I worked in the mailroom at a major Hollywood talent agency after graduating from a top school. Granted, the literal "mailroom" phase of my employment lasted all of a month or two, after which I was promoted to assistant. As an assistant, you're basically a secretary to one of the agents in the firm. Eventually, you prove your competence and rise to the ranks of the training program, in which case you're still doing secretarial work -- but you're doing it for one of the firm's partners. And you're steadily accruing other responsibilities, such as script evaluation, client scouting, studio networking, and so forth. Depending on the agency, your workday is usually a minimum of 10 hours (mine were typically 14 to 15 hour days, and the occasional 20 hour day was not unheard of). The pay was in the $20-30k range.

There were plenty of Ivy League grads in my mailroom class. Even a few MBAs, and a Harvard JD. Landing the mailroom gig at this particular agency was extremely difficult, and the folks playing the "lottery" all could have taken six-figure (or close to it) entry-level jobs elsewhere.

Why did we do it? For no better reason than the fact that "it's always been this way," and "this is the way it is." (Or the more economically rationalized supply/demand explanation: there are 500 bazillion gajillion people lining up at the door to get these jobs, so demand always exceeds supply, and thus wages are low and the work brutal).

For those who really love the entertainment business, and who are ambitious enough to "pay their dues" in the toughest epicenter of it -- the agency world -- it's the best way to get a foot in the door. If you survive the agency meatgrinder, you are highly sought-after among other Hollywood firms: be they studios, networks, production companies, or what have you. It's not unheard of to hit the mailroom at 22, make junior agent by 25 or 26, and be making a very respectable living somewhere by 30. And for those truly ambitious, ruthless souls who go on to be big-time producers or studio heads, you can be making obscene amounts of money in your late-30s to 40s.

It's definitely a "lottery ticket" model, with some echoes of the ancient apprenticeship model thrown in for good measure (all the bigshots in Hollywood were, themselves, in the mailroom back in the day). The model burns out probably greater than 90% of the hopefuls who leap into it. And that seems a pretty inefficient way to find a small handful of Katezenbergs, Geffens, Dillers or Eisners in the haystack.

More important, the model burns through a lot of would-be superstars who simply don't have the tolerance for the indignity, BS, and luck-dependency[1] that comes along with the dues-paying years. These are people who may leave the business and go on to do some pretty amazing things in other industries (tech, for instance). Seems to me that you could still find your Dillers and Katzenbergs in a more tech-style model -- i.e., putting people to work actually making product, rather than answering telephones -- while probably finding a lot more of them in the process.

The problem with the Hollywood hiring model, as it currently exists, is that it selects solely for the most ruthlessly ambitious candidates -- the ones who can survive years of toil in pursuit of a big paycheck. If they are also great thinkers, or innovators, or creative geniuses, that's sort of a secondary consideration. The model gets what it selects for, and often nothing more than that.

[1]Ultimately, what burns out most people isn't the indignity of the work, but the dependency on dumb luck: the fact that there is no guarantee of work in / reward out. You may kick serious ass in your apprenticeship, only to find out that there are simply no spots open at the next level up. (It's understandable that someone who's just spent 4 of the best years of her life as an indentured servant, only to be told that she needs to put in another 4, would opt out altogether.)