Price Discovery ...in acting

A simple principle that is surprisingly poorly understood by the public at large is the basic concept of Price Discovery.

It’s a favourite lens of mine when it comes to viewing trends and understanding what’s going on in markets undergoing disruption.  It’s not always clear that Price Discovery is the dynamic in play, but not considering it is a mistake as it leads to what I call “the frustration of unexplained events” - where those affected by change are unable to detect the pattern of cause and effect with regards to that change, and therefore feel powerless, frustrated, angry.

I heard an actor on NPR bleating about how terrible the industry is today, as just a few years ago bit-part, middle-of-the-road guest stars on everyday TV shows could make incomes of $600-700k per yearr but now make just a fraction of that nowadays.




Usual stuff was blamed:   evil studios are screwing actors.  It’s not fair that these hard working artists (who do a handful of spots a year) aren’t being paid in the top 1% of Americans any more and are having to make do with merely $100-200k per year (hmm… tell that to the laid off auto-workers).  Damn user-generated-content and reality tv is to blame!

I wonder if some of this is possibly the case, but not in the way the actor being interviewed meant.  I wonder if part of the massive restructuring the media industry(ies) is(are) undergoing this last last few years, and for the next few years, is price discovery in talent.  If so perhaps these bit-part, second-string actors just aren’t worth that much in a more open marketplace.

It’s not just that show budgets are lower so the demand side of the market for these B & C list players has contracted.  It’s that the supply of people willing to work for less has ballooned.  What reality TV and the YouTube! culture have done is make people feel like a career on the screen, celebrity, is within reach for them.  They’re prepared to give it a go.  $600-700,000 per year for a few small acting gigs is an awful lot of money.  I am not surprised that D listers step up to do this, that more every-day folks from middle America want their shot of screentime.

The truth is that there are a lot more people out there ready to take $100-200,000 per year for the odd guest-star spot on a TV show.

To the artists learning to live on low six figures not high six figures: maybe the audiences are just “not that into you”.  If they were the market would demand your presence and you’d get paid more.

I’ll be posting this week about media upheavals.  One point I’ll touch on is that if you cannot command payment for what you produce as an artist or content creator, either in cash or in surplus attention that you can monetize through advertising or in other ways, then what you have produced just isn’t valuable.  Literally.  People don’t value it.  If you cannot even get people to give you, at the very least, more attention that it takes to merely consume the content you produce, then you have nothing.  Trying to use government and regulation to force that transaction is doomed to failure.  Going on NPR to moan about how as an actor that didn’t make it to the big leagues you cannot continue to live a lifestyle the majority of Americans only dream about, for a few days work per year, isn’t going to be all that successful either.