Paramount and the impending battle for technical talent

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Hello readers of the Series Businesssome of which may be from international holidays only to then be confronted with the gloomiest news cycle on the American political stage. There are far bigger things happening in the world than the intricacies of the television business, but the work (and your work) goes on, and we’re here to focus on that today.

It’s hard to believe that the Paramount-Skydance deal was announced just a week ago and the new Paramount Daddy David Ellison laid out a vision for the combined company that focused heavily on technology. “We need to transform New Paramount into a world-class media and technology company,” he said, adding that “it’s critical for Paramount to be able to build its technology prowess to be both a media and a technology company.”

What exactly he means by this is not yet entirely clear, but already an experienced media and tech executive tells me that Ellison’s pitch is “a bunch of nonsense,” something he only said to convince Shari Redstone to finally release the company from her family’s care. (Although Ellison spent a lifetime vicinity (This is different from, say, co-founding a $400 billion database and cloud computing company like his father.)

You can hardly blame Ellison. Netflix, for example, has a market cap of $283 billion and revenue of $33.7 billion in 2023, while Paramount had revenue of $29.7 billion last year and has a market cap of $8.1 billion. (Paramount, of course, lost $451 million in 2023, while Netflix generated operating income of nearly $7 billion.)

It’s not as if all established studios aren’t already investing in technical solutions and the people who implement them. To be an entertainment company in 2024 Is being a technology company. That has meant the influx of thousands upon thousands of software developers, engineers, data analysts, UX designers, and other technologists into old Hollywood over the past decade.

As I reported this spring, studying the Job offers at companies like Warner Bros. Discovery and Disney is quickly showing that technology jobs are in higher demand – far more than creative jobs – as the major corporations regroup for the next phase of the streaming war.

So when Ellison says he wants to improve Paramount+’s recommendation engine and advertising technology and lean on AI in the creative process (while saving $2 billion in costs), he will be entering an already very competitive field where studios are battling against giant tech companies venturing into the media space (Amazon, Apple) – as well as other tech companies and really every other company – for technical talent.

And the big question is whether Hollywood will be able to attract the talent it needs to stay competitive.

So what obstacles does not only Paramount, but all of traditional Hollywood, face in its technological reorientation?

“The real challenge, in my opinion, is that building a technology-based media company in the public spotlight is a very difficult task,” says Michael Doonanmanaging partner of executive search firm SPMB, which recruits senior executives at some of the biggest media and technology giants. “You can be a technology company that’s in the media space – Netflix, Amazon – and that’s different. But being a traditional media company, with a Wall Street analyst community that’s judging your profit and growth as a media company, and trying to turn that story into ‘we’re a technology company,’ that can be a very dangerous and challenging proposition.” (Anyone remember Adam Neumann trying to sell the idea of ​​a coworking space as a technology?)

Since Ellison has brought this topic into focus, let’s take a look at the battle for talent.

In this “Business” series you will learn:

• Four things studios can do to attract talent that tech companies usually can’t

• The challenges of compensation for established studios – and how they can overcome them

• What traditional entertainment companies need to do to compete for the talent of technology companies

• Salary comparisons for jobs in Silicon Valley and comparable jobs in the entertainment industry

• How today’s hot tech talent market is helping and hurting entertainment companies

• Hollywood’s rock star problem can make a tech job here less attractive than one in Silicon Valley or at a tech-first company like Amazon, Apple or Netflix.

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