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In Q4 2022, PARQOR will be focusing on four trends. This essay focuses on the theme, "Hollywood’s future lies in the creator economy, what happens next?"
I have been thinking about something I’m calling “The Linklater Problem”. I mentioned it in my recent Hollywood Breaks podcast interview: “one of the challenges for Hollywood is we’ve gone from the storytellers talking about the heroes or the characters in their neighborhood or being inspired them…. All those characters have a smartphone and a TikTok account in 2022. If you want to meet those characters, you don’t need Richard Linklater, you need a TikTok account and a little bit of know-how”.
I call it the “Linklater problem” because indie films director Richard Linklater based many of the characters in his movies on people he grew up with or who he knew in the creative community in Austin, TX. “Slacker” (1990) is about bohemians in Austin, TX. “Dazed and Confused” (1993) is a coming-of-age movie in Austin, TX based on people he grew up with (and some of whom later sued him for defamation, and lost). “Everybody Wants Some!!” (2016) is a teen comedy based on his experiences as a college baseball player at Sam Houston State University in Huntsville, TX.
And that’s only a small sampling of his movies, which are generally plotless and more conversation-based. Linklater’s characters are now all Zeitgeist-y famous: Matthew McConaughey’s Wooderson from Dazed, Ethan Hawke’s Jesse and Julie Delpy’s Celine from his “Before” trilogy, and Glen Powell’s Finnegan from “Everybody Wants Some!!”.
And, I think in 2022 the modern version of these characters would be active creators on social media, but especially the teenagers in “Dazed and Confused”. I don’t know if they would be among the 2MM or so creators in YouTube’s Partner Program or among TikTok’s paid creators. Odds are probably not.
The question at the end of 2022 is whether we still need an auteur like Richard Linklater to serve as the storytelling medium between us and them. Because teenagers now have agency and control over their own stories, and if/when they hit the right cultural moment on a platform, they will have the attention of millions of users, too.
I think the Linklater Problem is a powerful lens: it may be both the simplest and also most dynamic way to explain why the creator economy has been so disruptive to Hollywood, and why it is poised to be even more disruptive in 2023.
Key Takeaway
In the attention economy, there's no longer a line between us and the giant screen and these people we may never meet or encounter. The "universal" characters who might inspire a future Richard Linklater can now disintermediate the storyteller via YouTube and TikTok, and make money from it.
Total words: 2,700
Total time reading: 11 minutes
Blockbuster Video & Richard Linklater
Two months ago, I highlighted a quote from a recent book about Blockbuster Video,“Built to Fail” that attributed the video rental chain as the primary reason independent film directors like Linklater, Kevin Smith, Quentin Tarantino and Richard Rodriguez emerged to become mainstream successes:
The video rental industry also launched and funded an unprecedented independent film movement. Films that previously would have never been made found an enthusiastic audience in the video store. As Quentin Tarantino put it: “From 1988 to 1992, people [movie producers] were all of a sudden getting $800,000 or $1 million or $1.2 million to make their little genre movie.” Tarantino’s first film, Reservoir Dogs, was released in 1992 and is considered by many to be the best independent film ever made. It was produced on a shoestring budget for just $1.5 million and may have never been made without the built-in customer base provided by video rental stores.
As I wrote then, “The rental video market under Blockbuster changed the economics of movie productions because it:
generated more revenues for producers to fund more productions, and
aggregated the target audience at scale.”
The basics of the backstory to why Linklater’s Dazed and Confused emerged is that Linklater had had a cult hit in Slacker — made with a $23,000 budget and was nominated for the Grand Jury Prize - Dramatic at the Sundance Film Festival in 1991 — and after Jim Jacks, VP of production and acquisitions at Universal Pictures, fast-tracked the production of Dazed and Confused over 30 other titles. The budget was $6.9MM but it ended up being distributed as an arthouse movie, as Linklater told Melissa Maerz in “Alright, Alright, Alright: The Oral History of Richard Linklater's Dazed and Confused”:
“At some point, Universal decided to release Dazed as a much smaller thing. They had formed a company called Gramercy Pictures to do specialty films. So I went through the whole studio experience, and then I got the specialty film release. Which sucked, because it’s the worst of both worlds.”
Gramercy was a joint venture between PolyGram Films and Universal. Maertz describes how it found viral success:
In 1993, the film got a small initial release and made a modest $8 million at the box office. It might’ve seemed like it was destined to disappear forever. But according to Gramercy [Pictures]’ research, the movie tested really well with young men in college, or younger, and, luckily, many of the theaters where it did play were in college towns. By the time Dazed came out on video in March 1994, young people were renting the movie over and over again, often with George Washington’s favorite herb at their side.
