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This is an interesting subject, because intuitively one wants to make the comparison "Is Conan O'Brein paid a multiple of how many times funnier he is than a lo

This is an interesting subject, because intuitively one wants to make the comparison "Is Conan O'Brein paid a multiple of how many times funnier he is than a local standup?". But economically what's important isn't how funny he is, but how many viewers he can draw. So then you might ask, does Conan draw 30x more viewers than some no-name comic? But that also isn't the comparison that matters. If no-name comic can draw 10M viewers, but Conan can draw 20M viewers then should he be paid 2x as much? It depends on the costs for the rest of the show. If a show costing $500K to produce and $10K for a no-name host earns 1M then if they were to replace the no-name host with Conan and could earn $2M per show, it would make sense to do that as long as you weren't paying more than $1,010,000 (101x the no-namer) for Conan to host the show. The point I am trying to make here is that these figures vary from industry to industry and from job to job, I could have conversely changed these numbers around and shown that it doesn't make sense to pay Conan a huge multiple of the no-name comic's pay. For example, if the revenue does not increase substantially (like from 1M to 2M) or if the salary of the person in question makes up a much larger portion of the overall expense of the company.

sjg007 9y ago
It helps to be a celebrity and be "vouched" for.
jacquesm 9y ago
I don't see the parallel. A breakthrough or a patent is something that you do not know for sure you will achieve, but by hiring the best people in the field the chances of that happening go up and such competitive advantages are the cornerstones of corporate empires.
- 3pt14159 9y ago
  And at scale works both ways if you consider the invention inevitable. It isn’t just that Google has the patent it’s that Apple doesn’t.
- eberkund 9y ago
  It's very similar, it's just that the metrics are not so easily measured. A top tier employee might accept the job only if their salary is 2x what a lower tier worker might accept. Now you have to balance out what you think the difference in likelihood between these two workers finding a "breakthrough" is, if what is a breakthrough worth to your business.
  - jacquesm 9y ago
    So then, tell me what a Rob Pike should earn vs a Geoffrey Hinton vs Peter Norvig. I would not know where to begin to make that estimate. Whereas if a name in the entertainment business has 3 times the audience draw as another you could make a pretty good stab at what their relative worth should be.
    - eberkund 9y ago
      Yea, I don't disagree. It is clearly much more difficult to estimate certain things compared to an entertainer and how many audience members they can attract. That's part of the reason myself and another poster used it as an example. I think the point you're making is also what the article was trying to get at, that there are an unknown number of AI experts and it's hard to estimate what they should be paid which is why many of them are getting these crazy high salaries.
    - tomrod 9y ago
      > So then, tell me what a Rob Pike should earn vs a Geoffrey Hinton vs Peter Norvig. I would not know where to begin to make that estimate. Whatever they can negotiate, in my view.
    - asaph 9y ago
      They should be paid whatever the market will bear.
bkohlmann 9y ago
I think it's more of a winner takes all phenomenon in the Conan case. Usain Bolt makes millions because he's a tenth of a second (or less!) faster than many other people. Those other people - with the exception of maybe Justin Gatlan - make a far more modest salary. It's less than a 1% difference in performance that leads to orders of magnitudes differences in outcomes.
- fierro 9y ago
  interesting comparison!
- mrlala 9y ago
  Like the sumo wrestler phenomenon from Freakanomics.. something like the top 10 are extremely well off where after that it's crap salary.
- devonkim 9y ago
  Exactly, and winner takes all is extremely common for markets competing for rather limited markets. In sports, consumers really don’t pay much attention to high school athletes, car designs are becoming more and more homogeneous, and in pop music there’s increasingly more convergence in terms of style (although the irony is that the entertainment industry is entirely driven forward by trying to “discover” a new trend that appeals). My point is mostly that our collective attention spans are very limited and any business that depends upon attention from mass consumers will be constrained by the simple fact that we all only have 24 hours a day and that we can only support / raise so many children that then also only have so much time. This, it is a mass war for attention with primarily superpowers around (celebrities).
- speby 9y ago
  But he isn't being paid for being 1% faster .... he is being paid because he is the FASTEST. It doesn't matter if he was 0.5% faster, 10% faster, or any other percentage. It matters that he is the FASTEST. That's the label that draws people's attention, not the 1% incremental faster-ness. =)
- baybal2 9y ago
  Reminds me my first year as a webdev. I was extremely lucky to ride the apex web 2.0 hype/insanity wave. Now I can't believe myself that I, as a 21 years old and just 3 years of for-profit programming experience, got CAD 85k on first real job Canada for just jquery animations. Later down the career path in Canada, I was frequently asked "you worked for guy A and B, than must've been hell of a job?" or "how I got there to begin with?" All of them dismiss my explanation that "I just used to be on line 1 of google for thing A" The back side of the coin? The moment web 2.0 became a more of an "in-house" production with mid-to-big sized companies that no longer needed a "hired gun" outsider, and hype wave moved to other things I really hit a wall. Actually, on my next 2 jobs I took salary in $70ks and was contemplating selling major life assets after my last employer in Canada was unable to extend my work permit. Things went much better after I scaled down my appetites and stopped looking for employment with companies obsessed with "rockstar hiring"
jrs95 9y ago
I'm going to go on a totally off topic tangent, but this kind of makes me wonder why no-name comics aren't pursued more aggressively for TV. How many people are actually watching Conan because of name recognition, or the amount of money they're spending on production costs? It seems like a relatively unknown person with a smaller budget could outdo the competition just by actually being funny. Maybe I'm just too grumpy, but I really don't enjoy most of this segment at this point. Colbert in particular has been disappointing because I was a fan of what he did on Comedy Central.
- gdilla 9y ago
  Celebrities are their own brand. They have followings that are big (some bigger than others). That is the difference between them and no-names. Celebrities often have proven talent. Conan has decades of bankable funniness as a writer and entertainer - it's not a given any no-name can be that good or reliable.
- eberkund 9y ago
  I think it mostly has to do with TV broadcasting spaces, but what you're describing is largely what is happening with YouTube IMO.
- ryanianian 9y ago
  The barrier to entry in comedy isn't being funny, it's in gaining an audience that trusts your work. It takes mental energy to watch stand-up comedy. If it's not funny, I've wasted mental energy in watching them and trying to get the jokes, so I generally only watch the names I know. While many stand-ups may be funny, it takes a lot of work for them to get the name-recognition required to actually draw a large crowd. Agreed RE Colbert - it almost feels like wathing a totally different comic (it kinda is - he's playing a whole different bit now and his fake-pundit style had years to grow and develop). Struggling to bring this back to AI...agreed we're off-topic here :)
nora4 9y ago
What people make is ultimately what demand & supply dictate. On the other hand, for one-off cases where the market is super small, people make what they can negotiate. Of course, even in that one-off cases there is data about the pay of superstar within previous movies/shows/engineering orgs to use as an anchor. But what about your analysis which is based on unit economics. How does that tie in? (because it is of course relevant) By the fact that if you hire lots of super stars by market price, but your unit economic does not allow the operation to be profitable, you will eventually have to shut the operation down. Good bye super stars and whole operation!
dasil003 9y ago
Your overall point is well taken, although I would say one of the defining difference between top AI experts and late-night talk show hosts is that demand is constrained for the latter, whereas there is a very limited number of slots for the former. The effect of this being that all late-night talk show hosts are always subject to a direct financial comparison (but fortunately for their audience is sticky and belongs to them personally not to the television network). With top AI researchers, there's no real comparison or stack ranking, it's all about passing a certain bar which is objectively evident based on their past work, at least as long as AI is hot.
- adventured 9y ago
  > but fortunately for their audience is sticky and belongs to them personally not to the television network That's maybe half correct at best. Jay Leno could only take a small portion of his audience with him from the Tonight Show, if he chose to set up a competitor show. The same is currently true about Fallon, and likely far worse in his case today. Conan could never match his audience potential as host of the Tonight Show (pretty much no matter what he does, and certainly not on cable at TBS), because of the value of that specific platform, built up over decades and given its prominence on NBC. A very large share of the Tonight Show audience, stays with the Tonight Show, regardless of host (barring the next Johnny Carson abandoning the show, or a truly horrendous product implosion at the current show). That audience largely belongs to Comcast NBC. If Jimmy Kimmel leaves ABC, he would be replaced. Kimmel would struggle given the limited options, ABC would simply plop the next Kimmel into his spot and move on, with a large percentage of the same audience giving the next person a try. Craig Ferguson's audience did not go with him, as another example.
deleted 9y ago
[deleted]

