Speaker 1: Welcome to Strictly Business, Variety's weekly podcast featuring conversations with
Speaker 1: industry leaders about the business of media and entertainment. I'm
Speaker 1: Cynthia Lyttleton, co editor in chief Variety. My guests today
Speaker 1: are the leaders of Alloy Entertainment. You may not know
Speaker 1: the name Alloy, but you know their TV shows and
Speaker 1: movies Gossip Girl, Pretty Little Liars, You, Vampire Diaries, Sisterhood
Speaker 1: of the Traveling Pants, Purple Hearts, and the Ohso Charming.
Speaker 1: You are so not invited to my about mitzvah. The
Speaker 1: company has an unusual approach to developing content because it
Speaker 1: also has a very busy book division that provides the
Speaker 1: vast majority of the ip that drives the company. Here
Speaker 1: in this interview, we get the lowdown on Alloy's unusual
Speaker 1: business model from three key players CEO Leslie Morgenstein, TV
Speaker 1: chief Gina Girolamo, and film leader Elisa Koplovitz Dutton. The
Speaker 1: trio explain here how they've been able to thrive in
Speaker 1: the YA space and why they are now looking to
Speaker 1: grow up a bit, as they describe it. Morgenstein also
Speaker 1: walks us through how the company wound up being owned
Speaker 1: by Warner Brothers but still operates with great autonomy. That's
Speaker 1: all coming up after the break, and we're back with
Speaker 1: more from the leadership team at Alloy Entertainment. Les Morgenstein,
Speaker 1: Gina Jerromo, Elisa Dutton of Alloy Entertainment.
Speaker 2: Thank you so much for inviting me to.
Speaker 1: Your beautiful offices here on the Warner Brothers lot. It's
Speaker 1: my first podcast recording of twenty twenty four, and I'm
Speaker 1: excited because Alloy Entertainment is a company I've covered a
Speaker 1: long time, but I have really wanted to get to
Speaker 1: know you all better and get a little bit behind
Speaker 1: the scenes of how you create your content less from
Speaker 1: the thirty thousand foot view, can you tell me sort
Speaker 1: of what is Alloy's approach to nurturing and generating content.
Speaker 1: You have an incredible track record over the last fifteen
Speaker 1: twenty years of very buzzy television shows that really have
Speaker 1: penetrated the culture in a way that is hard to
Speaker 1: in our mass fractured media environment these days. What is
Speaker 1: your approach? Sure?
Speaker 3: And thank you for coming here and visiting with us,
Speaker 3: and we're pleased to be your first pot of the year.
Speaker 3: It's a pretty organic story and IP is such a
Speaker 3: buzzword or buzz phrase these days, and companies are so
Speaker 3: desirous of it. We never sat down and said we're
Speaker 3: going to become an IP company. It was more of
Speaker 3: a process of a group of people who love storytelling
Speaker 3: and had a good knack for what's a commercial idea
Speaker 3: building a business over many years. So the company started
Speaker 3: in the book business and originally was a production company
Speaker 3: for hire, producing a team book series called Sweet Valley High,
Speaker 3: and eventually.
Speaker 4: Got smart enough to know that.
Speaker 3: It needed to own its own properties and began brainstorming
Speaker 3: ideas like what's something we want to see, what's something
Speaker 3: we think will resonate with the audience, and putting those
Speaker 3: ideas together with great writers, so a nose for concept
Speaker 3: and a nose for talent, and that shop eventually produced
Speaker 3: Vampire Diaries and The Sister of the Traveling Pants and
Speaker 3: Gossip Girl and a very popular middle grade book series
Speaker 3: that became a movie called The Click, and.
Speaker 4: Pretty Little Liars and The Hundred and You. And the
Speaker 4: thing that.
Speaker 3: Really makes us unique, which you mentioned at the center
Speaker 3: of it, is a group of creative people who develop
Speaker 3: ideas internally and then go out and find the best talent,
Speaker 3: whether that's a novelist or a TV showrunner or a
Speaker 3: screenwriter to make it come to life.
Speaker 1: So that's an interesting It sounds like a large part
Speaker 1: of the ideas, the concepts that become books and television
Speaker 1: shows and potentially movies start in house and then you
Speaker 1: marry the writer. Would you say that's more common than
Speaker 1: a writer coming to you with a pitch.
