Kurt Andersen ~ The New Yorker ~ Dr. Entertainment

THE NEW YORKER MAGAZINE - November 29, 1999

Dr. Entertainment

Do C.E.O.s really need Michael Wolf?

BY KURT ANDERSEN

MICHAEL J. WOLF has the appearance and demeanor of a physician to the well-to-do: a youngish, slightly graying Upper East Side specialist, a pediatrician, maybe, or a psychiatrist. He is trim and dapper and sincere and prosperous-looking, radiating both extreme confidence and a reassuring deference. His manner, like that of a busy doctor, politely suggests that he knows a lot, definitely more than you do, and that although he doesn’t have any time to waste, he’s happy to use his knowledge to help you.

Wolf is a management consultant to the entertainment and media industries, and he works at the firm of Booz, Allen & Hamilton. His roster of former and current clients includes Ted Turner and Sumner Redstone, Universal, Time Warner, Hearst, News Corporation, Bertelsmann, MTV, NBC, the N.F.L., and the N.B.A. He is certainly the most well-known person in his field, and perhaps the most highly regarded. His success is a function of fortuitous timing, and of his own shrewdness in exploiting the moment. In the late eighties, he saw that the infotainment businesses were consolidating, expanding, and, as a result of new technologies, experiencing a variously hopeful and panicked gold-rush hysteria. He saw that conditions were ideal to begin selling calm, clear-eyed, buttoned-down advice about how to cope with growth, and with the new age of home video, cable TV, and the Internet.

At 7:35 one morning earlier this year, Wolf stepped into a conference room at Booz, Allen’s Manhattan offices to join three colleagues, all of them, like him, white men dressed in conservative ties and white shirts. The three younger colleagues were there to brief Wolf, the “practice leader,” on the team’s work for a record company. (The recording industry, more than any other, is being discombobulated by new technology. If music can be downloaded at home off the Internet, who needs record stores?)

Wolf declined the catered pastries in favor of an apple he’d brought from home. (He also carries his own snack bags of carrot sticks to meetings outside the office, and doesn’t drink alcohol or coffee.) The team’s discussion concerned merchandising—CD-pricing logic, promotional “incentive” payments by record companies to stores—and how to persuade the client to take their advice.

“What we baked into this program,” one of the junior consultants said of a new pricing scheme they’d drafted for the client, “is significant volume discounts.”

“Everyone at the company agrees with the implementation we talked about,” another associate said. “It looks reasonably implementable.”

“We met yesterday” with executives at the client company, the first junior consultant said, “and we got some pushback on the new pricing”—“pushback” is their word for “disagreement”—“from some of the label guys. They’re terrified long-term.”

Someone suggested that they gather the heads of the company’s labels for a Booz, Allen tutorial in distribution. Wolf shook his head. “The last thing you want to do is get all the label guys in the same room. That would be a disaster.” In other words, the clients might get riled up, and Wolf’s job is to keep them calm and rational. The meeting broke up when it was time for Wolf to give a radio interview.

UNTIL RECENTLY, Wolf has been a background figure in the entertainment and media businesses, familiar only to the cognoscenti. But, after a decade spent advising the glamorous executives of glamorous companies on how to fix their unglamorous strategic problems, Wolf has entered the public realm himself. Earlier this year, he published a book, “The Entertainment Economy: How Mega-Media Forces Are Transforming Our Lives,” and he has worked hard to promote it. The book has two incontrovertible theses. First, that because Americans now consider “fun as an entitlement,” a diagnosis Wolf makes without judgment, larger and larger swaths of life can be profitably understood as forms of entertainment—not just TV and music and journalism but retailing and politics and fast food and automobiles. The second idea, which is even more of a contemporary commonplace, is that virtually everything—not just movies and magazines and artists but also cable channels and studios and entire corporations—should be considered brands.

When I asked Wolf why he published the book, he was suddenly at a loss for words. “The main reason was because a lot of the things that I talk about in the book are...Let me start over again.” Then he hemmed and hawed diplomatically, since he couldn’t very well say he wrote it (or, rather, conscripted Booz, Allen employees to assemble research and hired a professional writer to turn his rough drafts into finished prose) in order to reveal the interesting secrets of his clients, or because he figured book buyers would want to spend twenty-five dollars to get the same advice for which a corporation pays him two hundred thousand dollars a month, or even because he was tired of working for household names and not being famous himself. “He realizes that you’ve got to personalize the brand,” one of his colleagues explained to me. So the book is a means of creating and promoting the Michael Wolf brand to a mass audience beyond his élite client pool, whose own brands he helps to promote to the mass audience.

