[opendtv] Re: Analysis: Broadcast TV Faces Struggle to Stay Viable
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 4 Mar 2009 12:00:18 -0500
Craig Birkmaier wrote:
> This is not a political agenda Bert. It is reality. These people
> are not going to take pay cuts. They will cut supply to keep the
> prices up, which is exactly what has happened to prime time TV.
Who are "these people" you refer to? The actors? I'm talking about the
overpaid actors. If TV production revenues go flat or drop, the actors
will only have the choices of taking pay cuts or getting out of the way,
Craig.
This is very similar to what the US auto industry is up against. In the
past, the US buying public was perfectly happy buying up all the obscene
SUVs and trucks Detroit could make. Those vehicles were just like the
overpaid actors. They brought large profit margins, just the ticket for
corporations with myopic vision. And as long as the market bore those
prices, Detroit was perfecly justified in cashing in. (Although the
corporations should have had a longer view, getting ready for the
inevitable gas price increases before it was too late.)
Now suddenly, demand dropped to zilch for those vehicles. Detroit can
either wither up and die, which might happen regardless, or it can
adjust itself to the new realities post haste.
TV drama production is having to adjust in the same way, as their ad
revenues have suddenly plummeted. You claim "they are not going to take
pay cuts." That's the part I find absurd.
> Why do the studios put up with this?
>
> Because the rewards are so high for the projects that succeed,
> and they will get most of their investment back - eventually -
> with secondary distribution.
Yes, and that's exactly how it's supposed to work. As long as the
project reaps big rewards, in a time frame the investors deem adequate,
it is perfectly fair for the actors to demand as much as the market will
bear. When that equation doesn't work out any longer, YOU call the model
"broken," whereas I'm saying, it's just due for an adjustment. Just the
way things are supposed to work.
You seem to fall in this trap many times. Business is supposed to charge
what the market will bear, Craig, and that includes the pay actors
demand. Of course it seems obscenely high, but if their talent results
in huge sales, then it's totally justified. Ditto goes for the guys
operating the consoles. As long as the govt isn't propping up their
incomes, it's all fair.
Bert
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