Speaker 3: Yes, I mean these days we do have lots of
Speaker 3: relationships with book writers where we'll have a long term
Speaker 3: deal and it will be more collaborative, so sit down
Speaker 3: with the writer and just have brainstorming sessions.
Speaker 4: But the traditional.
Speaker 3: Model, which we still employ on at least half of
Speaker 3: our new book projects and we produce about twenty books
Speaker 3: a year, come from our group. And there's a team
Speaker 3: of editor writers in New York who get together on
Speaker 3: a regular basis. This team in LA less frequently and
Speaker 3: they just have creative sessions, and that can be very freeform.
Speaker 3: Come into the room with an idea, can be a
Speaker 3: pitch off of a magazine article or our show you
Speaker 3: went to, or it can be very specific like it
Speaker 3: was many years ago when Pretty Little Liars was birthed,
Speaker 3: and that was a development assignment, which actually came from
Speaker 3: our TV office.
Speaker 4: And the problem is, what's a team Desperate Housewives?
Speaker 3: And on the face of it, that doesn't make a
Speaker 3: lot of sense, like teenagers.
Speaker 4: Are not housewives.
Speaker 3: But when we talked about what was at the heart
Speaker 3: of that show, murder Mystery and then I deal like Suburbs,
Speaker 3: you kind of see that DNA in what pretty old
Speaker 3: liars came to be. So getting back to your question,
Speaker 3: the model has been and will continue to be.
Speaker 4: We are self generating.
Speaker 3: That's the thing that makes Alloy a viable business regardless
Speaker 3: of what's going around us in the industry.
Speaker 1: You're not beholden to the big pitch with the three
Speaker 1: Oscar winners and the clock and you must pay, you know,
Speaker 1: a small fortune to even get your foot in the door.
Speaker 3: Correct, And we're not chasing the hot new book. We're
Speaker 3: not going after the Sunday New York Times magazine article.
Speaker 3: We are coming up with great ideas we believe in
Speaker 3: and nurturing them over time. And like I said, you know,
Speaker 3: the various teams of the book team and Gina and
Speaker 3: TV and Lisa in movies has done a fantastic job
Speaker 3: marroring those ideas with great writers.
Speaker 1: So I would love your perspective on how does it
Speaker 1: how does it inform and help the process of developing
Speaker 1: television shows or movies when you are working with literary properties,
Speaker 1: people that are thinking in novelistic form, but you've got
Speaker 1: such a you know, you've got a hand in shaping
Speaker 1: that novel.
Speaker 2: Is that that? That's again a kind of a.
Speaker 1: Twist on the on the typical I love this book,
Speaker 1: I'm an option in the manuscript.
Speaker 5: Yeah, I mean, I'll jump in and I would say
Speaker 5: that we are all huge book lovers and TV and
Speaker 5: film lovers.
Speaker 6: It's a natural instinct to want to protect the concept
Speaker 6: as much as possible, but also understanding that each medium has,
Speaker 6: you know, specific rules for what works if you will,
Speaker 6: and so I think working with the book team in
Speaker 6: New York on a specific idea, they'll sometimes ask us
Speaker 6: to weigh in early in the stages of a book
Speaker 6: being developed. If it's eyed for television, we can give
Speaker 6: feedback that would help expand the world or the characters
Speaker 6: or the stories, or once the book is written, when
Speaker 6: we're meeting with writers, we can.
Speaker 5: Talk about ways to adapt several characters into only a few,
Speaker 5: or you know, hyper focus on a location of a
Speaker 5: book and give it specificity that would make the television
Speaker 5: show even more special. So I would say that's that's
Speaker 5: part of the joy of being on the ground floor
Speaker 5: in this company. It's all very fluid and we all
Speaker 5: communicate to one another regularly.
Speaker 1: So you can even think in terms of seasons like
Speaker 1: you can you can project out ahead on something you
Speaker 1: feel very strongly about.
Speaker 5: In terms of how to keep it going right, like
Speaker 5: potential something absolutely, yeah. I think it's whether it's something
Speaker 5: that we option outside of our library or something within
Speaker 5: our library. And you know, oftentimes we're working with books
Speaker 5: that are multiple book series, so we can sit and
Speaker 5: give a writer five novels that continue the foundation that's
Speaker 5: built in the first book and expands the world in
Speaker 5: a way that they can then take on.