There was basically a “but for Blockbuster” impact on the movie’s success: word-of-mouth intrigued renters, who could then rent the video at 3,600 Blockbuster stores across the U.S.
Linklater’s next movie was “Before Sunrise”, distributed by Columbia Pictures at a smaller budget of $2.5MM, and it grossed $22.5MM at the box office.
RIP Blockbuster
This brief history of Dazed and Confused helps to highlight Blockbuster’s importance to:
The economics of the distribution model, and
The universality of Linklater's characters from the movie.
The economics
There are no public figures on what Dazed and Confused actually grossed in rentals, but the model was simple: Blockbuster would buy copies of the movie for its stores at $65. So assuming Blockbuster bought one for each store in 1993, Universal grossed $234,000 on additional sales of the video to rental stores or about 3% additional gross to box off. Once the movie went viral, Blockbuster would need more copies. So Universal could have easily doubled or tripled that order in 1993 and after (also, Blockbuster bought replacement VHS for tapes that broke or were overused).
For Universal, it was all upside. Even if it did not lead to Universal distributing Before Sunrise, the success of Dazed and Confused as a cult hit meant that Blockbuster created marginal revenues at scale which had not existed before. And those revenues went back into the producers’ pockets where they then invested in additional movies for Universal to produce and distribute.
There was no algorithm that told Universal to fast-track Dazed and Confused and there was no algorithm in-between Linklater and his newfound Blockbuster rental audiences. Word-of-mouth drove audience discovery less so in theaters, and more so at Blockbuster Videos.
In short, it all played out as “magic” (as I wrote about last week).
Linklater & Wooderson
The odd were that Linklater should have been in a career purgatory after Dazed and Confused disappointed at the box office. It’s the concept of a “sophomore jinx” where an artist can’t replicate the success of their debut. Dazed and Confused started that way in theaters and has since found cult success largely because of Blockbuster but later Netflix DVD rentals and streaming. Maertz writes:
Over the years, any time someone from Dazed got cast in a big movie or won an award, it generated a round of press mentions and a new wave of interest in the actor’s early work. In 1996, A Time to Kill boosted the profiles of Matthew McConaughey and his co-star Nicky Katt, regenerating interest in Dazed. So did 2012’s Argo, which reunited director Ben Affleck with actor Rory Cochrane and won an Oscar for Best Picture. In 2020, when Renée Zellweger won an Oscar for her role in the Judy Garland biopic Judy, journalists were still asking her questions about Dazed—which is ironic, since she is barely in the movie.
There is an important nuance here: the actors are forever associated with the movie and their characters in the movie. But the characters were universal, as Maertz writes: “Linklater focused not on the things that alienate teenagers but on the qualities that quietly unify them: boredom, horniness, a lack of power, fear of rejection, and the endless optimism that, once night falls, something cool might happen.”
Matthew McConaughey as Wooderson emerged as the movie’s “single most memorable personality”. Linklater recalls McConaughey telling him, “I ain’t this guy, but I know this guy”, and that guy was his brother Pat. Maertz has a number of stories about Pat (the book is an oral history), but the key thing is all the personality quirks of McConaughey’s Wooderson were Pat and those quirks had a universality to them, as McConaughey told Maertz: "He had that great part down the middle, throw his hair back—man, cock of the walk! Shoulders back, kinda leaned back a little bit, the pelvis pushed forward, preceding the chest and the head."
Linklater didn’t write Wooderson the way that McConaughey portrayed him. That was improvised.
As for the rest of the characters, Maertz writes:
“When Dazed opened in Huntsville, some of Linklater’s former classmates didn’t know what to think. Many of them had lost touch with him by then. Many had no idea he was making a film set in their hometown. Even the people who’d been closest to Linklater were surprised by the characters and events they recognized in the film. He’d played around with identifying details and phrases they’d used in everyday conversations. He had used real names. The director wasn’t making one-to-one comparisons between his classmates and fictional characters—like most fictional characters, they were composites of people he knew and things he’d made up—but he’d used their collective experience to make a movie that would be seen by people who’d never been to Huntsville and didn’t know what it was like to grow up there.”
Neither Pat McConaughey nor anybody in Huntsville, TX had sought to tell their stories onscreen, and there was no social media, then. It was only Linklater, who based the characters Mitch (played by Wiley Wiggins) and Randy “Pink” Floyd (played by Jason London) on himself and his memories from growing up in Huntsville.
Teens & Agency
In 2022, the universal story Linklater told — “boredom, horniness, a lack of power, fear of rejection, and the endless optimism that, once night falls, something cool might happen” — is now told by teenagers through social media.
