How to price cultural stuff

Tricky tricky Dr. Lena. In her discussion of the great Canadian post-Woodstock, train-tour extravaganza, she asks the question: how should we price cultural stuff?

There are two main ways, though we should frankly see both as conventions. The first is cost-plus, as she rightly points out. The ‘plus’ is something to fuss about, and how much to pay artists does just regress the problem back into costs. In other words, deciding an appropriate ‘cost’ for artists reproduces the problem. Artists may say, well, “pay me cost-plus, where cost is expenses to get out there, lodging, time-for-my-talent.” And then we say deciding an appropriate ‘cost’ for time-for-my-talent reproduces the problem. And so on.

Which leads to the second method, something like ‘what the market will bear.’ In practice, this means what people are willing to pay, combined with what you’re willing to accept. But – the world doesn’t come with supply-and-demand curves attached. Most markets are not totally variable-priced markets – markets where every price is individually negotiated. Capital markets are exception more than rule, and even when organizations do try to achieve this ideal, we think they kind of suck (I’ve long thought it would be fascinating to walk down the aisle of an airplane in flight surveying passengers about how much they paid, then making your results public. And by fascinating I mean riot-inducing.)

So, the interesting part is in how the theory of ‘what the market will bear’ meets the practice of ‘how much do we charge for this concert/album/art?’ And all of JL’s subsequent discussion is indeed the practical implementation of this second strategy.

Of course, this doesn’t answer her question, which is, what’s the appropriate comparable: 1) compare by artist?; 2) compare based on format?; or 3) compare based on venue? My real answer to that specific question is, I have no idea. It certainly appears that the concert organizers are pushing for ‘based on venue’, while some people recognize ‘based on artist’. I would say that the ‘based on format’ is harder, since the format is the unique part.

To get more general, let me hypothesize that comparables are more likely to be based on things that are, well, comparable. A CD of a totally unique band with a totally unique sound would be more likely to be priced based on ‘other CDs’. Outsider artists doing unique photography would be compared with other outsider artists (rather than other photographs). This is certainly an empirical question, but there’s my stake in the ground.

There is still a paper or book or something to be written about baselines, but this is not it. My nephew (who loves Mr. Krabs from Spongebob) will tell you that you need money to buy one of his toy cars from him, but the amount of money you need is incomprehensible. It’s all ‘coin money’ to him, regardless of whether it’s 3 dimes, two quarters, or 20 pennies – he has no baselines and so no means by which to compare.

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