John Rogers lays it down:
There is no free market in Hollywood. In television for example, with the dissolution of "finsyn" rules in 1995 almost every independent producer has been either absorbed into one of the big media companies or dissolved. We've gone from 40 producers in television to the big Six.
Six. Six companies control almost all mass media in America. They control all, and I mean all, the standard distribution channels in America. They are also negotiating as a single entity, the AMPTP. If you've read your Adam Smith, you know that this is actually one of the situations he notes in Wealth of Nations which will indeed break the fingers of the invisible hand.
One of the real problems with the simplified neoclassical framework some of my libertarian pals use is that rational economic actors do not long abide the state of perfect competition. They merge. They buy each other out. They seek monopolies. They seek, in other words, power and advantage. As John Kenneth Galbraith said, capitalism's natural tendency is towards aggregation, towards bigness, because that gives capitalists an edge. Rational economic actors do not like perfect competition. They like to win.
In the perfect neoclassical model, what you'd have here would be six, or 40, or 200, media companies competing among each other and snapping up the best writers by offering the best deals, which would include online residuals. What you have, instead, is the whole industry acting essentially like a monopoly and laying down a blanket refusal to offer online residuals. So don't talk to me of your free markets. As is so often the case, this is superficially a question of economics, but it's actually a question of power.
