Creative Artists Agency: How Agency Address Sets Price
The Fee Is Arbitrary
When Mike Nichols signed with Creative Artists Agency in the late 1980s, Michael Ovitz informed him that his directing fee was no longer $2.5 million. It was $5 million. Nichols, confused, noted that he had not recently made a hit picture, nor had he won an award that would justify such a jump. Ovitz explained simply: “That’s what top directors make at CAA.” The number had changed not because Nichols’s market value had shifted, but because the address had. This was not negotiation. It was price-setting.
CAA did not rise to dominance by representing talent in the traditional sense, onnecting an actor to a role and collecting a commission. Instead, the agency manufactured scarcity by bundling discrete creative assets into indivisible packages. By controlling the top tier of directors, writers, producers, and stars simultaneously, CAA eliminated studio optionality. A studio could not buy the script without the director, or the star without the producer. They had to accept the entire assembly or forgo access to the creative elite entirely. This structural monopoly on assembly allowed CAA to dictate terms, specifically, backend participation structures, that were legally price-setting despite antitrust constraints. The business captured value not merely through the standard ten percent commission on talent compensation, but through a share of gross points negotiated for clients, which the agency then taxed at ten percent as well. When CAA represented forty-five of the top fifty directors in Hollywood by 1990, the studios had no alternative supply. The package became the atomic unit of commerce, and CAA became the sole manufacturer.
The Package as Monopoly Device
Consider the economics of Jurassic Park. The film grossed over one billion dollars, but the critical financial architecture existed long before the first dinosaur appeared on screen. CAA had assembled the creative package, Steven Spielberg to direct, Michael Crichton’s novel as source material, Kathleen Kennedy and Frank Marshall producing, and refused to unbundle any element. Under the old studio system, talent worked as salaried employees; the studio captured all upside. CAA reversed this. The creative team retained fifty percent of the film’s gross participation. CAA, representing the key players, collected ten percent of that fifty percent: ffectively five percent of the total gross, or roughly fifty million dollars from a single theatrical run. This was not ten percent of salary. This was ten percent of ownership.
The mechanism depended on absolute control. CAA maintained a policy of never selling a single piece of material “naked” to a studio. No script without a director attached. No star without a producing partner. This bundling created artificial scarcity. If Universal wanted Spielberg, they had to take Crichton, Kennedy, Marshall, and CAA’s terms. By 1990, CAA represented forty-five of the top fifty directors. No competing agency could assemble equivalent packages. The studios, fragmented and unable to coordinate, had no countervailing power. They could not threaten to develop projects in-house because they lacked the concentrated talent base. They could not negotiate individual elements because the elements were not for sale individually. The package functioned as a legal price-setting mechanism. Because CAA did not own the talent, merely represented them voluntarily, and because the talent agreed to be bundled, the arrangement avoided antitrust violation while achieving monopoly pricing. Studios accepted gross participation deals they had previously fought to eliminate because the alternative was exclusion from the cultural products that defined the decade.
The Six-Month Information Arbitrage
What allowed CAA to package with such confidence was an underappreciated structural advantage: a predictive intelligence operation disguised as a reading habit. The agency maintained subscriptions to over two hundred magazines. Every agent was required to read one hundred titles monthly, ashion periodicals, technology journals, geography reviews, obscure literary quarterlies. The objective was not recreation but pattern recognition. CAA aimed to identify cultural trends six months before they entered mainstream consciousness, giving the agency a lead time on mass taste that studios and competitors lacked.
This was not mere trendspotting. It was the infrastructure of scarcity creation. When CAA packaged Shogun as a mini-series, or convinced Coca-Cola to adopt polar bears as mascots, or pushed Michael Crichton toward dinosaurs, they were acting on editorial intelligence gathered months earlier. The magazine operation created a justification for CAA’s curatorial role. They were not simply brokers connecting buyers and sellers; they were arbiters of what would resonate. This advantage was durable because it required organizational discipline that competitors could not easily replicate. Most agencies lacked the institutionalized reading habits; those that tried could not match CAA’s compounding track record. As CAA’s predictions proved accurate, polar bears, samurai narratives, prehistoric theme parks, top talent gravitated toward the agency not merely for better deals, but for better judgment. The cultural intelligence justified the packaging premium, creating a self-reinforcing cycle: better intelligence attracted better talent, which created better packages, which generated more capital to fund more intelligence gathering.