This puts Wolf in a tricky position. Although he wants wider renown and respect, he’s hesitant to boast about specific accomplishments. Professional etiquette won’t permit him to claim credit, for example, for CNBC’s successful expansion onto the Internet, or for convincing Viacom to invest more in its Nickelodeon channel, or for the ratings turnaround of MTV. After the week I spent sitting in on strategy meetings that Wolf conducted with his Booz, Allen partners and teams of young M.B.A. foot soldiers, I called to ask if he had taken on any consulting projects since we’d last spoken. “New engagements?” he replied, using his consulting term of art. “Well, people are always asking my advice. I’m flying over to Germany next week to talk to the head of a major media company.” Another time, he referred unself-consciously to “all the moguls I deal with.” He wants the civilian world to be impressed, but he must be discreet, so he tends to name-drop generically.

But what advice do the power brokers seek? What exactly does a big-time management consultant do? From the outside, Wolf’s life resembles an investment banker’s—at his desk in a suit on Park Avenue every morning by 7:30, seldom home before 9 P.M., in Palo Alto or London several days a week, a relentless stream of urgent phone calls to and from moguls and their sub-moguls. But whenI suggested that he is the consulting industry’s version of the mergers-and-acquisitions whiz Steven Rattner, Wolf twisted up his face, as if he’d been accused of something a little unwholesome. He pointed out that what he does “is not about chitchatting with C.E.O.s. Investment bankers can do that.” He noted, with some pride, that he earns substantially less than his investment-banker peers, in the low seven figures. (This income disparity, he believes, indicates that what he does is nobler than mere deal-making.) The job of the M. & A. swashbuckler, motivated strictly by fees based on a percentage of any deal, is to persuade his C.E.O. client to buy Company X or sell out to Company Y. “My job,” Wolf said, “is to give them the right answer. It may not necessarily be the answer they want to hear—and, in fact, most of the time it isn’t the answer they want to hear.”

Unlike the overwhelming majority of the two hundred consultants who work under him at Booz, Allen, Wolf does not have an M.B.A. Nor did he have any deep experience in the field before he set himself up as an expert. After graduating from Columbia, he said, “I did marketing for one of the Hollywood studios, and then I went to Europe, where I worked in financial services, doing marketing—”

Which studio? I asked.

“I worked for an ad agency in Miami,” he paused to explain, that had Paramount as one of its clients.

Nor is he the sort of charismatic visionary who changes people’s minds by the sheer force of his presence. He is slightly built and courtly, and has none of the ferocious, fixed-eye-contact enthusiasm of the hard-sell mesmerizer. Instead, what Wolf had when he arrived at Booz, Allen, in 1989, was perfect breeding for the industry—his father is an investment adviser, his mother, Jeanne Wolf, has been a producer and an on-air correspondent for “Entertainment Tonight” and the E! entertainment channel—as well as the good fortune to arrive at the beginning of the digital revolution. “Technology is going to change my clients’ businesses,” he said. “The ground is moving underneath these people. It really is. It’s shifting all the time.” He smiled, like a successful trial lawyer talking about the glut of tort litigation. Until Wolf got into the business, Booz, Allen’s entertainment-and-media practice was puny; today, he and his consultants bring in a hundred million dollars a year, about a fifth of the firm’s commercial revenues.

Wolf also understood that the men and women who create cable-TV empires and record companies tend to operate by hunch and instinct, and aren’t predisposed to pore over numbers, draft five-year plans, or systematically scrutinize P. & L.s and operating doctrines. So Wolf and his consultants function as their blue-chip rent-a-nerds.

