Back from the Writers’ Strike– A Daily Show and This Blog

As you may have noticed, the quantity and quality of posts has suffered since my writers have gone on strike. But like The A Daily Show, we’re back. Fittingly, when Jon Stewart returned to the studio last week, he had some things to say about pricing.

The writers’ strike is mainly around residual payments on internet revenues. The writers want them and the media companies don’t want to pay them. Regardless of who you think is right, the situation has led to some comically absurd situations, many of which revolve around Daily Show content on YouTube. Media giant Viacom claims on one hand that internet revenue isn’t worth anything, while on the other hand claiming that YouTube owes Viacom $1B for copyright infringement.

Stewart points out that the $1.99 fee for downloading episodes from iTunes is not actually revenue, but a “shipping and handling charge.” He also says that watching a show on an iPod is like a promotional sample of cheese, not a portion that anyone would actually pay for. The segment is tongue-in-cheek, of course, but is a humorous way to look at how changing technologies collide with psychological expectations. For example, we accept that movie matinees are cheaper than primetime movies, but we don’t accept that we should pay more for highly desirable movies, despite the obvious economic utility.

Stewart also points out that if Viacom was serious about the value of their content, they wouldn’t have sued for $1B, “clearly a figure they pulled out of their asses. If there were real money on the internet, don’t you think they would have gone with a believable number?” The patent absurdity of the number in this case almost seems like a ploy to give Stewart fodder for jokes. Much less funny, but perhaps more important, many companies publish prices that the market laughs at, and then says “OK, but let’s talk about the real price.” This wastes a lot of time both in preparing prices that don’t mean anything and negotiating deals. It also bleeds away a lot of margin. If your public prices don’t mean anything in your market, it’s time for new prices and/or a new market.

(One nice thing about the Viacom/YouTube dustup is that The Daily Show now has a complete, searchable archive, where you can watch the segment cited above.)

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