sjg007 9y ago

It helps to be a celebrity and be "vouched" for.

jacquesm 9y ago

I don't see the parallel. A breakthrough or a patent is something that you do not know for sure you will achieve, but by hiring the best people in the field the chances of that happening go up and such competitive advantages are the cornerstones of corporate empires.

3pt14159 9y ago
And at scale works both ways if you consider the invention inevitable. It isn’t just that Google has the patent it’s that Apple doesn’t.
eberkund 9y ago
It's very similar, it's just that the metrics are not so easily measured. A top tier employee might accept the job only if their salary is 2x what a lower tier worker might accept. Now you have to balance out what you think the difference in likelihood between these two workers finding a "breakthrough" is, if what is a breakthrough worth to your business.
- jacquesm 9y ago
  So then, tell me what a Rob Pike should earn vs a Geoffrey Hinton vs Peter Norvig. I would not know where to begin to make that estimate. Whereas if a name in the entertainment business has 3 times the audience draw as another you could make a pretty good stab at what their relative worth should be.
  - eberkund 9y ago
    Yea, I don't disagree. It is clearly much more difficult to estimate certain things compared to an entertainer and how many audience members they can attract. That's part of the reason myself and another poster used it as an example. I think the point you're making is also what the article was trying to get at, that there are an unknown number of AI experts and it's hard to estimate what they should be paid which is why many of them are getting these crazy high salaries.
  - tomrod 9y ago
    > So then, tell me what a Rob Pike should earn vs a Geoffrey Hinton vs Peter Norvig. I would not know where to begin to make that estimate. Whatever they can negotiate, in my view.
  - asaph 9y ago
    They should be paid whatever the market will bear.