“Eighty per cent of business decisions are intuition,” one C.E.O. who has worked with Wolf told me. “There’s a false security that by hiring a consultant you’re going to have analysis that will allow you to make the right decision.” The main reason Wolf does so well, according to this executive, is that he is adept at both number-crunching and the more touchy-feely forms of executive support. The same client said, “Michael Wolf was very good with me—calling, having lunch, listening.” Although Wolf’s clients all agree that he and his teams are smart and hardworking, none of them could mention any specific, indispensable new idea or approach that the consultants had provided. “It validates and puts detail on what you already know,” Anthea Disney, an executive vice-president of News Corporation, said of consultants generally. “It’s always nice to have what you think is true validated. But I don’t think we learned tremendous things from them. I find this notion of the consultant as the supremely knowledgeable person idiotic. It’s offensive that people who are outsiders are anointed gurus of the media business. They look at your business from the outside, and they make judgments they may not be equipped to make.”

At a question-and-answer appearance at the W Hotel, in Manhattan, to promote “The Entertainment Economy,” Wolf’s interlocutor, the News Corporation book publisher and television host Judith Regan, asked him, “What do your clients need to do?” And he replied, “Make hits.” It reminded me of the story of the know-it-all explaining to the comedian how easy the comedian’s job is (“You know, it’s just ‘Hello ladies and gentlemen, joke, joke, joke, where are you from, joke, joke, joke, you’ve been a great audience, joke, joke,’ applause”).

But Wolf wasn’t kidding. A few years ago, when he summarized his team’s findings to the executives of the Nickelodeon cable channel, he told them that the way for Nick to grow even more successful was by making hits, and owning those hits. The recommendation, in the view of more than one Nickelodeon executive at the time, was not so much obvious as it was wrong, since the most successful cable channels—MTV, CNN, E!—are, in fact, not driven by individual hits.

To buttress their argument that Nickelodeon needed to concentrate more on creating hit shows, the Booz, Allen consultants told the executives that the channel’s new rival, the Cartoon Network, was about to have a big hit with its remake of the animated series “Jonny Quest.” Some years earlier, Wolf and Booz, Allen had finished an engagement for Turner Broadcasting, which owns the Cartoon Network. (“Jonny Quest” did not become a hit, as it turned out.)

“We won’t work for rivals,” Wolf told me, “and that rule outlives specific engagements. We’re conflicted out all the time.” So how did he justify consulting for Nickelodeon after working for Turner? “That was later,” he explained, and added that the two engagements dealt with “different issues.” He also admitted that he has worked for “every trade-book publisher.” Since all the big entertainment and media companies compete in multiple businesses—movies and cable channels and books and magazines—any company that brings Wolf in must have a tolerant attitude toward inherent conflicts of interest. But, as Wolf told me, the apparent “conflicts” often make him more attractive to his clients. David Stern, the N.B.A. commissioner, says one of the reasons he chose Booz, Allen was that Wolf had already worked for the N.F.L., and also for the TV networks that pay the N.B.A. for the rights to broadcast games. As one former client put it, “Michael’s global perspective”—meaning his inside knowledge of competitors’ businesses—is worth any theoretical risk of one’s own corporate secrets leaking out. He is like a bee buzzing among his clients’ companies, flying from corporate flower to corporate flower, carrying bits of pollen from Time Warner down to Viacom, from Bertelsmann over to Hearst, and so on, round and round, cross-fertilizing the blooms in the infotainment ecology.

MICHAEL WOLF believes that his strongest suit is fearless, apolitical truth-telling. “A lot of the reason I’ve been able to work well with a lot of these people,” he said, “is that I and our firm are very tough. I can go into a meeting room and shoot a missile in.” Yet he seems very reluctant to alienate current or future clients.

One morning, Wolf was in a Booz, Allen conference room with two consultants who work under him, putting the final touches on an upcoming presentation to the executives of a magazine-publishing company.

Michele Anderson, the senior underling in the room, mentioned that one of the company’s biggest magazines “had a tremendous falloff of readers per copy year to year.”

“They’re all saying, ‘Circ is down, circ is down,’” Wolf said. “But no one is looking at the root causes. We can’t take an incremental approach.”

A little later, Anderson said that executives at the company wanted to change the way they think about building circulation.

“But they haven’t done anything,” Wolf said. “It really comes down to the ability to execute.”

Anderson suggested they create a slide for the presentation that would depict the long-term circulation declines of all the company’s magazines.

No. “That may be rubbing salt in the wound,” he told her. “I don’t want this to be a lot of doom and gloom.”

ANOTHER time, Wolf and his partner Geoff Sands were meeting with two younger consultants, both women, to plan the presentation of their report to the executives of a cable-TV channel.

“We looked at a lot of out-of-the-box options,” one of the consultants explained.