Speaker 7: That was the case with Pretty Little Liars.
Speaker 5: When the final version of the show premiered, the seventh
Speaker 5: book had just been released, so those writers had seven
Speaker 5: novels that they could dive into and pull story and
Speaker 5: character and.
Speaker 1: Murders, and from a sales and revenue standpoint, like do
Speaker 1: you see is it kind of.
Speaker 2: A virtuous circle. The books come and the you know,
Speaker 2: when you coordinate that kind of stuff.
Speaker 3: The reality of the book business today is the company
Speaker 3: has really transitioned from being a book business with a
Speaker 3: film and TV office to being a film and TV
Speaker 3: business that has an internal IP generation machine that in
Speaker 3: great success, is profitable. But we now are much more
Speaker 3: cognizant of our book business exists to feed film and
Speaker 3: TV and the communication is much more frequent than it
Speaker 3: used to be, and it's much more two ways. So
Speaker 3: there are many books that have started as that would
Speaker 3: be a great idea for a show or that would
Speaker 3: be a great idea for a movie, and recently Purple
Speaker 3: Hearts is an example of that, where that began as
Speaker 3: a movie pitch and one of our executives here had
Speaker 3: read or heard a true story about contract military marriages
Speaker 3: and called names it is this the basis for a
Speaker 3: romantic movie? And I was like, Yeah, I love that.
Speaker 3: Let's just get going on a script. So we did that,
Speaker 3: and unfortunately at the time we're on a able to
Speaker 3: set it up. But we loved it so much, so
Speaker 3: let's turn it into a book. And we did, and
Speaker 3: we published the book and then came back to it
Speaker 3: in features, and obviously we're fortunate enough to put it
Speaker 3: together with Sophia Carson.
Speaker 4: And Wiz Allen, and the movie went on. It was
Speaker 4: a great success.
Speaker 3: But that that is typical of the model now where
Speaker 3: the starting point can be over here and can go
Speaker 3: back to the book team, and the book team will.
Speaker 4: Jump on it if it makes sense in this book
Speaker 4: as well.
Speaker 1: How is it different working at Alloy in this process
Speaker 1: than in you know past in your past lives, at
Speaker 1: other at other creative shops.
Speaker 8: The book's really become our superpower because it gives us
Speaker 8: the kind of luxury of time to invest and be very.
Speaker 9: Hands on and involved as producers.
Speaker 8: We are kind of we have a we have a
Speaker 8: healthy slate, but because we are not we have this
Speaker 8: kind of stable of books and continuous kind of new
Speaker 8: new flow of material coming our way.
Speaker 9: We can really just focus on the work, which is
Speaker 9: a luxury. And I would say that it's.
Speaker 8: Wonderful to be able to you know, if you have
Speaker 8: a feature idea, or you hear something that a studio
Speaker 8: is really looking for. To be able to run that
Speaker 8: by our book business and then talk about what that
Speaker 8: would look like in book form is amazing because we
Speaker 8: all know the studios get really excited when they hear
Speaker 8: that there's a book, and the publishers get.
Speaker 9: Really excited when they hear that there could be a movie.
Speaker 8: So it really does become a circular economy, and in
Speaker 8: the best possible way, and a very creative one. And
Speaker 8: the other thing about the books, and what makes this
Speaker 8: different from other jobs, is that sometimes you'll get a
Speaker 8: call on or sometimes you'll be.
Speaker 9: Able to take a book that is out of print.
Speaker 8: In the case of you know, two years ago, there
Speaker 8: were two books that were from the early aughts.
Speaker 9: One was You're So.
Speaker 8: Not Invited to My Botman's Fat, which was a title
Speaker 8: that just we kept saying, this is a movie, but
Speaker 8: how do we put together and convince people that it's
Speaker 8: not a niche, that it can really resonate on this
Speaker 8: universal level. And we found a writer and sent it
Speaker 8: to Adam Sandler and he said yes, and the rest
Speaker 8: is history.
Speaker 9: But that book was not a new book. It was
Speaker 9: not a hot book. Similarly, Horoscope was a book that
Speaker 9: I mean, I didn't even know.
Speaker 8: I'm pretty aware of all of our library and it's
Speaker 8: a deep library, but I had never even heard of Horoscope.
