Cost Inflation in Hollywood

Tyler Cowen has high

praise for the

FT’s coverage of the Hollywood writers’ strike, and for this passage in


While broadcasters have more rights, they also have to fund production, which

is increasingly expensive. The cost of a one-hour scripted drama has tripled

from about $1m in the early 1990s to $2.7m, according to some executives.

The cost of a 30-minute comedy has doubled to around $1.5m.

This, together with competition from cable channels, explains why the broadcasters

are taking such a hard line, says Garth Ancier, president of BBC Worldwide

America, the BBC’s commercial arm. “They are fighting for their

lives. They need every last piece to come together, every last revenue stream.”

I, on the other hand, find such passive-voice constructions highly annoying.

The cost of a drama "has tripled"? The cost of a comedy "has

doubled"? Did this just happen in a vacuum? The studios, as the FT makes

very clear, control pretty much all aspects of the production process these

days – which means that the increase in costs would seem to be of their

own doing.

I have very little sympathy for studios who can’t keep a lid on their own

costs and who then attempt to turn around and get their writers to eat the overruns.

On the other hand, if it’s the writers themselves who are partially responsible

for those cost overruns, the FT should tell us that. How much do writers on

dramas and comedies earn today, compared to what they earned in the early 1990s?

I’d also point out that if by "early 1990s" the FT means 15 years

ago, then a doubling over the course of 15 years corresponds to an average annual

increase of less than 5%, while the jump from $1 million to $2.7 million corresponds

to an inflation rate of about 6.8%. These numbers are higher than inflation,

to be sure, but they’re hardly stratospheric.

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