Before she could list those options, Wolf said, “But they’re not going to work.”

The young woman smiled.

“I’m still intrigued by the idea of using the channel as a testing ground for new network shows,” Sands said. “But the people at the channel really pushed back on that.”

“They didn’t have a very good development slate in the past,” the other woman said.

“Is there enough money for them to be doing their own shows?” Wolf asked.

Heads were tilted tentatively, dubiously, then shaken.

“We got a lot of resistance on anything to do with scheduling,” Sands said.

The senior of the two consultants said, “One big pitch we make is for new investment. We need to say, ‘You should build this asset as opposed to’...” She smiled. “We didn’t say ‘milking.’”

“They need a bold stroke,” Wolf said.

Someone mentioned the boldest, most obvious stroke of all—persuading the channel’s various co-owners to sell their partial interests to just one among them so that the channel would have a single corporate parent with a consistent agenda.

Wolf shook his head. “Don’t turn their world upside down. I don’t think it’s realistic. They’ll just find it irritating.”

IN “The Entertainment Economy,” Wolf describes just about every entertainment C.E.O. in America as a genius. (“That’s way cranked back,” his collaborator, Peter Kaminsky, said. “He was more effusive about all of them” in the original version.) And in the internal Booz, Allen meetings I attended, after the candid roundtable critiques of the various companies’ shortsightedness and disarray, Wolf invariably reined in his staff, cautioning them not to upset the clients by being too blunt.

He seemed taken aback when I mentioned this. “I think there’s a difference between annoying somebody and picking your battles,” he explained. “This is not about pulling punches. What I don’t want to do is just put up a bunch of stuff that annoys people. A lot of this comes down to how you present the answer. See, when you deal with entertainment companies, they’re used to stories and narratives, so they have to be able to walk through the logic and get to the answer themselves.”

Wolf repeatedly uses therapeutic tropes to explain his work. “If you ask my six-year-old what does his dad do, he says, ‘He’s a doctor for companies.’” Describing the difficulties he’s had convincing client companies to deal with their dysfunctions, Wolf said, “People won’t take their medicine unless they believe their tummy aches.” Often, his doctor-patient metaphors are specifically psychiatric. More than once, he spoke of companies “being in denial” when he tells them they have problems. The Booz, Allen team’s principal task for the N.B.A., according to David Stern, has been helping him to transform the league from a mom-and-pop outfit into a much bigger, bureaucratically managed multimedia entertainment corporation—introducing tighter budgetary and business planning, cost-benefit analysis, strategic-planning processes. But in addition, Stern said, “Michael has a calming influence on me.” When I asked Wolf how he bills clients, he said, “It’s based on hours, but usually we agree on a fee up front. We don’t want clients to feel we have any interest” in running up billable hours, “like your psychiatrist has an interest in your illness.”

Interestingly, that is precisely Anthea Disney’s complaint about her Booz, Allen experience. “Part of their thing is to draw a bleaker picture of your business, so you keep coming back,” she told me. “They’re not going to tell you you’re well and you don’t need the treatment. They don’t want you to get off the couch.”

Several months after we met, Wolf assured me that all of the engagements I had observed earlier had been successful. The patients were on the road to recovery. At the cable channel, he said, “I showed what they were doing wasn’t going to work. The programming person didn’t want to change, but my job is to be an agent of change.” His record-company client had announced its new CD-pricing scheme, and had got favorable press coverage. The magazine company, he said, is persuading clothing stores to carry one of its women’s magazines, “because it makes the retail offering cooler.”

“ULTIMATELY, you have to make judgments about the intrinsic qualities of the products,” Wolf said of his work as a consultant. His clients’ products include Comedy Central’s “South Park” and its new, bouncing-bosom program, “The Man Show”; the “Jerry Springer Show” (Studios USA); “Rivera Live” (CNBC); and “World Championship Wrestling” (Time Warner). More than one of his clients distribute rap CDs that glorify misogyny and guns. “Yes,” he acknowledged, “but I think some of my clients, like MTV—MTV has very smartly sponsored antiviolence campaigns....I have yet to find a case where there’s a client I won’t work for. But I wouldn’t be surprised if that day came.... So far, I haven’t.”

