Make Art Make Money: Lessons From Jim Henson on Fueling Your Creative Career (23 page)

Ron Mueck, a sculptor, remembers being picked as the conceptual designer of the unfinished “Rocket Ship Show”:

A memo went around inviting everyone to contribute ideas towards the design of the characters.… Jim liked the sketches I sent through to him and I was assigned to the project and spent the next five months churning out sketches and models. Jim was always very enthusiastic and encouraging when he came to see my latest batch of drawings or sculpts. He wasn’t exactly sure what we were aiming for, but he seemed to know when we weren’t there yet. And so I would launch into a new batch of variations. Eventually we arrived at a group of characters he liked the look of.…”
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If Henson had been a perfectionist, he would have been able to tell Mueck or Midener
precisely
what he wanted and save them a lot of trouble, but since Henson wanted the best that Meuck was capable of—a product unique to Meuck and different from what Henson could imagine—he could only encourage more experimentation.

Innovation requires experimentation. But this leads us to a hard reality:
playing
with your medium costs an enormous amount of money.
Fraggle Rock
producer Larry Mirkin compared this expense to R&D in any industry:

If you want to put a “business plan lens” on it—and I don’t know that you should—I would argue that [Henson] understood how “Research and Development” works in the Arts. Everyone in the sciences and many people in industry understand the value of R&D, but in the Arts, spending money on “experimentation” or on something that has no concrete “end user” in sight is often considered wasteful, when it’s absolutely essential to innovation in the arts (just as it is in the sciences or in industry). On a deep artistic level, Jim trusted the process of creating art and he had the economic means (derived from other artistic efforts) to support that process. He really did put his money where his mouth (or his artistic soul) was.
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In fact, Henson put his own money
—
millions of it
—
into
The Muppet Show
,
Fraggle Rock
,
The Dark Crystal
, and almost all of his other projects,
before
he found a financial backer. But here lies a major problem for artists.

THE (FINANCIAL) TROUBLE WITH QUALITY
IT’S PROFIT-LESS

Innovation is expensive. The way to get it—experimentation—tends to cost more than it has to, making it a kind of gift. But giving gifts, as Lewis Hyde illustrated, does not make artists rich and seldom makes them break even.
The Muppet Show
in its fifth season cost $250,000
per episode
—bankrolled by British producer Lew Grade.
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To shoot an innovative spot like “In the Navy” with Muppet Vikings, the crew spent a whole day to get two minutes of film.
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According to
Time
it was “listed on the books as making no profit, in part because Henson keeps putting money back into the program.… ‘The long-range profit for this show is down the road, when it’s syndicated and sold to the stations,’ says Henson. ‘It’s a couple of years away.’”
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It seems strange that Grade, a savvy businessman, was funding something that made him no profit.

But this isn’t entirely true, because toy sales—split with Grade—were most likely left off the books. If toy sales made Henson’s agent rich—15 percent of Henson’s split, then Grade’s percentage was surely substantial. Just as toy sales made Henson’s gift of
Sesame Street
possible, they allowed
The Muppet Show
to be profitable, even while making no profit. In this way, innovation often tends to yield profit in the long run.
Time
explains:

Lord Grade adds with satisfaction that the take from this ‘strip syndication’—the sale of a show for the same time slot several days a week—will be spilt equally between HA! [Henson Associates] and his ACC group and will mean ‘millions of dollars.’
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Because
it was innovative,
The Muppet Show
was syndicated on TNT in the 1980s. At that point, people still loved the Muppets; the name was synonymous with quality—
because
Henson kept feeding money back into the show. This is how thinking long-term can turn an unprofitable business model profitable. The show itself was a gift—it did not make a profit. Its investor was repaid with toy sales, and then, years later … they hoped its quality would lead to an increase in value. Ironically, when Henson finally saw the profit from the show, he would use it for an even bigger project.

To short-term thinkers, as many managers and executives today tend to be, it seems crazy. Feeding the quality-monster is a circular and paradoxical way to run a business.

