Streaming services, like Netflix, might be ruining Hollywood's star culture, but they're doing it brilliantly, said ex-powerhouse agent Michael Ovitz, whose talent agency effectively controlled Hollywood for much of the 1980s and 1990s.
"When [Creative Artists Agency] was at its apex, we probably had about 50 actors and actresses that could actually get content made. They could read the yellow pages and people would go see it," Ovitz said Tuesday on CNBC's "Halftime Report." "These days it's a different story."
Once known as the most powerful man in Hollywood, Ovitz co-founded Creative Artists Agency with partner Ron Meyer. The firm recruited and managed such star-studded talent as Steven Spielberg, Martin Scorsese, Meryl Streep, Arnold Schwarzenegger, Morgan Freeman and Robert DeNiro, among many others. After decades as a power broker, he became president of Disney, but was fired shortly after amid tension with former Disney CEO Michael Eisner. Since his departure from Disney in the late '90s, Ovitz has dabbled as a private investor in Silicon Valley.
Ovitz said Silicon Valley, which he refers to as "up north," invokes the same feeling he had when he founded CAA in the 1970s.
"It is flush with really smart men and women. Everybody's can do, it's wildly collaborative, the economy's really good. It has everything — everything you need to make the perfect storm. And everyone up there is trying to do the right thing with really unique ideas. For me, I'm like a kid in a candy store up there," he said.
And the disruptors most impacting Ovitz's industry are media companies, like Netflix, which are capitalizing on changing viewer habits. Now that everything is on demand, there is a higher volume of more accessible content, which renders Hollywood stars a bit less relevant.
"You surely look around and ask yourself who's left out there. For every Jen Lawrence or Zoe Saldana who are still big stars, we've lost the whole star system that we had," he said.
And while Ovitz says he hopes Hollywood's dominance isn't over, he did not hold back from giving credit where credit is due. He called Netflix's chief content officer, Ted Sarandos, "more powerful than almost anybody in history."
"They have infinite development money, they can go to any creative person they want. They have ... pretty close to free distribution," he said.
"What they have that's technically more important is that they have all the data. They know what you like, they know what everyone likes so they can manufacture programming around the data. I think its brilliant what they're doing," he added.
Ovitz is now promoting a new memoir, "Who is Michael Ovitz?" which details "a story of three valleys" — his childhood home, the San Fernando Valley, Silicon Valley and "a Valley I'd dug for myself," according to The New York Times.