I asked Wolf if he ever had any qualms about his work, whether, for instance, he’s disturbed by the replacement of homespun civic culture with synthetic, mass-marketed fun. “I’m not disturbed by it,” he said. “I really believe that entertainment in a lot of ways has become a way for people to come together.... It has, in fact, become—I’m convinced of this—it’s become a replacement for religion. And I think that in the same way people used to quote Scripture they’re now quoting ‘Seinfeld.’”

Despite his surface nerdiness, Wolf needs to be fluent, as he says often, with “what’s cool and what’s not cool.” I heard him tell someone that “the Taco Bell Chihuahua is about being cool.” He recently started wearing jeans to work on some days, and told me he wants Booz, Allen’s next offices to be more open and loftlike—“cool.” During a meeting, when Wolf mentioned the difficulty of breaking new recording artists, one of the younger consultants brought up two recent breakthrough successes, Fatboy Slim and Big Bad Voodoo Daddy. Wolf and the other two suit-and-tie white guys all nodded knowingly: Hmm, right, Big Bad Voodoo Daddy. When another junior consultant touted the prospects of Les Nubians, a duo of Spice Girls manqué from France, Wolf shook his head.

“Americans aren’t going to buy a French group,” he said.

Wolf’s partner John Frelinghuysen then suggested that he listen to the techno-pop band Enigma.

“I’ve heard Enigma,” he replied quickly, “and it’s not gonna happen. It’s an L.A. and New York thing.”

At the meeting about one of their cable-channel clients, Geoff Sands said the firm’s essential recommendation would be that the executives “focus on edgy.”

Wolf agreed. “It’s about what your parents don’t want you to watch. Like MTV.”

“I think you’re right,” Sands said. “Racy, edgy, irreverent—”

“Racy, no,” Wolf amended. “Edgy, yes. Irreverent, yes.” A little later, discussing how to present the recommendations to that client, Wolf said, “We have to revisit this issue about ‘edgy.’”

“We’ve tried to push this,” one of his lieutenants said, but the channel’s head of programming “gets very, very touchy.”

Wolf said that instead of critiquing specific programs on the channel they should push the executives to make changes in scheduling that would merely give the channel’s edgier programs a higher profile. “It reminds me of the time with Lew Wasserman,” he said, referring to his work for the chairman of M.C.A./Universal in 1995. “Someone said, ‘I don’t like that show,’ and I kicked him under the table. Nobody cares what the consultant likes.”

WHAT DOES the consultant like? Wolf’s job is to advise the distributors and marketers of every form of popular culture. “I’ll bet you he really watches nothing,” one of his clients in the TV business—a satisfied client—had said to me. And one of his colleagues said, more or less approvingly, “He experiences media and entertainment as executive summaries. He sees if it works or not.” But I was curious about Wolf’s own tastes, about which kinds of entertainment and media engage or amuse him most.

“I watch a lot of TV shows,” he said. “I spend an enormous amount of time in music stores, in bookstores.”

But he didn’t mention any specific programs, bands, or books. Does he watch MTV?

“Most of the time—I turned it off just now,” he said, sounding a little anxious, nodding toward the television set in a corner of his office. “What I try to do is to know what’s going on, what’s being listened to, what kind of movies are out there. I can read a women’s magazine, because I work for a lot of women’s magazines, and there are parts I’ll laugh at. I have a great time at this.”

But presumably, I suggested, he prefers to work for clients whose products genuinely interest him.

“Of course not,” he said. “Because what’s exciting about this is getting a view of what’s appealing to every type of group. One of our clients is one of the big TV networks in Brazil. They produce these telenovelas, the soap operas. I can have a good time watching it. That doesn’t mean that’s something I’m going to turn on every day.”

When I pressed Wolf for an example of something he personally enjoys—an author or a composer or pop act or director—he finally remembered one thing. “This is going to sound corny,” he said, “but one of the only times that I was dying to see a movie was one of the ‘Star Trek’ movies—‘First Contact.’ I called over to Viacom and said, ‘Please, can I come?’” He giggled. “But otherwise...”

Michael Wolf may be the ultimate undiscriminating postmodern cultural consumer, crazy about nothing, happy to glancingly experience everything. “At this point, it’s really not about my tastes,” he told me. “I enjoy a lot of things—my tastes are also sort of very with the masses....I like comedies....I’m just trying to think, Is there something?” He thought for another moment. “The tough question is, Is there something I don’t like?” ©