The Loyalty Ledger
Yet the packaging model rested on a volatile contradiction. The monopoly on assembly required voluntary cooperation from the very talent being commoditized. Writers and directors had to agree to be bundled, to have their creative autonomy subordinated to the package. This required a form of loyalty that could not be contractually enforced. It had to be personally banked.
Michael Ovitz spent years having weekly lunches with Michael Crichton during a prolonged period of writer’s block, earning no commission, simply maintaining proximity and trust. When Crichton finally pitched the concept that would become Jurassic Park, it happened at one of these lunches. The economics of this relationship were paradoxical. From a fiduciary perspective, the hours invested in a non-productive client represented eroded margin and opportunity cost. From a structural perspective, they were essential capital expenditure. If CAA abandoned clients during downturns, the trust-based relationship model collapsed. Talent would defect to competitors or negotiate directly with studios. The packaging power depended on the perception that CAA would stand by clients even when they were not immediately profitable. This was not sentiment; it was a calculated loss leader. The agency had to absorb losses on some clients to maintain the reputation that attracted the top five percent of talent whose scarcity made packaging possible.
Ovitz himself functioned as an economic variable, ot as a charismatic leader in the soft sense, but as a balance sheet of relationship capital. His personal guarantee backed the packages. When he told Mike Nichols that his fee was $5 million, he was drawing on the accumulated credibility of years spent investing in relationships like the one with Crichton. The leadership was the liquidity that allowed the firm to survive the illiquidity of artistic dry spells. Without Ovitz’s personal ledger of trust, the machinery of bundling seized up.
When Packaging Becomes Predation
The model’s success created its own structural tension. As CAA’s packaging power grew, the agency expanded into businesses that threatened the very studios it depended upon for revenue. The Coca-Cola account exemplified this overreach. CAA won the beverage giant’s advertising business, worth five to six hundred million dollars in annual spend, by pitching thirty-five commercials for the cost of seven, utilizing A-list directors and the now-iconic polar bears. McCann-Erickson, the incumbent agency that had held the account for forty years, arrived at the pitch with thirty-five exhausted executives on a red-eye flight. CAA arrived with six people and superior creative execution.
The economic asymmetry was stark, six people versus three hundred, but the strategic implications were dangerous. When CAA began producing commercials, developing television mini-series like Shogun, and essentially functioning as a studio without the overhead, the studios that bought CAA’s feature packages began to view the agency as a competitor rather than a service provider. Eighty percent of CAA’s own staff reportedly opposed the Coca-Cola move, sensing that if studios coordinated against the agency, developing in-house packaging capabilities or forming competing agency coalitions, CAA would lose the structural optionality that made its model work. The packaging power required studios to remain fragmented and dependent. By demonstrating that CAA could replace studios in adjacent businesses, the agency risked triggering the consolidation or coordination that would eliminate its scarcity premium.
The Backend Is the Business
To understand what was truly at stake in these packaged deals, one must look to Lew Wasserman, the legendary agent who became head of Universal. As an agent, Wasserman had negotiated the first gross participation deal for Jimmy Stewart on Winchester ’73, breaking the studio system’s salary-only model. As a studio executive, he spent his tenure fighting to eliminate exactly these participation structures. The history suggested that whoever controlled the assembly of talent could extract ownership stakes; whoever controlled the studios would try to revert to flat fees.
CAA’s innovation was using packaging to reinstall the Wasserman-era participation model despite studio resistance. The ten percent commission on talent salaries was merely the surface business. The real economic engine was the ten percent of gross points. On Jurassic Park, the difference between commission and participation represented tens of millions of dollars. The packaging monopoly forced studios to accept participation structures they had spent decades trying to kill. CAA captured the upside that Wasserman the agent had invented and Wasserman the executive had tried to bury. This was why the bundling was essential. Only by controlling all elements simultaneously could the agency force studios to accept participation rather than flat fees. The package was not a convenience for talent; it was a mechanism for redistributing ownership of cultural output from studios to creators, nd to the agency that represented them.
The Voluntary Monopoly
For all its dominance, CAA’s model rested on a fragile long-term assumption: that Hollywood studios would remain structurally incapable of coordinating to bypass the agency, and that talent would remain voluntarily loyal despite having no contractual obligation to stay. The monopoly was voluntary and therefore precarious.
