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This is Rob Long with Martini Shot on KCRW.
I know two guys who make three-bean salad. A few years ago, they pooled their money, bought a small machine that fills jars, and they went into the three-bean salad business. They buy beans from some huge wholesaler, already cooked, and the machine dumps them into jars, fills the jars with pickling solution, seals the jars, and then another machine slaps a label on the jars that says something like, "Kountry Kupboard" three-bean salad, or maybe "Artisan's Pride Salad," or maybe "Sunny Ridge Ranch Three-Bean Salad" –- I don't know what the name is, only that it's not from a sunny ridge or an artisan or a country cupboard, it's from a machine that dumps wholesale beans from some gigantic industrial food company -– something like, probably, Drax Chemical, Munitions, and Foodstuffs –- and puts it in friendly jars.
And it's good. If you like that sort of thing. So good, in fact, that a few years ago these guys got a visit from Wall*Mart, or someone like them, and they wanted to sell their three-bean salad in their gigantic stores that pepper the globe.
Good news, right? Now you can sell your stuff to the world in the most efficient way possible. Think how many jars of three-bean salad you're going to sell!
So a representative of the giant retailer visits my friends and takes a tour of the factory and tells them that it looks to him like it costs them about $1.11 per jar. "Wow," they said. "You guys are great. That's exactly what it costs us."
So the guy from the giant retailer tells them that the company will pay them $1.1101 for each jar. Giving them a profit of .01¢ per jar. Which they can take or leave, but if they don't take it, he's going to find someone, somewhere, who can make three-bean salad for that price and he's going to stock it in his unfathomably large retail chain for $1.11 and it's going to be very very hard to sell three-bean salad for more than that, anywhere, no matter how sunny the ridge is.
So, of course, they take it. And they're doing okay, but every year the price goes...down, which isn't supposed to happen but does happen when you're talking about an operation the size and scale of, say, a Wall*Mart. Which isn't a terrible outcome, really -– because the people who shop there benefit from the low, low everyday prices and can fill up on three-bean salad for about a buck eleven, and gaze at the pretty label of the country kupboard opening up to an artisanal farm nestled in a sunny ridge, rather than a picture of what's really happening, which is two guys getting grey hair trying to shave another .02¢ off the price of the jar.
So, follow me here...because I think this story has something to say about the Internet, about web distribution, and about the writers' strike.
Something has been telling me for a few years that whatever happens, there's going to be a giant margin-squeeze coming in the entertainment industry from the web. I've said this before, I know, but it's worth repeating. What Wall*Mart is to three-bean salad, the web is to entertainment product. It wrings out the fat –- that's me, and the lawyers, and the agents, and, yes, the development executives and studio presidents –- and it delivers a low cost product to the consumer, who, let's face it, doesn't much care if the guys making the three-bean salad are getting rich or not. The price always goes lower. Always. The web is Wall*Mart. And we in this industry are sitting in a store on a slowly emptying out main street, making our expensive handmade doo-dads and selling $30 rakes, and if we only listened, we could hear them putting up the super Wall*Mart out by the interstate, where it meets the state highway, where the traffic is. Where it's easy for people to park and shop. And we're sitting, in our little Main Street boutique with our quaint little expensive merchandise, wondering where all the people are.
However this strike ends up, however it's ultimately settled, the truth is, the future is going to be more competitive, prices are going to go lower, and we're going to have to come up with a better, fairer, simpler, more flexible way to get paid. In other words, we're going to have to come up with a new business model. Something it's impossible to do when we we're screaming at each other. Or, when we're not screaming at each other, when we're not talking to each other at all. I mean, they're building the Wall*Mart. Let's make some three-bean salad.
Well, that's it for this week. Next week, we'll make lemonade. For KCRW, this is Rob Long with Martini Shot.
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