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