The entire edifice depended on Michael Ovitz’s personal credibility. If he left, retired, or suffered a reputational scandal, the relationship capital evaporated. The business was not systematized; it was personalized. One major defection, a Spielberg or Crichton leaving and successfully negotiating better terms independently, would signal to other clients that CAA’s value proposition was not essential. The scarcity premium would unravel as talent realized they could unbundle themselves.
More fundamentally, the model assumed permanent studio fragmentation. CAA had risen in part because the breakup of MCA (forced by antitrust action) had dispersed studio power. If studios re-consolidated, if regulatory winds shifted and allowed the formation of entities with the scale to develop in-house packaging, or if the major studios simply coordinated to develop competing agency coalitions, CAA’s pricing power would evaporate. The Lew Wasserman trajectory suggested that today’s agents become tomorrow’s competitors. Studios had once been vertically integrated; they could be again. If they developed internal capabilities to assemble scripts, directors, and stars without CAA’s intervention, the agency became merely a ten-percent tax on salaries rather than a gatekeeper of cultural production.
The business, then, was a bet on stasis. It required that studios remain too divided to coordinate, that talent remain too loyal to defect, and that Ovitz remain central indefinitely. For a decade, these conditions held. CAA manufactured scarcity from independence, bundling autonomous creators into monopolistic assemblies that legally price-set while technically representing. They captured the backend of the culture industry by controlling the frontend of assembly. But the monopoly existed only so long as the bundled elements agreed to stay bundled, nd so long as the buyers remained too weak to build their own assembly lines.
The Service Provider Becomes the Competitor
The Coca-Cola account represented more than diversification; it was a declaration of structural independence that threatened to collapse the very ecosystem CAA depended upon. When CAA pitched the beverage giant, they did not merely offer creative talent, hey offered a fully realized production infrastructure. Six CAA employees coordinated the campaign while outsourcing animation to Rhythm and Hues, maintaining control of all creative and editorial decisions. McCann-Erickson, the incumbent that had serviced the account for four decades, deployed three hundred people. The disparity revealed CAA’s operational efficiency, but it also revealed a dangerous ambition. By demonstrating that they could deliver finished cultural product, commercials, branding, narrative content, without studio involvement, CAA signaled that the packaging model could bypass the studios entirely.
This was the overreach that eighty percent of CAA’s own staff reportedly opposed. The studios that purchased CAA’s feature packages were simultaneously competing with CAA for advertising revenue and production capabilities. When an agency sells a package to Universal, it functions as a vendor. When that same agency produces thirty-five Coca-Cola commercials using the same directors and production methodologies it reserves for feature films, it functions as a rival studio. The threat was not merely economic; it was strategic. If the major studios perceived CAA as a competitor rather than a service provider, they possessed the collective incentive to coordinate against it. They could develop in-house packaging divisions, poach CAA agents with promises of equity, or simply refuse to accept packaged deals until the agency retreated from ancillary businesses. The Coca-Cola victory, for all its tactical brilliance, violated the cardinal rule of monopoly maintenance: never provoke your customers into recognizing their shared interests. By winning the shootout with McCann-Erickson, CAA demonstrated that it could replace traditional agencies and, by extension, traditional studios. The polar bears became a symbol not just of cultural prediction, but of predatory expansion.
The Certainty Problem
Beneath the Coca-Cola strategy lay a deeper tension between the packaging model’s need for pre-commitment and the nature of creative work itself. Packaging required CAA to assemble all elements, script, director, star, producer, before presenting the bundle to studios. This assembly demanded certainty. CAA needed to know, months or years before cameras rolled, that Spielberg would direct, that Crichton would deliver, that the elements would hold together. Yet creative talent often does not know what it wants to make until deep into the development process.
