Is Condé Nast Entertainment Finally Ready To Take Hollywood By Storm?

Books have long been a go-to source for movie producers looking for their next film. While “based on the best-selling novel . . .” continues to pop up in just about every other trailer, Dawn Ostroff has been tasked with making “based on that interesting magazine article you read that one time . . .” just as prevalent, using Condé Nast’s extensive library of content.

Even though it may not be directly referenced in promotional campaigns, magazine and newspaper articles have indeed been the source of many notable and award-winning films, including Boogie Nights (“The Devil and John Holmes,” Rolling Stone), The Fast and the Furious (“Racer X,” Vibe), and even A Nightmare on Elm Street was inspired by a series of stories from the Los Angeles Times. But perhaps the leader in publishing such adaptable articles is Condé Nast, with write-ups in The New Yorker, Allure, Vanity Fair, GQ, and Wired transforming into Brokeback Mountain, Eat Pray Love, The Bling Ring, Coyote Ugly, and Argo, respectively–all of which Condé Nast had little to no control over, ironically enough.

In the past, articles from Condé Nast publications were optioned by outside producers and developed and distributed like any other source material. Sensing an untapped revenue stream, Condé Nast CEO Bob Sauerberg launched Condé Nast Entertainment in 2011, an in-house production and distribution studio lead by Ostroff, the former TV exec who oversaw major changes at Lifetime and the CW.

The mandate to Ostroff was clear: monetize Condé Nast’s IP through film, TV, and digital video. Over the years, Condé Nast Entertainment has seen explosive numbers across its digital platforms. The breakaway success of shows like Vogue‘s 73 Questions and Wired‘s Autocomplete Interviews have contributed to 11.76 billion video views in 2017. However, while short-form content on YouTube or social media has been an essential component to Condé Nast Entertainment’s growth, there’s typically no tie-in to existing articles or profiles, i.e. what’s at the heart Ostroff’s assignment.

It’s been over six years since Condé Nast Entertainment launched and it has yet to replicate the success in film or TV that outside producers have had with the publisher’s content. Ostroff is sitting on a mountain of IP from some of the most popular magazines in the industry, but can she figure out a way to spin it into Hollywood gold?

Finding the Next Argo–But at what cost?

Condé Nast Entertainment stumbled out of the gate with its first feature film Army of One, the critically panned comedy starring Nicolas Cage as an unemployed handyman who receives a message from God to take out Osama bin Laden. Based on a GQ profile, Army of One received a paltry 27% freshness rating on Rotten Tomatoes and was never released theatrically in the U.S.

However, 2017’s Only the Brave fared far better critically. The firefighter drama starring Jeff Bridges, Jennifer Connelly, and Miles Teller was adapted from the GQ article “No Exit” and garnered an 88% freshness rating on Rotten Tomatoes. Even though it wasn’t what anyone would consider a blockbuster–pulling in reported $23 million worldwide against a budget of $38 million–it was a step in the right direction for Ostroff and her team.

“In the past five years, we’ve seen big turns and we’ve found a niche for ourselves,” Ostroff says. “Although we do have comedies and we have a lot of different types of films because the articles that the magazines cover are such a broad range, we’re looking at movies that are more mature and will appeal to an audience looking for a different experience than someone going to see Star Wars or one of the big tentpole movies.”

What Condé Nast Entertainment needs is an Argo, Brokeback Mountain, or Boys Don’t Cry–a buzzy, award season magnet that will make the industry take the company seriously. And that film very well could be within the 35 projects they’re working on, including Old Man and the Gun with Robert Redford as a septuagenarian bank robber, and King of the Jungle starring Johnny Depp as eccentric computer antivirus pioneer John McAfee. Condé Nast Entertainment’s plans for scaling film production are ambitious–and that ambition, some say, is coming at a cost to the journalists behind the articles.

The contracts Condé Nast Entertainment has in place have been described as “bottom-of-the-barrel pricing.” According to contracts obtained by the New York Times in 2013, writers can receive anywhere from $2,500 to $5,000 for a 12-month option. And should the project turn into a feature film, the writer will take in no more than 1% of the purchase price. It’s been estimated that typical options for articles can range from $5,000 to $75,000, but Ostroff defends Condé Nast Entertainment’s position as a matter of scale. Because journalists get option money whether or not their film makes it to the big screen–and because Ostroff is optioning so many articles–what Condé Nast Entertainment offers has to be a workable figure.

