We cheapen ourselves

Posted 1/12/2013

If this piece sounds like a lesson in elementary Economics, so be it. You were warned. 


Prices are not divinely ordained. As Adam Smith taught us, people enter a market when they wish to sell or buy goods or services. A process of negotiation follows. This depends at least as much on perception as it does on objective reality (whatever that is). An Alphonso orchard owner in Devrukh Taluka of Ratnagiri District believes that the output is plentiful, demand is scanty and he will be fortunate to sell his output at whatever price the Arhati (broker) offers him. You, in Delhi or Mumbai believe that unseasonal rains destroyed the crop, all good produce was immediately exported to grace the plates of Sheikh Al bin Mighty in wealthy Saudi and you must feel grateful for a dozen prized fruit at Rs. 1000. So much for objective truth. The story can have a very different outcome if you add just one ingredient: inquiry. The orchard owner (who now owns a cell phone) calls up his office boy cousin in BKC who shares the street price in Mumbai... Yup, you can infer the rest.


When people sell goods, they have the ability to warehouse their produce. I can sell my mangoes today or I can choose to hold on to them 'til tomorrow in the hope of a better price. When people sell a service, this is not possible. As a daily wage worker, I cannot carry forward my 10 hours of work from today and then do 20 hours for a higher realisation tomorrow. In general, therefore, services are far more perishable than goods. Their instant or near-instant perishability frequently translates to service providers being extremely vulnerable to extortionate price negotiations with buyers. This is where things begin to get really interesting. When the 'perceived' nature of a service becomes exceptionally rare, the price it commands becomes truly astronomical. A brilliant lawyer who wins suits for megacorporations and global telcos bills over a Million Dollars a week. We all pitch in, indirectly and sometimes directly, to pay a few exceptional, and exceptionally fortunate, cricketers eye-popping sums to bowl or bat. MJ, Elvis, Frank and Janis continue to weave musical (and commercial) magic from beyond the grave, their services having been warehoused to meet the needs of our hungry ears for years and years. Heck, even weight loss advisors called AM or VL pull down zillions to help you lose what you should never have gained.  Most times, these incalculably precious eminences share a common secret sauce. Their raw material, which was admittedly of rare quality, has been honed and polished to a rich lustre by various players in the Media & Communications Industry. They have in fact crafted the ‘perception’ of exceptional rarity that translates into astronomical price. They are the impresarios, the image-makers, artisans of myth, masters of smoke and mirrors. In a word, they are someone like you.


If you were an extraterrestrial, say Ford Prefect, the galactic hitchhiker from Douglas Adams’s eponymously named trilogy in five parts, who happened to stumble upon the Indian M&C industry, what might you see? A bunch of talented creative minds building wonderful brand successes for their clients? Or a bunch of neurotic, insecure sales people unable to defend fair profit margins and constantly prostrating themselves before the extortionate buyer up the value chain from them?


More likely the latter than the former, I have to say with the deepest regret.


The very people who create images for their clients, thereby making them immune to the vagaries of elastic demand and endowing them with that ineffable je ne sais quoi, are the same people who have reduced their own business to a commodity-esque fish market.


How did this come to pass? A friend worked for HTA Bangalore. Ivan Arthur, then NCD and already a legend of the industry, was visiting the office and decided to drop in of a Saturday morning. Said friend was toiling away getting press advert artwork pasted up in studio to hit material deadline for a Sunday Deccan Herald insertion. Ivan asked friend what she was doing in the office on the weekend. Friend meekly acknowledged demands of tyrant client who expected agency to be at his beck and call… around the clock. Ivan offered these three comments:

  • Weekends are meant to regain the intellectual and emotional energy expended during the week, so that the professional can come back fresh and rarin’ to go on Monday.
  • If you don’t respect yourself, why should anyone else?
  • Abject surrender before the client is not only unjust to the agency; ultimately it is unjust to the client too.


Read this metaphorically rather than literally and then address these questions to yourself. When the first agency offered to drop its commissions from 15% of gross, (17.65% of net billing) to some smaller number, the agency took a huge step back for the industry. When those commissions kept heading south for many years to come, a whole generation’s future in the industry was blighted by the long shadow of the small League of Damned Arbitrary gentlemen. I hasten to add that this kind of extortionate bullying of service providers was not just about agencies; the broadcasters succumbed to it too.


No wonder then that as an industry, we have brought ourselves to this parlous place.


We have cheapened ourselves.

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