Speaker 9: And we got a call.
Speaker 8: And now that movie is coming out in ment so
Speaker 8: sometimes it really is the gift that keeps on giving.
Speaker 8: It can be very surprising how deep the well is.
Speaker 8: People will say I'm looking for a boarding school movie,
Speaker 8: and in fact we probably have three of them. So
Speaker 8: that makes it very different from other positions.
Speaker 6: Because we have such strong foundation in our concepts in
Speaker 6: our books, we're patient with the adaptations, so similar to
Speaker 6: what Alisa was saying earlier, we're not chasing it. And
Speaker 6: so there have been several iterations of some of the
Speaker 6: shows you've mentioned during the development process that didn't move forward,
Speaker 6: but we never gave up on the concept because we
Speaker 6: believed it would be a successful series. So that's something
Speaker 6: I think also all of us working at the company,
Speaker 6: you know, at Leasta and I are ten plus years,
Speaker 6: we have such a depth of knowledge of the material
Speaker 6: that once we meet a writer or we hear a
Speaker 6: target that someone's looking for, we can reach back in
Speaker 6: and say, you know, we tried this five times, but
Speaker 6: maybe this is the one that's going to make it.
Speaker 7: Is the luxury to be a because that's exactly right.
Speaker 1: That's interesting, that's really interesting.
Speaker 2: Let me ask you.
Speaker 9: Lesson, you know, what.
Speaker 1: What kind of big picture learning is about the modern
Speaker 1: television landscape.
Speaker 2: Did you learn from the you experience?
Speaker 1: You know, in the industry, it was very close. We
Speaker 1: tracked that you started. You know, it was a very
Speaker 1: distinctive show. Incredible star in Penn Badgeley, who we had
Speaker 1: Variety had as a cover feature last year in twenty
Speaker 1: twenty three, a very successful cover for us. You know,
Speaker 1: it was a great It was the same show. It
Speaker 1: was a great show. It did not succeed on the
Speaker 1: linear basic cable. It went to Netflix, and we know
Speaker 1: the risk.
Speaker 5: We were all very disappointed in how it performed on
Speaker 5: Lifetime because we knew in our heart that we had
Speaker 5: something really special.
Speaker 7: We all believed it was really special, and then.
Speaker 5: When we heard that Lifetime was picking us up to
Speaker 5: a second season, it was all very exciting. We had
Speaker 5: met Lesson, I had met with Bella Bajara and Stacy
Speaker 5: Silverman at Netflix when they were running the international division,
Speaker 5: and we said, we have the show at Lifetime, here's
Speaker 5: the script. This could be something for your international agenda
Speaker 5: because they were buying American shows and so them as
Speaker 5: originals for Netflix. And literally twenty four hours later, Bella
Speaker 5: called and Stacy called us and said we want.
Speaker 7: This, and so that's a good call.
Speaker 5: We were able to go to the studio and say
Speaker 5: Netflix wants this for international, regardless of what Lifetime thinks
Speaker 5: of us and what our future.
Speaker 7: Is at Lifetime, we have this piece and so that
Speaker 7: deal was made. Do you want to continue to keep?
Speaker 4: Oh?
Speaker 3: Okay?
Speaker 5: So that deal was made and then Lifetime did pick
Speaker 5: us up for a season two. They had a twenty
Speaker 5: four hour kill switch, and they it seemed as though
Speaker 5: they were not going to they were going to renege
Speaker 5: on the second season. So we immediately called Netflix and said,
Speaker 5: you're going to be able to have the show if
Speaker 5: you want it, and they absolutely stood up and grabbed
Speaker 5: it and put it on Linny. They put it on
Speaker 5: the domestic platform almost a year before they were planning to.
Speaker 7: And that's when it became an enormous hit.
Speaker 1: And it was interesting because it was like there wasn't
Speaker 1: a gigantic marketing campaign.
Speaker 2: It just found its audience.
Speaker 1: Is it just as simple as there's a whole lot
Speaker 1: more eighteen to forty year olds watching Netflix than there
Speaker 1: are Lifetime these days?
Speaker 3: In this case, I don't think it was a question
Speaker 3: of linear versus streaming so much as that is where
Speaker 3: did the where does the demo for the show live
Speaker 3: and how do they want to watch the show?
