From the Guardian
The city’s festival is vast, exuberant and intoxicating – and a giddy opportunity for price gouging that almost every business in town takes advantage of. It is the perfect capitalist model: the owners of assets such as hotels and restaurants skim off large profits, while the people who make those profits possible – the performers sweating in the city’s aircon-dodging venues – walk away penniless.(1)
Take the Ibis, a budget hotel, in the city center. It makes no bones about its “dynamic” pricing model, with a digital screen facing the street showing the latest shocking room price updates. Last week it was like the Shanghai stockmarket, just with soaring prices rather than collapsing ones. I don’t recall the exact figure, but on the Saturday it was asking above £230. This for a hotel that charges £35 a night for advance bookings at other times of the year.(2)
Not far from the Ibis, I was lucky to get a seat for one of the triumphs of this year’s festival, a theater production called 1972: The Future of Sex. It’s the third time Wardrobe Ensemble has played at Edinburgh, and even after great reviews and sold-out performances, it will barely cover its costs.(3) One of the group’s actors, Ben Vardy, told me: “We broke even in our first year, and made a small loss in our second. We will turn a small profit this year because it has been very, very successful. But when I say profit, I mean under £100 each.”(4)
The business model for the creative industries is broken. For every performer at Edinburgh working for nothing, read musician on Spotify or writer on the net.(5) Providers of content make peanuts, while the controllers of the infrastructure, such as Google, walk away with extraordinary profits.(6)
It was ever thus, some might argue, although the internet has allowed businesses to extract profits with a precision previously not possible. How can we transfer some of the wealth grabbed by, say, hotels in Edinburgh and hand it to the people who generated it? A city-wide tax on hotels and restaurants during the festival, the money redistributed to performers? Utopian, probably, and in any case illegal under our tax regime.(7)
(1) Well, yes, if you can run a business where you make money as a result of people who are prepared to work for nothing, that is.
(2) What else is it going to do? Hotels across the country vary their prices based on demand. London is cheap at weekends, the Cotswolds cheap on weekdays, coastal places rise in summer.
(3) Maybe if you're selling every ticket, you need to consider raising your prices?
(4) So clearly, they recognize that it doesn't make much money, but keep on doing it. Maybe like lay preachers and people who sing in choirs, it's more about doing the thing for fun. Of course, the other thing in all of this is that these festivals are more about business than pleasure. You hold a festival, you can get various media people from the BBC or C4 to take a trip to the festival to see your show, maybe be impressed with your work and commission you to write something for them, for real money.
(5) The business model isn't broken, because Edinburgh has hundreds of shows being put on. Spotify has 200,000 songs uploaded every day. There's no shortage of people making stuff, which is all we want. And historically, going back to 1980s synth bands, 1930s dance hall bands or 19th century choir festivals, almost no-one made money. People mostly did their thing for pleasure and to perhaps make some beer money. The change today is that people are now doing this with making their music globally available and making a few quid from YouTube adverts. The people who are most upset about this aren't those people but the old gatekeepers of promoting artists in the old media, and the artists who had the big company backing. They really don't like that all these small artists can have access to distribution and sell product instead of them.
(6) Google? I thought this was about Spotify? What infrastructure do Google control? Not the internet, the world wide web, the fibre-optic cabling or any of the domain registration stuff that makes up the net. Google have mostly been rather unsuccessful with making money off artists. Their profits come from people searching for funny cat videos and getting served an ad.
(7) You don't even need anything this complicated - you just charge business rates to hotels that get a financial benefit, and charge the local people who get the benefit of art on their doorstep and spend that on the festival, which is what Edinburgh does already, to the tune of something like £4m per annum.
Debate Magazine
