The Frustrated CFO

Price of a Digitally-Published Word

Some topics simply cannot let you be.  They are just way too potent.  For example, some time ago, in Part I of my Arts & Entertainment by the Numbers series, I already addressed the matter of earnings one can expect to generate if he or she decides to become a "writer."  If you recall, it was established that, with a few exceptions primarily driven by seductive (literally) subjects, or notoriety (oh, I am sorry - fame) of the authors, or some magical (again, literally) mass appeal, there is not much money in writing. 

Of course, I didn't talk about ALL "writing."  That post was focused on books, both fictional and not - the self-contained multi-page opuses that come into public distribution through more or less conventional channels, which in our contemporary world include not only the old-fashioned publishing houses, but also self-publishing (including web-publishing) and on-demand-printing.  The latter have been pretty much commandeered by our ubiquitous mega-villains, Amazon and Google.  

Surprisingly, the vast majority of books are still printed and bound; and pretty much all of them are digitized as AZW, EPUB, IBA, PDF, etc. publications.  From my personal experience I can tell you that royalties on e-books, being profitability based, are actually much higher than on the printed copies.  As you can imagine, distribution of files costs a fraction of physical printing, shipping, etc.

Of course, books are not the only products of the "writing" professionals.  I fitted playwrights into Theater and screenwriters into Movies.  And I didn't want to discuss the earnings of conventional journalists, not only because I am really appalled by the contemporary standards of that trade, but also because there is nothing particularly special about their compensation.  It's basically a pay scale - no different than the one for any back-office workers.      

According to the latest data from the Bureau of Labor Statistics, an average reporter or a correspondent makes about $21 per hour, or $43,780 a year.  Of course, those working in publications with household names, especially in DC or NYC, or at cable and broadcasting venues, earn above average.  But even then we are talking $53K-$60K annual salaries.  Nothing glamorous.

If famous faces of Barbara Walters, or Katie Couric, or Matt Lauer pop into your head, stop it - those people might've started as journalists early in their career, but that's not what they are now - through some peculiar twists in their fates they've become multimillion-dollar TV personalities with roomfuls of staff who do the actual work and get paid what I said above.  Moreover, as far as I am concerned, the professional comedians Jon Stewart, Stephen Colbert, Bill Maher, and John Oliver turned out to be much better newsmen than all those other smiley faces.             

But forget all that!  The remarkable thing about our electronically permeated era (as far as the writing is concerned, of course), is that the majority of the "written" words nowadays floats in the realm of computer codes; resides on some servers in the unknown to the authors locations.  The vast majority of that majority is motivated into existence by a singular intangible incentive - the writer's desire to verbally express his/her opinions and ideas; it's produced for no material reward at all.

This includes over 10,000,000 (that's 10 million!) individual and collective blogs, which produce over 4,000,000 (and that's 4 million!)  posts every day (hence, my utter surprise that my own humble entries are consistently found and read by people from different countries); online fiction publications; fan-fiction entries into various pop-culture Wikias, unpaid entries (in hopes of exposure) into a multitude of e-zines, etc., etc.  It's all created for no pay and mostly available for free (if you don't count the unbearable assault of advertising on more popular sites as your cover charge - I do).   

And even those who appear to be writing not on spec but on assignment or write on spec but get syndicated, possibly generating fees and royalties for their digital words at such giant contentmongers as, for example, The Huffington Post - nobody seems to know for sure how much money they make.  Well, people close to the subject probably have some scattered bits and pieces of information, but it's so sparse and inconsistent, it's impossible to draw any solid conclusions.  In fact, the aforementioned Bureau of Labor Statistics simply gives up on the matter, basically admitting that the new media is so, ahem, new that there are no set rates and no correspondent statistics.    

But I am not an official government agency - I am just a curious person armed with my common sense and capable of making logical conclusions.  Moreover, I have the freedom to extrapolate, speculate, and infer.  And infer I shall.    

The first fundamental truth about online presence is that the majority of people religiously believe in its powers of publicity.  Hence, the said number of blogs, shameless exhibitionism of facebook pages and personal sites, endless YouTube videos, etc., etc. - general population thinks that if anybody can "be found" today, it will be online.  A few miraculous stories of the Internet exposure actually leading to "fame" only reinforces this belief.  (And the sea of content is growing exponentially, if you catch my drift - but that's another topic).  In context of our subject this makes me think that those who get published in popular online outlets agree to do so for next to nothing, i.e. for much  less than even conventional writers get.

