterfall ancestor. Firstly, it increases audience value since fans are engaged almost immediately. Secondly, it decreases the risk of not delivering since content is delivered continuously throughout production. Thirdly, it significantly decreases the risk of failure since studios can create an audience/production feedback loop that harvests data prior to exhibition. This means a direct-to-consumer (DTC) relationship can be cultivated, which both decreases the risk of failure for that particular IP and increases brand equity for the content creator.
This last point is crucial. The fear among many creatives is that this feedback loop will stifle creativity. This is not the case. The feedback loop is not intended to execute what audiences think they want but to help creatives better navigate the balance between fulfilling and subverting audience expectations. This should be empowering to creatives not threatening.
Finally, Scrum increases speed-to-market and turnaround time (see graphic below) and drastically reduces overall production costs.
Agile can also be used in tandem with Lean production processes, such as the Kanban method, to create unique production frameworks. In fact, mixing and matching Kanban and Scrum frameworks is most likely the optimal path forward. This operational flexibility is at the core of Agile and leads to one of the most important takeaways for Hollywood as it navigates the platform/game engine world: increased efficiency and a steepened learning curve lead to operational/competitive advantages.
What’s important to understand here is that producers and studios that embrace Agile and Lean principles can create bespoke frameworks best suited to that specific project’s unique needs and requirements, ensuring the most efficient framework is used on a case-by-case basis and avoiding the one-size-fits-all Waterfall approach. In fact, it’s not even important to use terminology like “Scrum”, “Sprints”, and “Kanban”. What’s important is the mindset and principles.
A Few Final Thoughts
A Note of Caution For Hollywood:
Kodak invented the first handheld digital camera in 1975 yet failed to make the pivot to digital photography. How did this happen? The simple explanation is that the entrenched incentive structures aligned to support chemicals, film, and paper prevented Kodak from making the pivot. As a result, Sony, Nikon, and Canon paved the way while Kodak filed for bankruptcy in 2012.
Platforms and game engines have different underlying cadences, requirements, and incentive structures than does the legacy Hollywood model. Therefore, a strategic realignment toward these new underlying structures is required to successfully navigate the pivot to a decentralized platform world where the game and film worlds merge.
Think of it this way. Currently, Hollywood uses game engines primarily for previs, LED Wall shoots, and, on rare occasions, to produce a 100% virtual production project. This is akin to Ford adding an e-Mustang to its lineup. Conversely, studios of the future built from the ground-up around game engines and virtual production are like Tesla. Both are betting on the future but only one is all-in.
Cadences:
The creative and production sides of Hollywood have different cadences. For instance, the average time it takes to greenlight a project is often much slower than the pace of production. Much of this boils down, again, to risk (studios bear the brunt). However, when audiences become involved in the production process, the risk profile of that project changes considerably. This doesn’t mean risk is eliminated but building (and potentially monetizing) audience traction during production should encourage a better alignment between these two cadences, which drastically reduces overall risk and the time needed to greenlight. In a platform world, being nimble and efficient is a virtue (as unsexy as that may sound to Hollywood ears).
Content:
As we mentioned in Part One of our blog series, expansive and immersive fantasy worlds are the most valuable properties in media. Game engines and virtual production tools are, therefore, perfect world-building technologies to meet the demand for these stories in a platform world - and Agile is the key to linking the game and film worlds. Having common tech and a common pipeline/workflow is hugely beneficial to bridging the gap between the game and film worlds. However, that doesn’t mean all content should be created using Agile-driven, game engine-powered virtual production. Waterfall workflows work relatively well with analog filmmaking. Why use game engines to make a movie like Spotlight? It’s one thing to create out-of-focus desert vistas using game engines and LED Walls. Ask a VFX supervisor to create the photo-real indoor LED Wall backgrounds for Downton Abbey and they may kill you.
VFX Pipelines:
To be blunt, the VFX industry in Hollywood is a victim of Hollywood’s inefficiencies. This is not to cast blame, it’s simply a byproduct of the underlying fundamentals in the industry. But it does mean VFX companies create rigid pipelines to serve an inherently inefficient process. Additionally, proprietary software and hardware solutions are extremely expensive, can quickly become obsolete, and often hold no clear advantage. All this creates a misalignment between new technologies and old workflows, which drives up both production costs and risk.
And new tech is flooding the market at a remarkable rate due to a combination of increased competition and Moore’s Law in the game engine, software, GPU/CPU, and virtual production sectors - and that pace is only likely to accelerate in the years ahead. Therefore, locking into a traditional VFX pipeline in such a competitive environment may actually be a handicap. Instead, being nimble and agnostic towards new tech can lead to real advantages for content creators in the years ahead.
Putting It All Together
In The Birth of New Hollywood series, we:
Unpacked how platforms are reshaping the entertainment landscape.
Bridged the gap between the game and film worlds to reveal how game engine-powered virtual production can transform how value is delivered in a digital platform world.
Showed how Agile Principles can be harnessed to create a virtuous feedback loop with audiences and better align Hollywood with the game world.
This blog is meant to serve as a topical launching pad for the peer-driven, decentralized platform future ahead. Our hope is that this series presents one viable path forward for an industry in the midst of dramatic upheaval. Over the last decade, Old Hollywood has been so focused on the disruption happening to distribution (for good reason) that it hasn’t fully absorbed the even bigger disruption to follow: the democratization of world-class content itself.
The platformification of Hollywood is only the beginning. The barriers to entry that surround premium content creation in Hollywood are already being torn down. A complete shift in how we think about creating content is required to keep pace with the changes to come over the next decade.
Stories will become living breathing organisms, not one-off spectacles. Fans will no longer be relegated to the sidelines until exhibition. The game and film worlds will finally merge. Content will democratize.
In Part Four of our Four-Part Series on New Hollywood we reveal how web3 protocols - led by distributed ledger technology - when tethered to real-time technologies and workflows will upend the entire Hollywood studio value chain.