August 6, 2018

Hollywood’s Billion Dollar Social Media Problem

Following James Gunn’s tweet controversy with Disney, The Ringer posted an article on how Hollywood vets their talent in the age of Twitter. They said that TV and film studios are scrambling for ways to protect themselves from the controversy and expense of a social media scandal, without having to actually read through thousands of old tweets.

With Roseanne’s scandal costing over $60 million in lost ad revenue and Gunn being just the latest star to run into financial and reputational losses over online content, it has become clear that Hollywood has deeply entrenched issues when it comes to screening and managing stars for reputational risk online. At this rate, the industry is slated to lose over $1 billion in the next year over social media issues alone. The proliferation of digital content has outpaced the industry’s tools for staying on top of it all, leaving companies wondering what to do—and who will be next.

Hollywood’s reliance on legal solutions is shortsighted

In response to recent scandals, TV and film studios have turned to older solutions like the morality clause, created in 1921 to mitigate risk when working with talent. Morality clauses protect companies by offering an “emergency exit” in the event of negative press, and were historically used in only a number of cases. But in the #MeToo and Twitter era, studios are racing to add morality clauses to their contracts. After Kevin Spacey was fired by Netflix on multiple allegations of sexual assault, Spacey was able to charge Netflix for $39 million. The reason? His contract did not include a morality clause. Studios are scurrying for whatever tools they can find to protect themselves from disrepute, but they’ve fallen into the trap of relying on familiar tools, when the problem is now far bigger than their chosen solution.

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While the morality clause can help protect your business and brand, it’s ill-equipped to prevent scandals when an influencer already has so much content online. James Gunn showed the world that tweets going as far back as 2012 can still cause controversy six years later, and Roseanne showed us that past tweets could have predicted the one that led to her termination. So even with morality clauses in place, your influencer’s tweets are still out there. If you’re handing over a sizable check to anyone, the due diligence process needs far more than post-incident protections.

The entertainment industry needs new, data-driven screening

Shouldn’t companies be able to mitigate risk up front, before another high-profile social media or sexual harassment scandal arises? Influencers are public facing individuals with dense online personas. The reality of covering everything can be overwhelming, and ensuring all of that content is on brand can be nearly impossible. Why is there no stipulation to protect companies from past tweets and other behaviors that can sink a big budget project? Tweets must be read, and it’s on startups and technology companies to help gather and distill high volumes of data to help companies alleviate the issue.

Tech companies have built the tools to deal with the challenging cultural and digital landscape, which means studios can now set standards and mitigate risk early on. So why isn’t the check being done? Will companies leverage tools to stay out of the headlines, or will they continue to bank on broad (and often hostile) morality contracts that spur talent to, at best, watch what they say?

Hollywood studios could once clothe themselves with morality clauses, but in the age of Twitter, they must clad themselves with new armor. Unless they wish to repeat the cycle of hire, fire, and repair in a world of social vitriol, the tweets must be read and the standard of due diligence needs to change.

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