And, the 2022 versions of every character in Dazed and Confused now have agency to tell their own stories about boredom, horniness, a lack of power, and fear of rejection. Platforms like TikTok and YouTube are now where “something cool might happen”.
95% of teens use YouTube and 67% use TikTok, according to Pew’s Teens, Social Media and Technology 2022, so today, odds are 67% of teens in Huntsville, TX use the app and 95% of them use YouTube. A quote from a recent piece from The Verge on Meta’s struggles highlights The “magic” of TikTok’s algorithm is that it guesses “what you like based on your passive viewing habits, injecting a never-ending fire hose of short videos into peoples’ screens. By removing the need to follow accounts before you see interesting videos, TikTok also leveled the playing field for creators, giving them a way to go viral overnight without a large following.”
YouTube Shorts may also be a place where their stories get told (there are 1.5B users of YouTube Shorts, and 1B users of TikTok worldwide). Instagram (62%) and Snapchat (59%) are in the mix, too, but YouTube and TikTok dominate.
The Algorithm as Auteur
The point of The Linklater Problem is not that every story Hollywood and/or indie directors could tell in the 1990s is now told on TikTok or YouTube. Nor is it that these stories, when told, are replacements for Hollywood movies. Rather, in the attention economy, Hollywood-produced movies compete with TikTok and YouTube videos, and lately YouTube has been winning on TV screens, according to Nielsen’s The Gauge (8.5% of streaming usage in October 2022).
Algorithms now surface and curate the stories of the "universal" characters” who inspired Linklater. The characters have agency and no longer need the screenplay, the director, or the production to find an audience.
I told the Hollywood Breaks podcast that The Linklater Problem “eats away the concept of creativity that we value so much, our dreams on the big screen and living our lives through these other characters who we've never met. And of living vicariously through them like that's no longer a luxury, there's no longer a line between us and the giant screen and these people we may never meet or encounter.”
The algorithm is now the auteur, and YouTube and TikTok encourage creators to work with each other. So, perhaps we may never get the group dynamics of seniors hazing freshman students by dumping rounds of flour, syrup, ketchup, and vegetable oil all over them (a scene to which Maertz devotes an entire chapter), but we will see high school girls collaborating in makeup videos across their channels.
That scene — where Parker Posey and Joey Lauren Adams play snarky, mean girls with “the perfect middle ground between likable and sinister” — reflects an importance weakness in The Linklater Problem: beyond Jimmy Donaldson aka MrBeast, few cinematic storytellers are using Hollywood production-style storytelling for content on YouTube. Whereas a beauty tips video with two friends does not tell a cohesive story about the dynamics of sorority among high school girls in Huntsville, TX.
A business model weakness
This brings us back to the economics of The Linklater Problem: the economics and marketplace dynamics that made Linklater’s career possible are not the same anymore under streaming. Independent films are still being produced, but Netflix and streaming services have replaced Blockbuster as secondary distribution channels, and the economics have changed. An independent movie that goes viral on Netflix or a first-party streamer won’t deliver the same returns to a production company the same way that sales of a $65 VHS did.
An independent film licensed for streaming will get a license fee for a period of time (one to two years) in exchange for unlimited plays. So an independent film like Dazed and Confused that performs poorly at the box office has little to no chance for financial redemption in streaming, even if it succeeds there (NOTE: video-on-demand rentals are a stagnant $1B market in the U.S.).
In other words, the economics for the characters to tell their stories on social media are better than the economics for an aspiring Richard Linklater. The beauty is that characters now have agency and are in charge of their own stories now. The tragedy is that there are fewer and fewer economic incentives for someone to imagine their collective stories as a part of an allegory of universal themes and told with cinematic visuals.
This would suggest the economics of streaming are hurting Hollywood (a dynamic former WarnerMedia CEO Jason Kilar analyzed and prescribed a solution to in The Wall Street Journal yesterday) because they incentivize the stories of individuals to be told in short clips and first-person videos on YouTube and TikTok, where they can get more engagement and more attention than an independent film.
Dazed and Confused was written 15 years after Linklater had graduated from high school. So, perhaps the lesson of The Linklater problem is that we may have another 15 years before Hollywood figures out another Blockbuster-like business model that makes a movie like Dazed and Confused possible. As of now, a Richard Linklater emerging seems less and less possible, despite the hundreds of billions being spent on content (Ampere Analysis projects total global content investment will exceed $230 billion). It's more likely that a portfolio of YouTube channels will accomplish the same outcome, and reward the characters themselves.