Talent agency CAA mulls Silicon Valley office
NEW YORK |
NEW YORK (Reuters) - Creative Artists Agency, the largest talent representation firm in Hollywood, is considering opening an office in Silicon Valley to expand ties with the technology community, according to two people familiar with the firm's plans.
CAA, whose client roster includes Brad Pitt, Oprah Winfrey and Peyton Manning, wants an "on the ground presence" in Palo Alto, these sources said. An outpost in Silicon Valley would help ease the travel load of CAA agents, some of whom already shuttle between Los Angeles and Palo Alto, California, three or four times a week.
Currently, the agency's business in Silicon Valley is divided into three: advising tech companies about Hollywood, partnering with venture capital firms to incubate start-ups and matching clients who have digital media ideas with companies that can help bring them to fruition.
Having regular contact with tech executives will also give CAA the opportunity to sign them up for representation on the speaking circuit and other endeavors outside of technology, both sources said.
The agency already represents Twitter co-founder Biz Stone, former Facebook executive Randi Zuckerberg -- the sister of Facebook Chief Executive Officer Mark Zuckerberg -- and other tech executives through its CAA Speakers division.
The plans under consideration by CAA underscore the idea that software developers and computer engineers are the new creative community and tech executives -- not media moguls -- are the rock stars of the business world.
A representative for CAA declined comment. One of the sources said CAA is extremely methodical about its business plans and is likely to "proceed very slowly" with any proposal to set up its own shingle in Silicon Valley.
"They aren't going to put up a big building with signage on it and dispatch a dozen agents to the Valley," this source said. "It'll be much more of a subtle presence."
HOLLYWOOD AND THE VALLEY
Hollywood's talent agencies started circling around Silicon Valley in the late 1990s, but were scared off after the dotcom bubble burst in 2000. Over the last few years, however, they have resumed efforts to diversify their client base and create new revenue opportunities.
But David Siminoff, a former partner with venture capital firm Venrock Ventures, said culture clashes often make it hard for Hollywood and Silicon Valley to work together.
Technology types tend not to pay much attention to movies and television shows, and the relatively paltry sum of studio revenues compared with those of hi-tech giants such as Apple Inc mean they do not take Hollywood seriously, Siminoff said.
On the Hollywood side, the appetite for risk when it comes to tech investments is too low and the ongoing threat of disruption to an already eroding business model too great.
"Most old media guys are afraid of technology," Siminoff told Reuters.
Siminoff has first-hand experience with this dynamic. While at Venrock, he was instrumental in setting up an incubator fund with talent agency William Morris Endeavor, venture capital firm Accel Partners, and AT&T Inc. Known as the Mail Room Fund, it had between $30 million and $50 million under management, but only invested around $5 million of that in three companies before shutting down in April.
Similarly, United Talent Agency helped incubate online video site 60Frames, but that wound down in 2009 after two years of operation because of a lack of funding.
CAA has experienced its own blips as well. In 2007, the agency was in preliminary talks to raise a $150 million to $200 million fund for start-up investments with venture capital firm Draper Fisher Jurvetson that ultimately broke down.
That same year, CAA teamed up with Internet television service Joost, tapping relationships with movie studios, television networks and record labels to supply programing. That website never gained traction against Google Inc's YouTube and was shut down less than two years after its launch.
INVESTING IN DIGITAL MEDIA
CAA now holds equity stakes in several digital media companies, including Will Ferrell's comedy site Funnyordie.com; Encore Career Institute, which offers extended education through online courses for baby-boomers; and a social media site for celebrities called Whosay.
The agency is not expected to set up an incubator fund or raise new money for Silicon Valley investments, said one of the sources. Instead, CAA plans to continue its strategy of investing directly in start-ups with venture capital firms.
The agency is likely to follow the model it established with wireless chip maker Qualcomm Inc. The two companies are partners on a venture called Creative Mobile Labs, which marries ideas for mobile apps from CAA's talent roster with Qualcomm engineers who can build the apps.
Technology companies are cultivating their own relationships with Hollywood outside the talent agencies as well. Last November, Twitter recruited former CAA executive Omid Ashtari to be its "L.A. person" as he told AllThingsD.com. Twitter told the blog that Ashtari will be charged with "entertainment business development."
(Additional reporting by Sarah McBride; editing by Gerald E. McCormick and Andre Grenon)
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