Consider the years Ovitz spent lunching with Michael Crichton during his writer’s block. Crichton was not withholding product; he was searching for it. The creative process involves false starts, discarded premises, and the gradual emergence of concept from chaos. If CAA had attempted to package Crichton during those barren years, committing him to a specific project with attached talent, the package would have contained a hollow core. Spielberg might have committed to a Crichton project that Crichton could not deliver, or worse, Crichton might have delivered work he did not believe in to satisfy the package’s requirements. The Jurassic Park concept emerged organically, over years of conversation, without the pressure of pre-commitment. This was the paradox: CAA’s power derived from bundling scarce resources, but the scarcity itself derived from the autonomy of the talent. If CAA forced talent into rigid packages too early, it risked producing defective product or destroying the relationships that made the talent scarce in the first place. If it allowed too much flexibility, the package lost its scarcity premium. Studios could cherry-pick individual elements or wait for talent to become available unbundled. The packaging monopoly required the suspension of creative uncertainty, a bet that artistic inspiration could be scheduled and bound to contract before it had fully formed.
The Magazine Index
What allowed CAA to navigate this uncertainty was not merely Ovitz’s personal touch but a systematic information advantage that is easy to describe and difficult to duplicate. The subscription to two hundred magazines was not casual browsing; it was an indexing operation. Agents were required to read one hundred titles monthly, cutting and filing articles across categories, ashion, technology, geography, industrial design, obscure military history. The goal was pattern recognition: identifying which editorial decisions in niche publications would cascade into mainstream taste six months later.
When CAA packaged Shogun or positioned the Coca-Cola polar bears, they were acting on intelligence gathered from this reading room. The polar bears emerged from observing editorial trends in conservation photography and Nordic cultural imagery months before they became advertising icons. The dinosaur resurgence that fueled Jurassic Park was visible in paleontology journal coverage and museum exhibition schedules long before it entered studio development meetings. This six-month lead time was CAA’s justification for its curatorial premium. They were not merely negotiating deals; they were predicting cultural demand before supply knew it existed.
The durability of this advantage lay in its organizational discipline. Any competitor could subscribe to two hundred magazines, but few could enforce the reading habit across their entire organization. Most agencies lacked the institutionalized filing systems and the cultural intuition to translate editorial observation into packaging decision. As CAA’s predictions proved accurate, Shogun dominating television, polar bears entering the collective consciousness, dinosaurs becoming the highest-grossing film property of its era, the advantage compounded. Top talent gravitated toward CAA not simply for better contracts but for better judgment. They trusted CAA to place them in projects that would resonate because the agency had demonstrated an almost uncanny ability to see around cultural corners. This trust was the lubricant that allowed the rigid packaging machinery to function. Talent accepted bundling because they believed CAA’s cultural intelligence would protect them from being packaged into failures.
The Defection Mathematics
Yet this trust was voluntary and therefore mathematically fragile. The model assumed that talent would remain loyal as long as CAA delivered superior deals and cultural positioning. But loyalty in Hollywood is a function of comparative advantage, and comparative advantage can evaporate quickly. The concentration of forty-five of the top fifty directors at CAA created the scarcity premium, but concentration is a double-edged statistic. It implies that the departure of a small number of key clients could trigger catastrophic devaluation.
If Spielberg had defected, if he had left CAA to negotiate directly with studios or to form a competing agency, the mathematics of packaging would have shifted immediately. Studios suddenly would have possessed an alternative supply of A-list direction. They could have refused CAA packages that included inferior directors, waiting instead for Spielberg’s availability. The scarcity premium would have leaked. Other directors, observing that Spielberg had successfully bypassed CAA’s ten percent tax and retained full participation in his gross points, might have followed. The self-reinforcing cycle that built CAA’s dominance, top talent attracting top talent, would have reversed into a self-reinforcing dispersion.
The fragility was not linear but exponential. One defection would not merely reduce CAA’s market share by two percent; it would reduce its pricing power by undermining the monopoly on assembly. If a director of Spielberg’s caliber proved that studios would deal directly with talent, that gross points could be negotiated without agency packaging, the entire backend revenue stream came into question. CAA’s economics depended on the assumption that talent could not effectively coordinate with studios without intermediary control. A high-profile defection would demonstrate that they could. The forty-five of fifty statistic would become forty-four of fifty, then forty, then thirty-five, and with each departure, the studios gained optionality. The package would cease to be the atomic unit of commerce, reverting to the individual elements that studios preferred to negotiate separately.
The Wasserman Warning
History provided a blueprint for exactly this kind of structural betrayal. Lew Wasserman, the MCA chief who had once negotiated the first gross participation deal for Jimmy Stewart on Winchester ’73, later became the studio executive who worked hardest to eliminate such participation structures. As an agent, Wasserman had proven that representation could extract ownership stakes from studios. As a studio head, he proved that the same structural insight could be used to crush representation. He had switched sides when the economics favored ownership over agency.