The second fundamental characteristic of the Internet itself as a business is that the majority of revenues generated by non-eCommerce websites, if any, come from online advertising, at least for now (I think this situation is going to change, but that's, again, another topic).  Advertisers, just like the general public, have their own system of the Internet faith - the click-per-view conversion.  In the web environment, the old admen rule of placement for the maximum consumer impact gets a statistical dress-up: a certain number of views results in a click on the ad's link; a certain number of clicks, in its turn, converts into a consumer acquisition, i.e. a sale.  Everyone is invested into the same idea: the more views, the more clicks, the more sales; hence, the popular pay-per-click pricing formula.  As a result, the online content is monetarily valued on its potential viewership. 

This made me think that the most logical way for an owner of a content-driven website to compensate a contributing writer would be based on some rate-per-view (just like YouTube with its videos).  The question is how much?  What's the digitally published word worth?  Apparently, even Labor Statistics officials don't know - most likely because reporting those earnings is still a gray area.    

Ah, but that's what the Internet is actually for - the information superhighway.  If something piques your interest and you know how to formulate your search, you will find what you need:  like the large UK blogging hub on everything pop WhatCulture.com (they are absolutely right - they have nothing to do with Culture, concentrating primarily on blockbusters and gossip in film, big hits and gossip in TV, mega stars and gossip in music, plus gaming, sports, WWE). 

The site's content model is based on accepting (not guaranteed) and publishing other people's submissions.  On their Write For Us and Get Paid page they openly solicit material from the potential contributors (Lists! Lists! Lists! That's their preferred format - "9 Reasons to Be Excited About Arrested Development Season 5" or "10 Actors Who Really Don't Belong in the Upcoming Movies" and shit like that).  Therefore, the "get-paid" rate is openly disclosed right there: £0.40 ($0.62) per 1,000 views. 

Aha!  With that in hand, let us entertain ourselves with some arithmetical exercising:  Yesterday, the most-read entry in the film section of WhatCulture.com was "10 Things You Need to Know About Captain America: Civil War" - it had 1.3 million views, thus generating its author $806.  Not bad, assuming he put it together pretty quickly.  Theoretically speaking, if you can pop one of this every day, 5 days a week, 52 weeks a year, you can actually earn $210K annual wage! 

But the probability of it, of course, is quite slim - not only because no one on their own can research and write 260 entries a year, but mainly because it's hard to achieve such viewership: for example, the most read TV article had only 223 thousand views ($138.26) and the top one in a deeply hidden Art division (the only one in the whole site I personally found interesting - 10 Up and Coming Portrait Photographers) attracted exactly 2000 readers ($1.32 worth).  The audience's interest is fickle. 

This site is big and popular - the effort of a full-scope statistical analysis goes beyond my level of interest (I am sure the management has all the numbers readily available to them), but my quick-glance conclusion is that the average views per post is about 50,000 or $31 value.  So, ladies and gentlemen, even if you can do three of those a week, the more realistic earnings would be a modest amount of $4,836 per year.  

I say, don't quit your day job for this just yet - that is, of course, if you have one.

P.S. to Unpunishable Plagiarism

A few readers expressed strong disapproval of my recent post Warning: Unpunishable Plagiarism.  Not of the subject matter per se - they agree that gorging on other people's creativity, whether in business, science, or arts, is despicable and the law that doesn't protect it is fucked up; but they were upset with the examples I've chosen to illustrate the idea-snatching in pop-culture.  Instead of picking on absorption of mythology, folklore, and literary inheritance in the beloved Harry Potter, they say, or making vague allegations about the possible origins of Hannah Horvath, why didn't you talk about the simultaneous releases of Pixar's A Bug's Life and DreamWorks' Antz (both in 1998), or of a superior Chris Nolan's The Prestige and subpar Neil Burger's The Illusionist (both 2006)?

The answer is simple: as peculiar and suspicious concurrent developments of very similar ideas by different production companies are, it is practically impossible to uncover the back stories behind these incidents, or make even vague attempts to point a finger at the alleged perpetrators.  So, I wrote about the instances that seemed somewhat obvious and transparent to me.  Otherwise, the post would consist of nothing more than just one anecdote from my own professional life and a non-descriptive list of dubious cultural references.  Maybe it would be more sanitary, but also boring.

