Why The Entertainment Industry Called ‘Cut’ On Manual Payroll

With film sets and other entertainment projects forced to yell “cut” amid pandemic lockdowns, many players across the industry were given a moment to pause and reconsider some of the more analog, inefficient ways of running the show.

Among the most manual of processes today is payroll, a space in which paper checks and timecards remain commonplace. Yet when the health crisis emerged, professionals suddenly resisted the risks of having to fill out and hand off physical paperwork in close quarters with fellow workers on-set. With productions trickling back into operations over the past few months, project team members, from producers to the cast and crew, were eager to find a better way.

That’s according to Cameron Woodward and Naysawn Naji, co-founders of entertainment industry software provider Wrapbook. When it came to payroll, they recently told PYMNTS, it was no longer an option to continue with the legacy methods. “COVID has turned a nice-to-have into ‘this must happen,’” Woodward explained. “It is essential to the core business flow.”

But payroll in the entertainment industry is no straightforward task. On the contrary, between onboarding a different set of professionals for every project to managing the nuances and compliance requirements of union contracts, getting workers paid can be a production in and of itself.

The Shift To Digital

According to Naji, practically every workflow in the entertainment industry has historically been filled with manual processes. While inconvenient, the fact that productions often gather strangers to work together on one project, rarely to reconvene again, meant that staff merely accepted payroll pain points as unworthy of investing in digitization and automation. “Basically, everything you need to work with a human compliantly is paper based in this space,” he said.

And existing payroll technologies are not necessarily equipped to handle the unique needs of the entertainment industry. While any production, from a small upstart commercial production company to an enterprise-level studio, can benefit from automating payroll, larger projects will often require working with unionized workers with very specific rules surrounding contract arrangements, payouts between talent and their managers and agents, and payouts to union-provided benefits like healthcare.

Industry-specific costs like meal penalties and forced calls (entertainment industry-related requirements designed to protect staff and talent well-being) are also not easily calculated, either manually or in industry-agnostic payroll solutions.

According to Woodward and Naji, the pandemic forced producers and other players in the field to prioritize digitization not only to promote compliance and boost efficiency, but also to protect teams against having to physically hand off paperwork or operate close to each other. Instead, managing payroll remotely means safeguarding against any potential health hazards on set.

The Project Economy

While the pandemic may have been the boost the entertainment space needed to digitize payroll workflows, Naji said the shift will likely be long-term. “With the pandemic, we have seen that things culturally have changed dramatically,” he noted. “Everybody was looking for digital solutions. Once that cultural change has happened, generally, things won’t go back to the way they were.”

Payroll modernization may be the catalyst that gets the digitization ball rolling in the production arena. After all, there are plenty of other opportunities to digitize and automate industry-specific points of friction — for instance, in areas like payouts to vendors and craft services. Clients have approached Wrapbook with requests for such functionality, which Woodward said the company is now considering.

As the firm, which recently announced a $27 million funding round, begins to look out into a post-pandemic future, Woodward also noted that there is an even larger potential opportunity to automate payroll — not only for the entertainment industry, but for the project economy at-large.

Indeed, these biggest payroll friction points —  from frequent onboarding of new professionals to adhering to a high volume of contracts —  aren’t only found on a movie set. “We’re staying focused on the entertainment industry, which alone has $200 billion in payments across events, commercials, feature films and television,” said Woodward. “That is fuel for us to create these building blocks and technology to address a much bigger vision of building tools for the project economy.”