Wasserman’s career suggested that CAA’s vulnerability was not merely external but imitable. If studios could hire agents away, and they could, offering equity stakes in production companies and studio executive positions, then studios could internalize the packaging function. The Coca-Cola account had demonstrated that CAA could function as a studio without studio infrastructure; the reverse was also possible. Studios could hire CAA’s agents, subscribe to their own two hundred magazines, and develop in-house packaging capabilities that eliminated the need for the agency middleman. The Paramount antitrust case of the 1940s had forced the vertical disintegration of the studio system, creating the conditions for CAA’s rise. But antitrust winds shift. If regulatory constraints on studio consolidation loosened, or if studios simply coordinated informally to develop competing packaging coalitions, CAA’s structural monopoly would face organized opposition rather than fragmented buyers.
The Backend Vulnerability
At the center of this fragility lay the assumption that backend participation, gross points, would remain available indefinitely. CAA’s revenue model depended on the ten percent of gross points, not merely the ten percent of salaries. If studios reverted to flat-fee compensation, or if they successfully lobbied for regulatory changes that classified packaging as anti-competitive tying arrangements, CAA’s economics would collapse to the standard commission model.
The studios had every incentive to eliminate gross participation. It represented a transfer of ownership from capital to labor, from studio balance sheets to talent ledgers. CAA had forced this transfer by controlling the assembly of talent, but studios could resist through coordinated action. They could refuse to accept packaged deals, instead offering direct development deals to talent that bypassed agencies entirely. They could cap participation percentages, or shift to net-profit definitions so Byzantine that talent and their agents could never collect. If the major studios, Sony, Fox, Universal, Paramount, recognized that their individual competition for CAA’s packages was enriching the agency at the expense of all studios, they possessed the structural ability to coordinate a boycott. The fragmentation that CAA exploited was a choice, not a law of nature. The Coca-Cola overreach provided the catalyzing event that could transform individual studio resentment into collective action.
The Personal Ledger
Michael Ovitz himself represented the ultimate concentration of risk. The relationship capital that allowed CAA to absorb years of non-productive lunches with writers like Crichton was not transferable. It could not be securitized, sold, or bequeathed. When Ovitz eventually attempted to convert this capital into liquidity, accepting the presidency of Disney in 1995, he discovered its illiquidity. The relationships walked out the door with him, but they could not be monetized within a corporate structure that demanded quarterly returns and systematic processes rather than personal ledgers.
At CAA, Ovitz had functioned as a bank of trust, extending credit to talent during their unproductive periods with the expectation of repayment during their blockbuster phases. This banking function required autonomy and long time horizons. Within Disney, or within any publicly traded entity, such autonomy was impossible. The personal ledger that had made the packaging model viable could not survive institutionalization. When Ovitz left CAA, the agency did not merely lose its leader; it lost its collateral. The trust-based relationships that had kept talent voluntarily bundled began to fray precisely because the guarantor had exited. The defection mathematics accelerated. Without Ovitz’s personal credibility to backstop the packages, studios regained negotiating leverage. The monopoly on assembly, always voluntary, began to dissolve as talent recognized that the specific personal relationships that had justified their loyalty had been severed.
The Reversal Scenario
In the end, CAA’s dominance was a bet on the permanence of fragmentation. It assumed that studios would remain too divided to coordinate, that talent would remain too loyal to defect, and that the regulatory environment that had broken up the old studio system would prevent the formation of new vertical monopolies. These were not impossible assumptions: he studios had competed viciously for decades, talent had proven sticky, and antitrust enforcement had remained consistent. But they were temporary conditions masquerading as structural facts.
The bear case was simple and brutal. If three major studios agreed to simultaneously develop in-house packaging divisions, poaching key CAA agents and offering direct gross participation to top talent, the scarcity premium would evaporate within eighteen months. If a single A-list director demonstrated that direct studio negotiation yielded better terms than agency representation, the defection cascade would begin. If antitrust regulators turned their attention from studio consolidation to agency packaging, recognizing that bundling forty-five directors constituted a restraint of trade, the legal foundation would crack.