Let's take, for example, The Prestige/The Illusionist case.  What can we dig up?  Well, both screenplays were based on legitimate and independent literary sources.  

The first one is an adaptation of a novel with the same title written by an English novelist and science fiction writer Christopher Priest and published by Gollancz in 1995.  Priest is a well-known  and highly respected writer: the themes of his A Dream of Wessex, for example, were used as a framework for David Cronenberg's fantastic eXistenZ.  The year The Prestige hit the book stores, it was nominated for four sci-fi and fantasy awards and won two of them.  While the movie differs from the book (the latter being darker and more complex) all the main ingredients and the plot turns were taken from the novel: the characters' names and descriptions, Priest's fictional practice of stage illusions (the setup, the performance, and the prestige), the nature of the competing teleportation uber-acts, and even the guest appearance of Nicola Tesla.

Various sources indicate that several Hollywood producers had approached Priest for an adaptation of the novel and it was Valerie Dean of Newmarket Films (they also produced Memento), who told Chris Nolan about the novel in 2000.  After he read it, Newmarket Films purchased the option.  I can see how adapting a novel constructed as shifts between entries of two diaries could be very difficult, especially considering that the work on Insomnia had already began.  Yet, the Nolan brothers had it finished in 2003 and were ready to start filming, but it wasn't meant to be: Batman Begins production got escalated and The Prestige was postponed.  The pre-production didn't start until October 2005 and the film was released by Touchstone exactly one year later.

The Illusionist is based on an even earlier short story by Pulitzer Prize winner Steven Millhauser Eisenheim the Illusionist - it was a part of his 1990 collection The Barnum Museum.  The Hollywood mythology has it that, even though Neil Burger's debut Interview with the Assassin was a terrible flop, its producers desperately wanted to work with the said writer/director again.  In 2002 they asked Neil what would he like to do next and he said, "There is this short story I always wanted to adapt..."  I'm guessing it took a couple of years before the idea could be sold and budgeted (unlike Chris Nolan, Neil Burger had no other projects on his hands), and the movie didn't go into production until early 2005.  It was released 10 months ahead of The Prestige.     

Thus, on the surface all facts point to the accidental concurrency of these two movies.  However, who the fuck knows how the little impulses that churn the Hollywood machine work?  You see, as soon as any creative property is optioned, the fact becomes a matter of public knowledge.  Ok, let me amend that: I don't really think that the "general public" is following that kind of information.  But if you are in the trade or have some sort of a vested interest in filmmaking, you can and must know all tinseltown's moves.                        

I mean, Variety, the oldest American entertainment-trade magazine, had been founded in 1905 (!).  Since then, its been reporting on every single production and celebrity move imaginable.  The Hollywood Reporter joined the action in 1930.  Nowadays, you can have paid subscriptions to both publications online.  However, the Internet access to filmmaking trade news is dominated by DoneDeal Pro ($24 a year), which delivers basically a live feed of every option, screenplay purchase, new project announcement, talent attachment, etc.;  and IMdB Pro ($125 a year) with its remarkable search capabilities allowing you to see what every producer has "in-production" and "in-development."  And I know for a fact that all production companies and studios have staffers and interns, whose job is to deliver the digests of all these daily news to their bosses.   

So, it is easy to imagine that the knowledge of The Prestige waiting its turn since 2000 could've been a pressure point in The Illusionist pitch: "Look, we can beat their timing with our own movie about a magician..."  Is this a qualified example of the unpunishable plagiarism?  I really don't know.  You decide for yourself.

Some readers also said that my post, by making a case that "everyone steals," might give unsavory elements a carte blanche for encroaching on others' creativity.  Well, first of all, I hope I was explicit enough in stating my position on the issue.  Secondly, I honestly don't think that my two cents have the power to change the situation in either direction.  And finally, I am not Huffington fucking Post - I don't have that kind of exposure!

Of course, I cannot just end this post without letting the movie critic in me to use this opportunity to make the following comment.  If somebody referred Christopher Nolan to Eisenheim the Illusionist, he wouldn't care for it.  It's a story of the "and I will do anything for love" kind, and this writer/director is not interested in that.  Think about his movies (including Man of Steel, which he only co-produced) - they are all about a Man and His Mission, a Hero and His Obsession.  Love, even if it's present, is just a plot point; it is seated in the last row of the Nolan bus.            