Emmet Otter points this out to his mother in
Jug-Band Christmas
, who, like the shoemaker in the fairy tale, funnels all her earnings back into raw materials for more work:

Good thinking, Ma! Now you can knit more socks to buy more pumpkins to sell more pies, to buy more wool …

It’s a circular business model that traps workers in infinite work. Profitwise, you’ll never get ahead.
However
, if you are an innovator who absolutely
loves
what you do, this is actually the most ideal, satisfying, and self-sustaining business model you can adopt.
The Fraggle Rock
minstrels sing about their lifestyle, “What we are is what we play/ never get a holiday/ ecstasy’s the only pay/ music makes us roam.” The Minstrel Cantus tells Mokey, “Wonderful, isn’t it? Being a Minstrel is enough work for your whole life!”
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This is the business model in which an artist and innovator can thrive—one with enough (art)work to last a lifetime. To the average businessman, it’s a gamble—there’s too much risk involved, there’s no end game, and what will we tell the shareholders at the quarterly meeting?

You’d have to tell them to
wait
. Sinking money back into
The Muppet Show
meant the show could get better and better. The higher the quality of the show, the more likely it would endure in the affection of viewers and the more likely it would earn a lot in syndication. It was a long-term strategy very different than the one used by the fly-by-night entertainment shows we usually see that lure with suspense, don’t deliver, but get out in enough time to take their ad profits to the bank. Making something with quality requires a different business model. Innovation requires patience—years with zero dollars on the books, a separate revenue stream if possible, and very often investment of one’s own money.

In
Of Muppets and Men
, Finch wrote:

Puppet shows on television have generally been characterized by a minimal expenditure on sets and production values. Where
The Muppet Show
is concerned, though, the opposite is the case. If an elaborate set is needed, it is built no mater what the cost, and the cost of the set is just the beginning.
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Whereas a typical businessman would spare this expense, Henson wanted to create something
new
. We see the same attitude with Walt Disney: “He admitted to one reporter that after
Snow White
‘he was afraid he could not equal it in other endeavors’—an attitude, the reporter observed, ‘quite in reverse of the Hollywood philosophy of coasting as long as possible on one successful film.’”
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But Hollywood has its reasons. I can imagine the venture capitalists on
Shark Tank
laughing at Henson’s business model, which permits eight hours of shooting to get two minutes of film—as it did when Linda Ronstadt performed “Blue Bayou” on
The Muppet Show
. How expensive is it to shoot eight hours on set at Elstree Studios, paying cameramen, lighting crew, puppeteers, a director? And that doesn’t include the man-hours of set builders or even the hours spent recording the song in the studio. Nor the hours spent conceptualizing it. The two-minute “Blue Bayou” sketch is the result of more like a hundred hours—like years of pressure compressing carbon into a diamond. “Blue Bayou” is effectually a two-minute
masterpiece
. It didn’t need to be that good or take that long. Perhaps that’s why it felt like a gift. Thirty years later, the show is still selling as a DVD. And one thing the venture capitalists forget is that when you blaze a trail with (expensive) quality, you are unlikely to have much competition.

On
60 Minutes
, Morley Safer said,

One reason the show has not been copied the way everything successful in television is copied, is that it’s so expensive to produce. The Muppet Show has set such a high standard for this kind of work that a cheap version of it would just be unacceptable.
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This same effect is noted with Disney and Pixar. Their quality came from an expense too great for any sane business to undertake. Both these businesses were notorious for
draining
capital in their early years.

In the 1930s, Walt Disney borrowed close to two million dollars from the Bank of America for
Snow White.
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The budget started out as only $250,000,
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but as filming went on, Walt and his brother Roy O. Disney took out three more loans. At each step along the way, Disney lured Bank of America in deeper with promises of
Snow White
’s success—and he was right. These loans were completely repaid when
Snow White
dazzled everyone who saw it. Of course, this didn’t end Disney’s debt—it just allowed him more credit to borrow for his next films. As soon as he retired his debt, Disney opened a revolving million-dollar line of credit. Borrow-and-promise had been Disney’s business strategy from the very beginning. Even before he got to Hollywood, he was perpetually borrowing money from friends and family and even declared bankruptcy in Kansas City.