CAA had captured the value of cultural production by controlling the assembly line while owning none of the factories. But assembly lines can be built. Studios possessed the capital to construct them; they lacked only the coordination. By expanding into Coca-Cola’s advertising business and television production, CAA provided the motive for that coordination. It demonstrated that the service provider had become the competitor, that the agent had become the owner. In doing so, it risked triggering the consolidation that would render the packaging model obsolete. The polar bears that danced across Coca-Cola’s advertising were harbingers not just of cultural trends, but of strategic overreach. They represented the moment when CAA stopped selling scarcity and started selling substitution: product the studios could not accept indefinitely.
The model persisted only so long as the studios failed to recognize their shared interest in breaking it. CAA’s genius was in making its dominance appear inevitable, in convincing both talent and studios that the package was a natural law rather than a negotiated arrangement. But natural laws do not depend on the weekly lunches of a single agent. They do not require two hundred magazine subscriptions to sustain them. The moment the studios recognized that the package was a choice, that they could choose to build their own assembly lines, that they could choose to deal directly with talent, that they could choose to coordinate, the ten percent of gross points would revert to the balance sheets of capital, and CAA would become what agencies had always been before: matchmakers in a market they did not control, collecting their commission and hoping the dinner was good enough to ensure the next referral.
The arbitrage was operational as much as cultural. When CAA serviced Coca-Cola with six employees against McCann-Erickson’s three hundred, the disparity revealed not merely creative superiority but structural predation. CAA had stripped the account of the bureaucratic sediment that defined traditional agency work, account executives, layers of creative directors, focus-group intermediaries, replacing it with direct control. They outsourced execution to Rhythm and Hues for the animation, but retained editorial and creative authority, functioning as general contractors who owned the client relationship while renting the labor. This was the feature-film packaging model applied to thirty-second spots: own the scarce resource (the creative vision), commoditize the execution (the animation, the production), capture the margin.
For the studios watching this unfold, the mathematics were terrifying. If CAA could deliver $500 million in annual advertising spend with six people, it could theoretically replicate the development and production functions of a major studio with a fraction of the overhead. The polar bears were not merely mascots; they were proof-of-concept that cultural production required neither the studio’s soundstages nor their development slates. When CAA packaged Shogun as a mini-series, it demonstrated that the agency could originate, develop, and deliver long-form narrative without studio participation in the early stages. The studios were being shown, project by project, that their infrastructure, their lots, their executives, their distribution apparatus, was increasingly obsolete in a world where talent and packaging lived elsewhere.
This is why the Coca-Cola victory represented an existential error. By proving that CAA could replace studios in adjacent industries, Ovitz provided the studios with the coordination mechanism they had previously lacked. Before Coca-Cola, each studio viewed CAA as a necessary evil, a tax on the talent they needed. After Coca-Cola, they could view CAA as a shared threat to their core business model. The coordination problem shifted from prisoner’s dilemma to common interest. If CAA could produce commercials and mini-series, it could produce features independently, becoming a studio in all but name. The only thing preventing this was CAA’s reliance on studio distribution and financing: reliance that was itself a choice, not a technical constraint.
The fragility of the forty-five-of-fifty statistic operated similarly. Concentration created the monopoly, but it also created a knife-edge stability. The defection of three directors, six percent of the top tier, would not merely reduce CAA’s market share; it would destroy the scarcity premium itself. Once studios could point to working A-list directors outside the CAA umbrella, they could credibly threaten to refuse packages. “We have Spielberg,” CAA could claim. But if Spielberg left, and took with him the proof that studios would negotiate directly with unrepresented talent, the package became a preference rather than a requirement. The difference between forty-five directors and forty-two was not arithmetic; it was the difference between monopoly and competition.
This was the Wasserman warning in historical form. When Wasserman moved from agent to studio chief, he demonstrated that the skills of packaging were portable, that the boundary between representation and ownership was permeable. CAA assumed that talent loyalty would prevent this migration, that the relationships Ovitz built would lock the talent in place. But loyalty in Hollywood has always been a function of comparative pricing. The moment a studio offered a director not merely a fee but equity in the underlying intellectual property, bypassing the agent’s ten percent entirely, the relationship model faced a market test it could not survive. The magazine index, the weekly lunches, the packaging discipline, ll of it was designed to prevent this market test by making CAA’s value seem indispensable. But indispensability is a marketing achievement, not a structural fact. And marketing can be countered.