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Warning: Unpunishable Plagiarism

The Late Robb Stark, CEO of House Stark

Let me say first that I mourn the death of Robb and Catelyn Stark just like the rest of the Game of Thrones fandom.  Yet, the sadness doesn't cloud my judgement; it doesn't prevent me from fully grasping the ironclad logic of good storytelling.  I am fully aware that the tragic events of the Red Wedding were not written for the sake of shock and gore.  They were consequences of the characters' actions and motivations, consistent with the specific circumstances and forces at play.  They had a lot to do with matters of executive responsibility, obligations of power,  burdens of leadership, i.e. with the "weight of the crown."  As the Bard said, "Uneasy lies the head that wears a crown." (Henry IV, Part 2, Act 3, scene 1, 31).       

To those who read CFO Techniques I would like to offer my apologies for using the analogy from The King's Speech here again.  It's just that the Brits, who's been living under monarchy for over 1500 years, understand this royal-duty business better than anybody.  (Also, they seem to speak the same language as the Seven Kingdoms' folks.)  So, in the movie, Prince Albert (Colin Firth) tells King George V (Michael Gambon), "Father, we are not a family, we are a firm." And the king replies, "We are the oldest, most successful corporation in the world and sitting on thrones is our business."

Yes, ruling a nation is a family business, and that makes a king the Chief Executive Officer of his land and his people.  And in this position, just as it is in any company, he is responsible for

• strategic development - expansion, contraction, restructuring, hostile takeovers,
• foreign policies  - establishing or severing connections with external parties, forming partnerships and alliances,
  
• tactical decisions - laws, decrees, rules, governing appointments, organizational infrastructure,
  
• fiscal adequacy - financing day-to-day operations and all those strategic moves,
  
• economic balance - most important for prevention of revolts, backstabbing moves of dissatisfied courtiers, and the fleeting of labor,
  
• human relations - the adoration and support of one's subjects doesn't hurt.    

In fact, in George R. R. Martin's world, a king's enterprising is very entrepreneurial, very hands-on.  Nothing like the make-believe leadership we see in the dangerously large governing bodies of contemporary conglomerates/countries.  In the Seven Kingdoms, a true leader cannot be a mere token sitting on a throne (in King's Landing they have Joffrey for that, while Tywin rules).  A ruler's job requires a lot of personal involvement and micromanagement: from weaving intricate intrigues to beheading those you condemned; from charging in front of your troops to skinning a damn large deer - the one with the executive power cannot avoid rolling up the sleeves and getting his/her hands dirty.  

Most importantly, the king must take personal responsibility for doing the right thing by his nation.  He'd better have his priorities straight: the crown is so heavy because the burden of authority calls for selflessness and sacrifices.  Those few business owners that earned my personal respect over the years concentrated all their efforts on the prosperity and success of their companies.  They were acutely aware that business is nothing if not a continuous struggle for survival. 

So, what about Robb Stark?  How did he do as a CEO?  Not very well, I'm afraid.  He was like one of those young rich boys, who inherited his father's business too early due to an untimely death - full of great potential, brilliant ideas, and... illusions.  The childish sense of invincibility has not yet evaporated from his body.  He thought he could break and rebuild the word any way he wanted.  And so, he went and violated the millenia-old custom of building political alliances through marriages: he broke off his engagement with Lord Walder Frey's daughter.  His Love was above any rules.  How beautiful! 

How cheeky and irresponsible!  It was an unforgivable insult to House Frey.  It was disrespectful to the memory of his father who made an arrangement and himself inherited Catelyn as a bride after his older brother's death.  And, as far as the well-being of his land, his subjects, and his mission are concerned, it was plain reckless.  In the business environment, this would be the equivalent of breaking contractual obligations with your commercial partners or violating the terms of your financing agreements.  Actions of this kind result in companies loosing their reputation, market share, procurement resources, creditability, funding, and eventually going bankrupt, i.e. die.

As many young entrepreneurs, Robb Stark was a person of extremes: he was quick to break rules practically written in stone, yet many of his actions were marred by poor, hesitant decision-making.   Whether due to inexperience or a lack of talent for long-term strategic thinking (his military campaign proved him to be a good tactician), he was never quite sure what was the right thing to do.  It's bizarre, really: sometimes he neither followed the solid logic presented to him by his advisers, nor did he go with his own gut.  The foolish execution of Lord Rickard Karstark, which resulted in a loss of a huge chunk of allied troops is an obvious example.

