October 11, 2015

Why “Gatekeepers” Need to be Kept Honest

This has been a most interesting week for me, especially the first two days I spent in Los Angeles with my older son in meetings relating to three investments in performing arts projects: a small commercial independent film called Fog Warning, (a trailer is viewable on YouTube), a reality TV production company called LongStoryShort Productions, and a film script on which my son Mike and I are working together. From these meetings on all three investments, as well as other conversations I have had with many people in the performing arts business, I have learned about the challenges artists have with agents, distributors, or other intermediaries.

In the recording industry, the intermediary is the record label. In movies, screenwriters have to approach producers through agents, and film producers have to reach the marketplace through sales agents or distributors. TV producers have to go through agents to reach TV networks and other content buyers. This is similar to what I experienced and saw in the broader business world: there are always gatekeepers between product and service producers and the end customer.

What is great about the Internet is how it has the potential to give those who want to reach a customer the ability to bypass intermediaries and create a better balance of power with those intermediaries. I love the fact that Paranormal Activity, a movie produced for $15,000, which used predominantly low-cost direct marketing channels, including social media, has grossed over $100 million since its release. Too many intermediaries would be threatened if that became the norm on how to get a movie to the public.

Related to this, I was so happy when my younger son became a very capable online seller during his senior year of high school, and my daughter learned about to get harp performing engagements directly without needing a booking agent.

I believe strongly that we will see far more prosperity and a more equal distribution of income and wealth if individuals have the skills to sell their products, services, and labor directly to those who need them. Intermediaries can serve a very valuable role, and many are essential to the people they serve. However, just like any monopoly situation, when they have sole or primary access to the end customer, they can get complacent and not do the best possible for the seller. That’s why I like the potential direct marketing opportunities the Internet provides. It gives any seller, including me, the ability to say to an intermediary: “Either be as passionate and single-minded about what I am selling as I am, or get out of the way.”