With greater expenses than Disney’s cameras and hand-drawn cels, the Pixar studio needed to develop hardware, software,
and
trained computer animators to make its first movie. Their angel funder, Steve Jobs, essentially bought a stake in the company for $5 million, but reportedly sank $55 million into it over its first five years, when he saw essentially no profit.
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For innovative companies, it is not surprising to see periods of money-sucking while a masterpiece is in development. And it is the rare funder who can stomach such an investment. It is likely Bank of America didn’t know what it was getting into with
Snow White
. Steve Jobs likened his gradual-but-hefty investment to a frog being heated up in water: “‘If somebody had come to me and said, I want you to invest $55 million in this company, I would have said, “No!” he admitted.’”
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We might see this stringing-them-along strategy in Henson’s initial deal with Grade for a single season of twenty-four episodes.
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That one season of investing turned into five seasons, plus
The Muppet Movie
and the fifteen-million-dollar
Dark Crystal.
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To get funding, Henson had to convince Grade to share his long patience. Grade was once an artist himself—a dancer—turned mogul. Compared to Disney, Jim Henson started out with more capital of his own—profits from commercials and then
Sesame Street
toy sales—but in order to make a primetime puppet show and then a full-length puppet movie, Henson
needed
angel funding from Lord Grade. Movies are just plain expensive, and as Davis said, Henson was “notorious for going over budget.”
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It’s hard to say whether Grade was ever repaid for his investment, because, like Henson, he was also funneling his own profits back into art. Grade loved to fund expensive projects like the lovely and enduring
The Last Unicorn
, but in 1982, financial trouble forced him to sell his company off. It leads us to wonder, do the angel funders in art ever get to see their imagined profit?

We all know the factoid that says it was Pixar—not Apple—that made Steve Jobs a billionaire. Yet, to get that, he had to agree to a merger with Disney, to essentially be
bought out
. Similarly, the supposed $150 million value of Henson’s company in 1990 was not necessarily a real accounting of profits, but rather “Disney dollars,” the amount Disney was willing to pay in stock to get Henson. Disney’s own company was unsuccessful for long after his death, which is why his nephew Roy E. Disney installed Michael Eisner’s aggressive—and arguably anti-artist
—
business team in the 1980s.

While artistic businesses can get going to a good financial clip, they require more and more funding as time goes on, and bigger and better projects. I don’t know that there is ever a time when the money-suck
ends
and there is plenty of cash left behind. In
that
sense, I don’t know that art is ever truly “profitable.”
The Gift
certainly implies it isn’t:

Each of the paths I have described is a way of getting by, not a way of getting rich.… No matter how the artist chooses, or is forced, to resolve the problem of his livelihood, he is likely to be poor.
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In the final accounting, Hyde seems to say, art will always cost more than it makes. And unlike the investor, it seems the artist can’t ever stop creating, take his profits, and live on vacation for the rest of his life. Yet, Henson’s career shows us that while he was alive and
working
, an artist—while not technically profiting—can
thrive
when capital is flowing. Jerry Nelson explained that Lew Grade was quite happy to spend money on
The Muppet Show
so that his studio would have something to do. This demonstrates a certain way of thinking about money, an accounting that values
flow
more than the bottom line:

He said, ‘I’ll put up [half] the money, provided you do it in my facility. That’ll do two things,’ he said, ‘that’ll get your people busy, and it’ll keep my people busy.’ Lew Grade was great at that … the art of taking money out of one pocket, giving it to you, then taking it back with the other hand and putting it in the other pocket. That’s big business, man. Thank God for him. He was one of the true showmen. He and his brother. They used to be hoofers.
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