I've been forever writing and talking about psycho-profiling as a key management skill.  One simply cannot succeed without it.  Robb's inability to read people and their motivations might be the main reason for his downfall.  What made him think that old Lord Frey will forgive the insult and tolerate Robb's wife being shoved into his face in his own home?  How could he forget that you cannot trust anybody and must always be on alert for betrayal?  If we think rationally about it, the probability of retaliation was very high.

In contrast, there is a reason why a few smart people reluctantly realize that Tyrion Lannister is King's Landing's only hope.  Not only that he is sharp, brave, incisive, and fair, but he also understands that if one wants that family business of ruling kingdoms to be successful, he must be ready to forsake a thing or two, including personal happiness.

It's great to find out that I'm not the only one who saw the parallels between the demise of Robb Stark and the small-business leadership.  The article below was prompted by TypePad as a related post.

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Cutthroat Leadership Lessons from Game of Thrones

Quote of the Week: Happiness??!

There is a vast and eclectic ocean of cultural works I worship, adore, admire, enjoy, appreciate, critique, or simply consume.  Some artistic thoughts deeply affect me; a few strike straight through my heart and soul.

But in all of that massive heap of diverse imaginative expression, there seem to be only two creators to whom I relate as a person, and not as an arts junkie: Woody Allen and Larry David.

I think the below excerpt explains it all:

Paul Dolman:    Hey, what's it feel like to have a lot of money?

Larry David:    Most days I don't even think about it.  But it's better to have it than not.  Money can't make you happy, but it can make you happier.

Paul Dolman:    Did success help make you happy?

Larry David:    Who said I was happy?

From Paul Samuel Dolman's "Hitchhiking with Larry David" (Gotham Books, 2013

Non-American Realism of "Game of Thrones"

I'll admit it: in some of my posts I take a long-winded way to get to the point (hey, usually I have my reasons).  But there is no need for that in this case, so let me go straight to it: When it comes to the machinery of Life, the HBO fantasy series Games of Thrones and it's literary source, George R.R. Martin's A Song of Ice and Fire, are the most realistic creative products in American pop culture today.

I am not going to speculate about Mr. Martin's title for his epic's last installment, A Dream of Spring.  But I agree with a very smart person who, after watching Robb and Catelyn Stark betrayed and butchered in The Rains of Castamere episode, said: "This man will not cuddle us with nice, happy story turns we so eagerly hope for."  

No, he will not.  The series will not cater to the general public's expectations that amid a gruesome fight for power and mere survival our "favorite" characters will remain untouched and unsullied.  Moreover, the author and the show's creators will turn your emotions upside down: one minute you hate the incestual Jaime Lannister, who pushed little Bran out of the window, and the next minute you don't know what to do with your pity for his sword hand - they might as well have castrated him.  And who knew that the actual castration of the despicable and ungrateful Theon would leave you so unsettled?  

This is not your average mass entertainment fare, and the American audience is not quite prepared for it.  This is a type of authenticity cinephiles expect from French New Wave, Italian Neorealism, Cinema Novo, and Russian movies - genres specifically designed to show the naked inhumanity and unfairness of life. (The same smart person once said, "It was a Russian comedy.  I cried all the way through it.")    

George Martin's stories may take place in imaginary lands, but they are populated with very real personalities, who act like people we meet every day - power-hungry egomaniacs, cruel sadists, wealth-obsessed careerists, amoral traitors, and dishonest schemers.  This is a fantasy that reaches the ultimate height of mythology and becomes a metaphor for Life. 

Pop culture plays a crucial role in the formation of people's mentality.  And it's incredible that the popularity of the show is increasing from season to season.  Over 5 million people watched their hero Rob slaughtered on June 2nd - a drop in the ocean, of course, as far as our vast nation is concerned.  Still, if Game of Thrones wakes them up to the reality and they stop looking at the world through the pink glasses of "hopeful" Hollywood movies, it would be a grand artistic achievement.

Brace yourself, my fellow humans, Winter is coming.                      