Speaker 4: That's right, Yeah, and I think, look, they've been.
Speaker 3: Tremendous partners and really supportive of the show. But I
Speaker 3: think in this instance, it was the audience finding the
Speaker 3: show more than the show being served up to them.
Speaker 1: Let me ask you on just a a on the
Speaker 1: more macroeconomic level. You know, obviously a lot of changes
Speaker 1: in television. The syndication market is in, you know, various
Speaker 1: stages of being kind of reinvented. Does that cons earn
Speaker 1: you long term as a producer of series?
Speaker 9: Does because we.
Speaker 3: Are fortunate to have had several hit shows go the
Speaker 3: distance under the traditional model, and we have the benefit
Speaker 3: of seeing the money those shows kick off. We're also
Speaker 3: fortunate enough to have screaming hits and see the money
Speaker 3: those shows kick off.
Speaker 4: And it's a different business.
Speaker 3: And you know, I think the business is very profitable,
Speaker 3: it's very sustainable. It is not comparable, and we would
Speaker 3: love to have opportunities where they're second and third revenue streams.
Speaker 4: From our shows.
Speaker 3: And until there's a shift in the model, which maybe
Speaker 3: there will be, we're gonna continue to plug away and
Speaker 3: do what we do, but.
Speaker 4: Would I love to see some return to that traditional model. Yeah.
Speaker 4: Do I see anyone diving in and kind of paving
Speaker 4: the way. I don't.
Speaker 1: I'm very curious to see kind of as we really
Speaker 1: kind of shake out from the impact of the strikes
Speaker 1: and all the all the evaluation that I'm very interested
Speaker 1: to see whether if there's a there might be a
Speaker 1: bounce back in linear television that could be completely you know,
Speaker 1: delusional optimism.
Speaker 2: On my part as a fan of broadcast television.
Speaker 3: I think the Yellowstone and only Murderers I'm putting in
Speaker 3: quotations experiments.
Speaker 7: What a concept.
Speaker 3: Yeah, maybe that's indicative of where the business is going,
Speaker 3: where shows are platformed across right windows simultaneously or reaching
Speaker 3: as broad an audience as possible, so.
Speaker 4: That the marketing dollars really can be as effective as
Speaker 4: they can.
Speaker 3: Be, and you bring down the upfront costs and share
Speaker 3: them back any more.
Speaker 1: Don't turn the page just yet. We'll be back with
Speaker 1: more from Alloy Entertainment after this pause for monetization, and
Speaker 1: we're back with more from the Home of Gossip Girl,
Speaker 1: Pretty Little Liars, and you, Elisa.
Speaker 2: The film business is no walk in the park either.
Speaker 1: Right now, Can you tell me how you approach Do
Speaker 1: you look for a certain amount of things that can
Speaker 1: be done theatrically?
Speaker 2: Do you look to sell straight to streamers?
Speaker 1: Some titles tell me about sort of how you go
Speaker 1: about developing your slate.
Speaker 9: We have had great success in streaming.
Speaker 7: As of late.
Speaker 9: On Netflix and three.
Speaker 4: Number ones in a row.
Speaker 9: So we have been very fortunate that our audience is
Speaker 9: the alloy audience.
Speaker 8: Is there, but they show up for streaming, whether it's
Speaker 8: on their phone, on their laptop, whatever. I think that
Speaker 8: that's been great for us, but we still love the
Speaker 8: theatrical experience and hope to make movies for theatrical.
Speaker 9: It was obviously a joy to see.
Speaker 8: People you know return in some form over this past
Speaker 8: year and post COVID, and we hope to do more
Speaker 8: of it. That said, I think streaming will be a
Speaker 8: big core of our business because that's where our audience
Speaker 8: primarily lives. Although my daughters fifteen tells me that on
Speaker 8: her TikTok feed theaters are coming back, so let's.
Speaker 3: Know, we would love for that to be part of
Speaker 3: our business. But we also want to have wins. So
Speaker 3: if we developing a movie like Purple Hearts or you're
Speaker 3: setum invited to my bio Mitzvah. We are cognizant of
Speaker 3: who the audience for those movies are, and.
Speaker 4: We want to put it.
Speaker 3: In a place where it's going to have success and
Speaker 3: where we are going to have success and not have
Speaker 3: the pressure of delivering on something that in this current
Speaker 3: market feels really challenged. We want to remain the biggest
Speaker 3: fish in the YA pond.
