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Conan O'Brien teaches economics
Clever famous people find that they can devote relatively small amounts of their time to creating media products that are not only popular but profitable
Conan O'Brien signed off his final TBS broadcast with some delightful words about how he had devoted an entire late-night television career to the pursuit of a "strange phantom intersection between smart and stupid". It's a lovely sentiment, and it describes well the sort of work he's done -- a Harvard graduate unafraid of telling silly self-deprecating jokes from behind a flashlight.
■ O'Brien isn't disappearing from the spotlight. His quirky and very funny podcast has an enormous following (it was rated among the top 20 most-downloaded of 2020) and he's starting a new show in the HBO universe. His production company is expanding its reach with new programming, too.
■ But it is notable that O'Brien, who has been in the cultural mainstream since starting his first TV show in 1993, is done not only with network television but with basic cable, too. His embrace of digital and on-demand platforms is complete.
■ Baumol's cost disease says that wages will rise for certain jobs even when they are no more efficient and have no hope of becoming more efficient, because the people delivering those services have to be attracted away from alternatives. The go-to example is that a string quartet can't perform any faster for an audience today than they could have 100 years ago, but each of the musicians must be paid more now than in the past because their wages have to keep up with inflation -- and with the pay those musicians could have earned by seeking alternative employment.
■ The entertainment mainstream is being shattered into millions of pieces right now. Bruce Springsteen might have lamented that there were 57 channels with nothing on back in 1992, but now the channel choices are literally limitless. Fame is still a great launching point for new content: The other 19 shows in the top-20 podcasting universe are almost entirely composed of people who were already famous or media outlets that already had brand-name status.
■ As the old pipelines for content delivery are being fragmented, the opportunities for content creation flourish. In particular, clever famous people will find that they can devote relatively small amounts of their time to creating media products that are not only popular but profitable. Andrew Sullivan left a major print magazine to start a subscription e-newsletter and now claims to have more than doubled his income to $500,000 a year. A few YouTube creators are estimated to bring in tens of millions a year. Conan O'Brien's podcast is said to generate millions of dollars a year.
■ This puts Baumol's cost disease in a fascinating light: Creative people may well find that they can only create as much material as they used to, but because their transmission and distribution costs have basically evaporated, they may be able to earn as much as they did in the past with less work, or more with the same work. And for others, the act of leveraging fame might convert relatively small investments of time into attractive amounts of income (see, for instance, the "Office Ladies" and "SmartLess" podcasts).
■ This competition, meanwhile, puts still greater pressure on the incumbent media outlets from which many of these creatives obtained their fame. Even the late-night shows (like "Conan") are scrambling for YouTube and TikTok views as they each pull in only a few hundred thousand viewers under the age of 50.
■ No matter what else develops, it's still going to take a program host at least an hour of real time to deliver an hour of content time (obviously, much more if there's additional production, writing, or other overhead involved). But we may well be witnessing a curious moment in which not only is there still ample social status to be obtained from working all-digital, but also a much more relatively lucrative return to be had from doing it.
■ It tells us almost nothing about where fame will come from in the future, and less still about where the farm teams for creative talent will even have economic room to exist. But for certain, we can see that much-coveted jobs like "late-night host" that once benefitted enormously from Baumol's cost disease may well be finding themselves launched into another economic world altogether.