Look at it this way: money is how we measure value in our society. With media properties, it's often difficult to determine value up front, and if value were determined up front there would be almost nothing put into production in any medium, because full payment of possible value would be almost prohibitive. Look at the money machine STAR WARS turned into; nobody guessed that in advance, which is why it had no notable stars (except for Alec Guinness and Peter Cushing, and neither were exactly the king of Hollywood at the time) and a relatively low production budget. If George Lucas had known what revenues the property would eventually generate and had asked for all those up front, it never would have gotten made because no one could have afforded to meet the price.
So in media the initial payment isn't the total payment (though it sometimes ends up that way), it's the down payment. Publishers and producers don't "buy" properties so much as place their bets; they secure the cooperation of talent. "Value" isn't determined in advance, but as it accrues, and as the established value of a property increases, so does the amount paid to those who generate it, according to whatever contract is in place. There is the common belief, for whatever reason, that the publisher/producer is the one taking the risk and therefore the rightful end point of all profits. But by choosing to work with them, and the operations they represent, we take a risk too. We are risking that they will make the right decisions along the way to public release, that they will be able to intelligently and fully exploit the property for the fullest short-and-long term profitability. And you know what? More often than not, they don't, even though that's their job.
Wednesday, April 02, 2008
Creators and Entertainment Economics
Steven Grant, a professional comics writer, writes a regular Wednesday column for Comic Book Resources where he discusses a range of things including the comics industry, politics and the wider world. This week, in discussing the Superman copyright case, he talks about a larger truth about the nature of entertainment economics.