Disorganized Channels Are Good for Creators


Disorganized Channels Are Good for Creators

SO WHAT WILL putting all this pressure on intermediaries do to creators? It’s a fair bet that any regulation that makes it more expensive, and more difficult, to be an intermediary will reduce the number of intermediaries. YouTube was founded by three guys and some venture capital; if the next YouTube requires that you spend a thousand dollars on lawyers for every dollar you spend on hard drives and bandwidth, there won’t be any more YouTubes. And that means that the existing YouTube-like services will stabilize, consolidate, and settle on the least competitive terms they can all live with.

The fewer channels there are, the worse the deal for creators will be. Any choke point between the creator and the audience will turn into a tollbooth, where someone will charge whatever the market will bear for the privilege of facilitating the buying and selling of creative work. Economists call this “transfer pricing”—all of a sudden, profits are captured at this choke point, rather than at any previous or successive stage.

Right now, there are a lot

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