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Today’s chat combines two of my interests: fintech and entertainment.

I have previously spoken to the founders of a dialect-based streaming service and a digital content production studio in India. Both of those conversations focused on the entertainment world's business and product sides.

Today’s chat with Wrapbook’s CEO, Ali, is about the administrative side of the entertainment world. The cast and crew for movies and shows are paid for their work by the production companies. Wrapbook has built a payroll offering specialized for Hollywood. Under the hood, it creates a professional graph of actors, producers, agents, and projects.

“Our mission is to improve the prosperity of the project economy through better financial services,” Ali told me.

Wrapbook in the Hollywood sense

I thought the company was named after directors saying, “Let’s wrap it up!” to end shooting for the day.

I was wrong!

Ali said, “At the end of production, there’s a physical binder that gets created—it’s called a Wrapbook. In that binder, you put all your onboarding documents, payroll documents, and receipts. The company is named after that book because we're replacing it.”

Wrapbook, the company

In Hollywood, the studio or production company is in charge of everything from start to finish, whether a show, movie, or commercial. Each project has hundreds of people working on a project-by-project basis.

So what does Wrapbook do?

“Wrapbook makes paying cast and crew seamless, smart, and secure,” Ali told me.

They are digitizing the physical Wrapbook.

They have two types of users.

Production companies: “We onboard and handle timesheets, wage calculations, payments, insurance, and termination through Wrapbook. We also provide amazing reporting, production accounting, and integrations into the major accounting solutions to make production accountants’ jobs a breeze”, Ali said.

Cast and crew: “We make their lives easier by giving them profiles that follow them from job to job, so they’re not constantly filling out the same tax forms for each new project.”

Here’s what he thinks about their mission :

“We provide tools to free both sides to focus on their craft of telling compelling stories! We want to empower them to create amazing narratives that move humanity forward—it’s deeply powerful.”

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State of software adoption in Hollywood

Ali told me to picture a pyramid. The top of that pyramid is a consumer watching a movie. As you move down the pyramid, there are steps to get to a movie or show—coming up with an idea for a movie, writing the script, assembling your crew, shooting it, and editing it.

He told me, “The closer you move to the consumer, the more investment has been historically in technology. As you get farther away from the consumer—towards the production of that film—there is a gap in investment in technology, and the processes start to look more similar to how films were made in the 20th century.”

He says the back end of production is very manual—paper timecards and hiring people to chase paperwork.

“Without software, you end up re-typing all the information in a hundred places. A budget for a movie can be a hundred million dollars, and figuring out how much you spend in a week is complicated. It’s hard to offer better benefits to your workers.”

Need for a vertical payroll solution

It’s easy to wonder what is so special about Hollywood payroll.

“The only people who ask this question are from outside entertainment,” Ali told me.

Fair

On horizontal payroll providers: “Imagine using an existing vendor where you have to hire and terminate a hundred percent of your employees weekly. Everything would break. There’s also the challenge of paying people according to union rules specific to Hollywood,” he said. “You need to have the payroll company calculate the wages, the residuals, the pension, and health, and only entertainment-specific payroll companies can do that.”

Union contracts in Hollywood

“Union agreements define how production companies pay cast and crew. Most of the industry is unionized. For every vertical, there are agreements set up by unions. Production companies sign the agreements before working with the members and becoming signatories”, Ali told me.

I was surprised to learn about how these contracts work.

Detailed: “If you travel, your wages change; if you stay overnight, your wages change. If you skip lunch, your wages change. If you shoot outside the 30-mile radius around LA, your wages change”, he said.

Offline: “Historically, you hired these expert paymasters who’ve been doing it for 15 years—and they have specialized knowledge. It’s hard for anyone to calculate this stuff because the agreements are not online. We hired the people who wrote the contracts and the paymasters who have been doing this for 15 years and paired them with engineers to build software.”

Relationship with the users

The software that full-time employees use to access pay stubs and benefits is tied to the employer.

Wrapbook doesn’t have that dynamic.

They create relationships that work across projects and companies and have a flywheel effect!

Acquisition: “When we win a company, we win all their shoots. For each shoot, hundreds of workers get onboarded and create a profile. We send their W2 and deliver them pay stubs. Our profiles make it easy for workers to track all the jobs they’ve done in a year.”

This means both sides have an ongoing relationship with Wrapbook that transcends the projects they got onboarded on for the first time to use Wrapbook.

Engagement and growth: “Workers might get paid by multiple production companies through Wrapbook, which is acting as the employer of record. When both parties move on to the next project, they can use us without going through the sign-up and onboarding again,” he told me. “As more companies join Wrapbook, they’ll find that many of their crew are already set up to be paid.”

Differences between theatrical and streaming projects

I asked if the worker pay and workflows differ based on whether the movies go on Netflix versus linear TV.

On pay: “They're under different union agreements, and the people involved have to negotiate with different studios. You have different contracts based on budget sizes”, Ali said. “A web of rules determines how much someone is owed based on the medium, how it's distributed, the budget, and where it's shot.”

They have rolled out a widget on their website to help producers understand what agreements they might be accountable to.

On workflows: “The majority of the workflows are the same. If you’re getting on-boarded for a second time, we already have your banking info saved in your profile. It's just a matter of incorporating the terms of your employment contract for the new project. If you have an agent, we confirm the percentage of the talent’s income that goes to the agent and split the wages we send.”

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Go-to-market and creating a network

I was curious about how Ali thinks about market segmentation and how they build what VCs would call a “market network.”

Ali explained: “When you think about entertainment, there are films, tv, live events, and commercials. And there are enterprise, mid-market, and SMB customers. We serve SMB to enterprise customers across all four segments, but we have mostly focused on film and commercials. We aim to create a critical mass of production companies & workers using Wrapbook profiles before focusing on other verticals.”

This is how they create density in each segment and how they build the graph and generate referrals. The more overlap, the less likely a worker or production company will churn off.

The promise of strategic assets

They have a direct deposit relationship, which is the holy grail in fintech.

Direct deposits: “We facilitate payments to the cast and crew, mostly by direct deposit. You can do a ton on the payment rail and underwriting sides. We aim to win production companies and offer a host of financial services to them.”

He further said, “Today, we offer payroll and production insurance, which is like your standard GL insurance. In the future, we will continue to bundle financial services for both sides.”

I asked how they could leverage their graph between cast, crew, companies, and agents.

Graph: “There's no LinkedIn for the crew. We could provide reviews to help workers and production companies understand each other better. Finding extras is a challenge. If you’re shooting a scene in a supermarket, and you need to hire 40 people to pretend to be shoppers in a single day—it’s not always that easy! So this is not something we touch on at all, but you can imagine that if you continue to build a graph, you could make that kind of thing easier. People could signal that they’re available for work. They could say, “I have worked on these sets.”

Exciting ideas.

Company-building

Focus: “I believe in maintaining the smallest surface area possible to hit our goals. I always think of things as a series of unlocks. We ensure we fully solve a pain point before we go on to the next. Payroll is a wedge into many financial services, and entertainment is one market within the project economy.”

Balancing startup and Hollywood DNA: “We have your traditional Silicon Valley product managers & engineers and a roster of industry experts like Paul Schoeman, Steve Dayan, and others from the entertainment payroll industry,” he said.

Scaling: “It requires a huge openness to change. The first question is if a person desires change. The second question is if you can create a system that supports individuals to scale while up-leveling the organization as needed. We are a hundred-year movement.”

“Every month, I ask new employees what prosperity means to them and hear about wealth, time to follow one’s dreams, security, happiness, etc. Prosperity is more than money - in many ways, it’s freedom from money,” Ali said in the end.

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