Although exact figures were not given, Condé Nast Entertainment has confirmed to Fast Company that the business has evolved in the past five years and that the rate it offers is now higher, based on the writer’s experience as well as other factors.

“The writers wind up making much more money by having these deals in place because we option so many articles. We have 65 projects that are in development as TV or as films. So that’s money that the writers are making,” Ostroff says. “We don’t take advantage of anybody. It really is a plus as opposed to a minus.”

The Humbling (And Necessary) Experience Of Failing At Your Expertise

Going into her role at Condé Nast Entertainment, Ostroff’s expertise was TV. As the former president of the CW, Ostroff spearheaded a forward-thinking strategy at the time that closed a revenue gap caused by Gossip Girl fans streaming the show illegally. At UPN, she created what she calls one of her proudest projects to date: Platinum, the 2003 drama written by John Ridley (12 Years a Slave) that is considered to be a precursor to Fox’s hit show Empire. Suffice it to say, Ostroff felt confident going into Condé Nast Entertainment as far as TV was concerned. But the learning curve was much more steep than she anticipated.

The trial and error of digital shows like GQ‘s Jogging With James or Teen Vogue‘s My Room Makeover put Ostroff on the right track toward selling six long-form shows, including Last Chance U, the critically acclaimed Netflix series that stems from a 2014 GQ article–as well as the true crime drama series Vanity Fair Confidential on Investigation Discovery that wrapped up its third season in April.

For Ostroff, it was a matter of switching her way of thinking.

“It’s a very humbling experience because I went from being a buyer to being a seller,” she says. “As the expansion of Netflix, Amazon, and Hulu came to fruition, it introduced a new opportunity for us, and we were able to expand not only what cable and broadcast networks needed, but also now what these full-episode digital players needed. It was an opportunity to learn with them and to be able to experience the business through their sense.”

Being Fearless In The Age of the “New Prime Time”

Condé Nast Entertainment may not have found its culture-defining hit in film or TV just yet, but it’s certainly not a lost cause. Finding solid footing in two industries navigating a perpetual state of flux for years is bound to come with a certain margin of error–and having that permission to fail has been critical for Ostroff in finding Condé Nast Entertainment’s footing.

“That was one of the biggest hurdles when I came here because a lot of the people who work at Condé Nast were so used to succeeding on every single front that the idea that you could fail in order to be successful was a very hard concept,” Ostroff says. “You can’t let fear drive you in anything that’s about creativity. Even on the business side, we could not let fear drive us–fear of not finding the proper monetization would have put us out of business in a minute.”

That mentality applies just as strongly to Condé Nast Entertainment’s efforts in digital video. Despite its massive presence online, cranking out more than 400 videos per month and even becoming profitable a year ahead of schedule in 2016, Ostroff isn’t letting complacency, let alone fear, hold her back from figuring out better monetization strategies.

“You have to expect everything to change every three months. If you look at it through that lens and understand that evolution is part of the business, it really gives you a totally different mindset,” Ostroff says. “We have a long way to go to monetize digital video compared to traditional media, but I think things are turning around. The reality is millennials and gen-z’ers are creating new viewing habits. Google came out with a survey about eight months ago that said millennials and gen-z’ers are spending more than 3.5 hours a day on their mobile device watching video. That’s the new prime time, when you think about it. And so the question becomes how do we really monetize those eyeballs?”

The way Ostroff sees it, Condé Nast Entertainment is currently in its “third inning.” It’s not exactly where she wants it to be, but she’s optimistic that it will be a major and profitable player in the near future.

“Our goal every year is to be able to speak to people and viewers on as many platforms as possible, in as many different formats as possible and then make money and monetize it,” Ostroff says. “You can create and tell stories in all these different ways, and that’s the thread that ties us across the entire company. How do we continue to entertain and delight and surprise our viewers so that they keep coming back for more?”