Quote of the Week: The Negation of F. Scott Fitzgerald's Misguided Morality

"Scott Fitzgerald was, in his own words, 'a moralist at heart.'  He wanted to 'preach at people,' and what he preached about most was the degeneracy of the wealthy.  His concern, however, did not lie with the antisocial behaviors to which the rich are prone: acquiring their wealth through immoral means...  Like many American moralists, Fitzgerald was more offended by pleasure than by vice, and he had a tendency to confound them.  In The Great Gatsby, polo and golf are more morally suspect than murder.  Fitzgerald despised the rich not for their iniquity per se but for the glamour of it..." 

                                                        Kathryn Schulz

                                                        Bad Egg (article for New York Magazine) 

The Frustrated CFO's comment:

A highly opinionated person has a difficult time restraining herself in the face of the inevitable hype evoked by the new adaptation of the "great American novel." And I'm not even talking about myself: Kathryn Schulz's strongly negative point of view resonated very positively with me. So, let me stick (or rather add) my two cents as well.

First of all, just like Ms. Schulz and a few other intelligent people, I always thought that, as a fictional novel, The Great Gatsby was a bad book. Moreover, the simplistic socio-economic generalizations of F. Scott Fitzgerald's writings, based on his own immediate upper-class surrounding, offend my intelligence. It's one thing when writers stick to what they know. Hey, if all of them were Philip K. Dicks, how would we know the difference? It's a completely different matter, however, when someone takes bits and pieces of his personal experience, severely impaired by alcohol and self-loathing, and tries to pass his cardboard characters and schematically constructed narrative as a "critical social history." That's a very dangerous, irresponsible, and self-serving undertaking. Was J.D. Rockefeller Jr., the conservationist, identical to Tom Buchanan?  I don't think so. Yet, they both belonged to the same class, the same age group, they both went to Ivy League Schools, etc.

There is a reason why the book's popularity rose sharply after WWII: the social changes were ripening and the white rich people were despised by most, including their own heirs (Patty Hearst was not the only one, you know). In the eyes of the readers who caused the Baby Boom, the Fates have punished poor, infatuated Jay Gatsby for trying to be where he didn't belong, for wanting to become rich and impress Daisy into loving him, for betraying "moral values" in order to accomplish this self-imposed task.

But times have changed. What the majority of critics don't realize is that by now the novel has lost all of its social-scorn charge. The baby-boomers and their children, corrupted by the celebrity-obsessed media, LOVE wealth above everything else and ENVY, but do not disapprove of, the rich. A "self-made man" Jay Gatsby is not pitied, but revered.  Who cares about shady deals, DUIs, and murders - it's all in the "job description" of climbing the ladder to the "top." 

Here is another quote to illustrate the depth of our contemporaries' perversion: 

"Every time I'm out, a drunken Wall Street guy comes up to me to say, 'You're the man.'  It's depressing.  Gordon Gekko was not a hero."

                                                                Michael Douglas 

Only in this environment the unrestrained lavishness of Baz Luhrmann's production could be acceptable, and preferable, to the hordes of day-dreamesrs wasting their lives on fantasizing about becoming rich and famous overnight. 

Now, go and Check out this entertaining post about what other directors might've done with this stale material.

MONEYNEWS: The Shit Will Hit the Fan Soon - Didn't I Say So?

For a really long time now, I've been explaining (and so have other realists) that the overpricing of pretty pieces of paper (aka stocks, bonds, treasury bills, etc.) caused by the gambling games of cocaine-fueled, high-strung nitwits in high-rise brokerage offices and delusional day-traders glued to their hand-held devices has nothing to do with real production values, revenue growth, profit generation, and economy improvements.  

It's shocking to me that people seriously accept the stock market "rally" of the past few months as a sign of tangible fiscal gains. The same goes for the rise in housing prices resulted from the unprecedentedly low mortgage rates artificially kept down by the US Treasury.

Don't you people understand that, just like with a terminal patient, this is a temporary remission before the downfall?  You cannot take a candy wrapper that worth 1 cent and say that its price is $430 just because there is a schmuck who is willing to shell out that kind of money for it and hope that there is another idiot out there who will pay $450.  Any, more or less logical, person should understand that the real value behind the candy wrapper is still 1 cent, regardless of how much money you pay for it.  But apparently the general public is severely lacking common sense and logical aptitude.

