Dr. Entertainment


THE NEW YORKER MAGAZINE – November 29, 1997

Dr. Entertainment

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


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

Heads were tilted tentatively, dubiously, then shaken.

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

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

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

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,

“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

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?” ©