Most people think it’s pretty random that I transitioned careers from entertainment to VC. [Prior to VC, I worked at a talent agency and then on digital strategy for a TV network.] But if you dig below the surface, there are actually a lot of parallels between the industries of entertainment and tech, and specifically between the roles of talent agents and VCs -- who have been influential behind-the-scenes in the making of the biggest films, TV shows, albums, and companies of our lifetimes.
If you're not familiar, talent agents represent a portfolio of talent - i.e. actors, directors, screenwriters, musicians, etc. - and navigate the industry on their clients' behalf to help them acquire new roles, projects, funding, etc. Sounds a lot like VC, right?
Essentially, these industries and the key players within them have played significant roles in shaping our culture to date, with agents and VCs initially sourcing and backing the biggest projects and people that have come to define us.
Recently, the similarities between these two worlds, entertainment and tech, have become undeniable. The lines between them are increasingly blurring, a trend that will become even more pronounced in the future as tech opens doors for new consumer habits and preferences to form.
To understand this increasing convergence and its impact on culture, let's take a look at the past, present, and future relationship between these two industries:
Past: Over the last 15 years, entertainment execs and VCs have learned from and shared best practices with each other, which has served both well.
The film industry has increasingly adopted a VC power law mindset.
Why were 18 of the top 20 most expensive movies ever made created after 2010? Looking beyond inflation, it’s because studios have started betting almost exclusively on global blockbusters rather than low and mid-budget films, in hopes of fewer home-runs delivering outsized returns. Studios have shifted focus primarily to big-budget films (which explains the many recent superhero movies), based on historic performance and franchise upsell opportunities (i.e. Marvel's Cinematic Universe). Similarly to Softbank Vision Fund's strategy, they flood these investments with capital to create a ‘money moat,’ with much of it going towards marketing to crowd out competition and drive up box office revenue.
VCs have taken learnings from talent agencies to attract top talent and best serve them.
Marc Andreessen and Ben Horowitz founded a16z with some guidance from their friend Michael Ovitz, the legendary talent agent who grew CAA into one of the top agencies. Ovitz showed them how to build a network-based firm, leveraging the power of a firm's collective skills and network to attract, retain, and support the best founders in the business. This led to a16z’s focus on delivering exceptional portfolio services, which has since been adopted broadly as a VC industry standard.
Present: Recently, we have seen a shift, as the entertainment and tech industries move beyond knowledge sharing to converge on a deeper level in response to the rise of the creator economy.
VCs and tech companies are becoming talent agents, investing in talent and creators.
VC firm Slow Ventures launched its $20M Creator Fund last year, because it sees “investing in creators as a natural extension of [its] seed investments over the last 10+ years.” Meanwhile, seemingly all of the big social media companies have launched creator funds to invest in the biggest talent on their platforms over the last year. This includes the TikTok Creator Fund, YouTube Shorts Fund, Facebook’s $1B creator program, and plenty of others.
Creators and agents are becoming VCs, investing in ideas and tech.
Over the last couple years, more talent has delved into VC with the launch of their own funds, including Ashton Kutcher's Sound Ventures, Jay-Z's Marcy Venture Partners, Serena Williams' Serena Ventures, Snoop Dogg's Casa Verde Capital, and social media stars Josh Richards, Griffin Johnson and Noah Beck’s Animal Capital, to name a few.
Traditional talent agencies have grown into media conglomerates, adapting to consumers' changing preferences.
Talent agencies have grown into media conglomerates, diversifying across a quickly changing entertainment and media landscape, as technology has redefined how and where consumers spend their time and the types of content that they consume. Among other expansion efforts, agencies have built out digital talent departments and brand partnership teams to best serve influencers and creators across new consumer tech platforms. Agencies have also grown their own corporate venture arms to tap into new media platforms and content early on, and to support their clients' increasing interests in launching their own businesses. CAA and NEA partnered to launch Connect Ventures in 2020 to invest in early stage commerce, content, and media, while Talent Ventures at Endeavor (WME's parent company) has helped clients like actress Shay Mitchell launch her Onda Sparkling Tequila brand.
Future: These industries and their business strategies will continue to merge, as tech and pop culture become one in the same for two interrelated reasons:
So, what's the point?
Big entertainment and tech companies (with agencies and VC firms as key movers and shakers) have been highly influential in shaping culture through film, TV, music, and social media until this point. They have served as important and necessary channels for the creation and distribution of content in the absence of technology and infrastructure that would enable the broader population to do so ourselves.
However, we are now reaching an inflection point. With new tools, platforms, and opportunities aiding and empowering creators, power is shifting to Citizen Creators to define and shape future culture. In response, agencies and VC firms are beginning to shift their business strategies (as I’ve noted above) as they aim to establish new footholds to continue influencing consumer behavior, preferences, and culture in a future that looks very different from today. Looking forward, I expect deeper collaboration and potential acquisitions between big entertainment and tech companies as they work even closer together to define what their joint role will be in the creator-led metaverse that we are entering.
While I do believe that agencies, VC firms, and other intermediaries (in addition to big entertainment and tech companies) will continue to exist because funding, connections, and experienced industry perspectives and insights will continue to be important and beneficial, I see the roles that they will play and the value that they will add changing in the future. Power dynamics will shift so that value is product or creation-driven and more power lies in the hands of creators. Those in ancillary roles like agents and VCs will become active participants rather than outside advisors, and they will need to roll up their sleeves and directly contribute to brand and company-building as insiders. We are already starting to see this play out as more VCs join DAOs and invest in communities’ successes with both capital and active participation as contributing members.
As an investor at the intersection of culture and tech, I'm very excited for what the future holds with creators and founders taking more of the reins as we enter this cultural renaissance! I'd love to connect with great founders and investors who are building and investing in this future. Shoot me a note at firstname.lastname@example.org & stay tuned for more from me on this topic soon!