You know what else they are lacking? The disposal income - the money to spend, the moolah to throw around, the dollars to buy the products of the very companies, whose stocks comprise these people's pension and college funds.  If the consumer market contracts, how can companies generate revenues?  How can a nation experience a recovery, when 99.9% of it is getting poorer and poorer by the minute?

This issue of the constant reduction of consumer spending is at the core of the economic disasters ahead of us.  And apparently the public-stock billionaires, whose wealth is so easily added up and compiled into lists in the Forbes's offices, have already caught up with the reality - they are in high-gear disposal mode.

Please-please read this MONEYNEWS' article about Billionaires Dumping Stocks.  In addition to listing the relevant verifiable facts, it also refers readers to the voice of reason - an economist with an impeccable prediction record who foresees a market adjustment as dramatic as 90%!!!  And if you want a really full picture read the other articles linked below as well.   

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'Aftershock' Author Robert Wiedemer to Moneynews: Investors Buy Into Fed's '100% Fake' Recovery

Billionaires dumping stocks like they're going out of style (including bank stocks).

Quote of the Week: The Biggest Problem of Contemporary Literature

"The reason why so few good books are written is that so few people who can write know anything."

                                            Walter Bagehot

                                             1826-1877

Note from The Frustrated CFO:

I feel a kinship with Walter Bagehot.  He was a businessman, essayist, and journalist.  While his main focus lied in the economy and money, he also wrote extensively on government, politics, literature, and culture.

Quote of the Week: The Accounting Blues

The Frustrated CFO's Preface:

From time to time I feel a need to come back to the discussion of an emotional burden carried by the accountants who find themselves in the unfortunate position of recognizing and reporting business losses.  And I feel absolutely justified doing so, because it is one of the most painful professional experiences.  Moreover, it is a reality many small-business CFOs and Controllers have to face with a persistent regularity.  Less than three months ago, for example, I wrote about the effect of losses on bosses (upon closing of the second quarter by the companies with a calendar fiscal year).  Nobody ever mentions how hard it is for us to be the messengers of news that may translate into budget cuts, layoffs, credit line recalls, and possible termination of business.  So, I feel obligated to talk about it.

Imagine my surprise, when I discovered a depiction of the familiar sentiments in a Booker Prize winning novel about one woman's wasted life - Margaret Atwood's The Blind Assassin.  I don't know whether Ms. Atwood is acquainted with somebody who shared their experiences with her, or she is that good at getting inside her characters' heads and imagining how it would feel to someone in real life.  What matters is that it's very accurate.  So, here it is:

"Two and two made four...  But what if you didn't have two and two?  Then things wouldn't add up.  And they didn't add up, I couldn't get them to; I couldn't get the red numbers in the... books to turn black.  This worried me horribly: it was as if it were my own personal fault.  When I closed my eyes at night I could see the numbers on the page before me, laid out in rows on my square oak desk... - those rows of red numbers like so many mechanical caterpillars, munching away at what was left of the money.  When what you could manage to sell a thing for was less than what it paid you to make it... - this was how the numbers behaved.  It was bad behaviour - without love, without justice, without mercy - but what could you expect?  The numbers were only numbers.  They had no choice in the matter."

                                                             Anchor Books edition, 2000, p. 204

                                                                

Arts & Entertainment by the Numbers, Part I - Books

I frequently say that people who really know accounting and finance don't care what to count, analyze, fund, etc. I obviously include myself into this group - not to toot my own horn, but simply because my career has proved that I am actually able to successfully plunge into any type of business, any industry.  

The essential prerequisite for this level of expertise is an extensive fundamental knowledge combined with a propensity for applying general principles to specific situations.  There is also a very special knack that plays a crucial role in the making of  universal financial experts: a natural ability to convert everything into monetary units. 

I do it almost automatically, almost with everything, sometimes to a fault.  However, my reverence for creative endeavors prevents me from crudely slapping price tags onto them.  It's only somewhat recently, as a result of certain developments in my own life, that I became curios about various numerical aspects of arts and entertainment.

Of course, some numbers are commonly known.  The others are easily derived through general financial acumen and cultural intuition.  But I must say, some of my findings turned out to be simply bewildering.

I. Books

The PEN Award recipient Grady Tripp (Michael Douglas's character in Wonder Boys)said that the only reason the University's Chancellor fell in love with him was because "she was a junkie for the printed word.  Lucky for me," he continued, "I manufactured her drug of choice."

