Agencies and Online “Packaging”
May 22nd, 2008 by Alec McNayrPosted in Business |“Packaging is the lifeblood of any agency.”
Or so I’ve been told. The typical agency setup is for an agent to receive a measly 10% of an actor or writer’s salary. But when an agency sells a “package” to a network, or any distributor for that matter, they will take a smaller percentage (let’s say 2% or 3%) of a much larger pie: the overall production budget. Getting a stake in ownership makes millions.
This model works with TV networks, but with an online model, the distributors are too diverse, and the budgets are far too small. 10% of even a $50,000 deal is probably not worth it.
So, the biggest agencies are now partnering with established brandsmen to start new media ad companies. They are buying into a bigger model, and hopefully the conglomeration of many projects will get them not only the talent fees, but overall profits as well. “Packaging” lives on!
Read on at the LA Times: William Morris and Friends Start Agency 3.0 (Really? 3.0?)
“Other talent agencies have taken different tacks when it comes to new media. Creative Artists Agency joined with Sequoia Capital to back Will Ferrell’s online entertainment site, Funny or Die. And advertising agency Spot Runner and United Talent Agency helped start 60Frames Entertainment, which creates short-form online content.”
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