Speaker 4: But we are really running our grown up business, and
Speaker 4: if you look at our past eighteen months, our two.
Speaker 3: Biggest successes are you Joel Goldberg's in his late thirties
Speaker 3: at this point and Purple Hearts, which was a grown
Speaker 3: up romance, and so we are focused on that. Our
Speaker 3: book business currently is about twenty five percent books for adults,
Speaker 3: although WYAT titles.
Speaker 4: Are read by adult women.
Speaker 3: By the end of twenty five, it's going to be
Speaker 3: fifty to fifty and that's really the focus.
Speaker 4: And that's driven by a couple things.
Speaker 3: One is the CWN free form aren't here anymore, and
Speaker 3: they were the primary buyers of our team shows or
Speaker 3: shows with team protagonists.
Speaker 1: Even if we were sitting here five years ago, that
Speaker 1: would have sounded like, oh, come on, you're kidding, you know.
Speaker 1: It's just a measure, and it's not a finger pointing,
Speaker 1: but it's just a measure of how the market has changed.
Speaker 3: They for so many years were so vital to our
Speaker 3: business and such great partners, and we had just phenomenal
Speaker 3: success together. So that being said, we need to pivot
Speaker 3: the business. We're still gonna have YA shows and YA movies,
Speaker 3: but there.
Speaker 4: Are fewer homes.
Speaker 2: Let me ask you, lets to kind of complete the circle.
Speaker 1: You mentioned that you acquired the company some your like
Speaker 1: around late ninety nineteen nineties, and then at some point
Speaker 1: Warner Brothers came in as the owner. Can you talk
Speaker 1: about what led to that, what that has brought to you.
Speaker 3: There have been many corporate transactions over the thirty plus
Speaker 3: years I've been in this business. At one point I
Speaker 3: acquired the company with Amberg sharers who wrote the Traim
Speaker 3: Pants novels from the original founder. We eventually sold the
Speaker 3: business to what was Alloy dot com, which.
Speaker 9: Was a.
Speaker 3: Company selling skateboard apparel and trendy clothing through a catalog
Speaker 3: and website. Is that how Alloy became Alloy became so
Speaker 3: we became Ali Entertainment.
Speaker 7: It's kind of a great name.
Speaker 3: They were in the media and marketing business and we
Speaker 3: were a small.
Speaker 4: Public company during the odds.
Speaker 3: Eventually we went private and our investors put Alloy Entertainment
Speaker 3: on the market. At that point in time, we had
Speaker 3: seven shows on the air. We were doing tremendously well.
Speaker 3: We still are doing tremendously well. And Warners was the
Speaker 3: most logical buyer for the business.
Speaker 4: Our TV business was there.
Speaker 3: We had three monster shows with them at the time, Gossip.
Speaker 4: Vampire Diaries and Pretty Little Liars.
Speaker 3: They actually probably had a better sense of what we
Speaker 3: were worth than our owners did. Yeah, really did from
Speaker 3: us the people who worked at the company. It was
Speaker 3: the best outcome because we knew the party as well.
Speaker 4: We had a great working relationship. You know that we
Speaker 4: were talking about the lot earlier, just the dream of
Speaker 4: this being our home.
Speaker 3: So they Warner Brothers TV acquired the business from the
Speaker 3: private equity owners in twenty twelve. We've operated as a
Speaker 3: wholly owned subsidiary of the Talviison Group since that. All
Speaker 3: of our series we produce through WBTV. Our movie business
Speaker 3: is independent, and that has been a great relationship.
Speaker 4: You know.
Speaker 3: One of Brothers pictures in Newline are very specific businesses,
Speaker 3: and we are a very specific business. Where there are overlaps,
Speaker 3: we absolutely want to be in business, and where there are,
Speaker 3: the company has been.
Speaker 4: Generous enough to us go elsewhere.
Speaker 1: I mean that seems like the best of all possible worlds.
Speaker 1: Plus again, folks, I cannot say enough about the beautiful wood.
Speaker 1: Thanks for listening. Be sure to leave us a review
Speaker 1: at Apple Podcasts or Amazon Music. We love to hear
Speaker 1: from listeners. Please go to Variety dot com and sign
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