I have to say that if there were such a thing as Arts Addictions Anonymous, I would probably end up, together with the Chancellor, in the "books group."  (After that they would move me to the Theater and Cinema rehabs.)  The question is, how many other people would be there with us?  Here are a few sad  numbers about my first love - the written words.

According to various publishing specialists, if an advance of $3,000 is paid to a book's author, the life-time sale of 10,000 copies is considered to be a success.  Most debut literary story collections sell no more than 2,000 hard-cover copies.  For the first literary novel this number falls into the range between 3,000 and 7,000.

An average professional-interest book sells about 5,000 copies in its lifetime.  This includes e-Books (which, as you know, can be easily stolen).  If the author hires, naturally at his own expense, a book agent and a PR firm, the sales may go up as high as 12-13 thousand copies.  

Just for the sake of the statistical integrity, let me remind you that the population of this country is 315 million. 

Now, here come the dollars.  This is derived from my own first-hand experience: an author's royalties range anywhere between $1-$4 per sold book.  So, if your book has sold 5,000 copies, you can hope to generate somewhere between $5,000 and $20,000.   Astonishing, isn't it?  We are talking about the payoff on the multi-months (sometimes years) struggle.

This explains why 99% of American authors have day jobs.  Most literary writers with respectable names teach creative writing classes in Universities.  One of my idols, the late Kurt Vonnegut, taught at the University of Iowa Writers' Workshop (the most prestigious post-graduate program in the country) practically until he died.  Many authors write for magazines (and I am not talking about just The Atlantic or The New Yorker).  Of course, less known fiction and non-fiction writers also teach, research, consult, hold executive positions, etc., etc.  

It also explains why so many literary awards come with the words Fellowship or Grant at the end.  It signifies that the author was provided with sufficient funds to sustain her or him through the writing of the next masterpiece. 

Of course, there are bestsellers.  It is said that in order for a book to get on the bestselling list, it must sell at least 7,000 copies a week (in any category).  So, if you see that a book stayed on The New York Times Bestsellers list for, let's say 20 weeks, it means that it has sold at least 140,000 copies.  Now, we are talking about different kind of money - about $500,000 in royalties from a single title.  Of course, if you had an agent who hooked you up with the right publisher, 10% of that goes to him.  

Unfortunately, it is quite rare that a true literary novel or a scientifically brilliant non-fiction becomes a bestseller.  With the exception of a few (Kurt Vonnegut again, John Updike, John Irving, Muriel Spark, Alice Munro, Norman Mailer, Jennifer Egan, Johnathan Franzen), most contemporary writers (royalty-free old classics are not the subject of this post), whose work measures up to my standards of quality, never see their names on the bestselling lists.       

It's the thrillers, the soft-porn romances (the Fifty Shades of Grey trilogy still occupies the top three spots), the vampire stories, the heroic fantasies, and the chick-lit opuses that top the charts of fictional hits.  Children and young-adult adventures are distributed by bucketloads through schools and city libraries. 

Most popular non-fiction titles are memoirs, biographies and autobiographies, self-help books that promise to remake and happify you by the time you turn the last page, cook books, chronicles of staggering financial rises and downfalls.

And then there are mega-sellers - books that appeal to armies of readers, generating multi-million-dollar revenues for their authors and publishers. Among the most recent fortune-making printed commodities are the Harry Potter series (over 500 million copies world-wide and counting), Twilight series (over 120 million copies), Diary of a Wimpy Kid series (75 million copies), The Hunger Games series (50 million) [all young-adult books, by the way]; The Da Vinci Code (80 million) [a pseudo historical thriller with a feminist twist]; The Purpose Driven Life (30 million) [a 40-days spiritual journey manual for finding God]; The Girl with the Dragon Tattoo (30 million) [sexual deviance thriller with even stronger feminist twist].

Note that all fictional books on the mega list were also turned into movies, thus multiplying their author's wealth.  To be fair, I must say that it doesn't happen only to low-brow mass-market hits.  High quality literary books are frequently adapted (at much smaller prices, of course) for the silver screen as well (the aforementioned Wonder Boys, Brokeback Mountain, 25th Hour, Fight Club, Forrest Gump, The Color Purple, Stand by Me, Schindler's List, The English Patient, to name a few).  It's another way for a good writer to earn a little bit of extra money. 

We will return to movies later in this series.

Continue to Part II