bkohlmann 9y ago

I think it's more of a winner takes all phenomenon in the Conan case. Usain Bolt makes millions because he's a tenth of a second (or less!) faster than many other people. Those other people - with the exception of maybe Justin Gatlan - make a far more modest salary. It's less than a 1% difference in performance that leads to orders of magnitudes differences in outcomes.

fierro 9y ago
interesting comparison!
mrlala 9y ago
Like the sumo wrestler phenomenon from Freakanomics.. something like the top 10 are extremely well off where after that it's crap salary.
devonkim 9y ago
Exactly, and winner takes all is extremely common for markets competing for rather limited markets. In sports, consumers really don’t pay much attention to high school athletes, car designs are becoming more and more homogeneous, and in pop music there’s increasingly more convergence in terms of style (although the irony is that the entertainment industry is entirely driven forward by trying to “discover” a new trend that appeals). My point is mostly that our collective attention spans are very limited and any business that depends upon attention from mass consumers will be constrained by the simple fact that we all only have 24 hours a day and that we can only support / raise so many children that then also only have so much time. This, it is a mass war for attention with primarily superpowers around (celebrities).
speby 9y ago
But he isn't being paid for being 1% faster .... he is being paid because he is the FASTEST. It doesn't matter if he was 0.5% faster, 10% faster, or any other percentage. It matters that he is the FASTEST. That's the label that draws people's attention, not the 1% incremental faster-ness. =)
baybal2 9y ago
Reminds me my first year as a webdev. I was extremely lucky to ride the apex web 2.0 hype/insanity wave. Now I can't believe myself that I, as a 21 years old and just 3 years of for-profit programming experience, got CAD 85k on first real job Canada for just jquery animations. Later down the career path in Canada, I was frequently asked "you worked for guy A and B, than must've been hell of a job?" or "how I got there to begin with?" All of them dismiss my explanation that "I just used to be on line 1 of google for thing A" The back side of the coin? The moment web 2.0 became a more of an "in-house" production with mid-to-big sized companies that no longer needed a "hired gun" outsider, and hype wave moved to other things I really hit a wall. Actually, on my next 2 jobs I took salary in $70ks and was contemplating selling major life assets after my last employer in Canada was unable to extend my work permit. Things went much better after I scaled down my appetites and stopped looking for employment with companies obsessed with "rockstar hiring"

jrs95 9y ago

I'm going to go on a totally off topic tangent, but this kind of makes me wonder why no-name comics aren't pursued more aggressively for TV. How many people are actually watching Conan because of name recognition, or the amount of money they're spending on production costs? It seems like a relatively unknown person with a smaller budget could outdo the competition just by actually being funny. Maybe I'm just too grumpy, but I really don't enjoy most of this segment at this point. Colbert in particular has been disappointing because I was a fan of what he did on Comedy Central.

gdilla 9y ago
Celebrities are their own brand. They have followings that are big (some bigger than others). That is the difference between them and no-names. Celebrities often have proven talent. Conan has decades of bankable funniness as a writer and entertainer - it's not a given any no-name can be that good or reliable.
eberkund 9y ago
I think it mostly has to do with TV broadcasting spaces, but what you're describing is largely what is happening with YouTube IMO.
ryanianian 9y ago
The barrier to entry in comedy isn't being funny, it's in gaining an audience that trusts your work. It takes mental energy to watch stand-up comedy. If it's not funny, I've wasted mental energy in watching them and trying to get the jokes, so I generally only watch the names I know. While many stand-ups may be funny, it takes a lot of work for them to get the name-recognition required to actually draw a large crowd. Agreed RE Colbert - it almost feels like wathing a totally different comic (it kinda is - he's playing a whole different bit now and his fake-pundit style had years to grow and develop). Struggling to bring this back to AI...agreed we're off-topic here :)

nora4 9y ago

What people make is ultimately what demand & supply dictate. On the other hand, for one-off cases where the market is super small, people make what they can negotiate. Of course, even in that one-off cases there is data about the pay of superstar within previous movies/shows/engineering orgs to use as an anchor. But what about your analysis which is based on unit economics. How does that tie in? (because it is of course relevant) By the fact that if you hire lots of super stars by market price, but your unit economic does not allow the operation to be profitable, you will eventually have to shut the operation down. Good bye super stars and whole operation!

dasil003 9y ago

Your overall point is well taken, although I would say one of the defining difference between top AI experts and late-night talk show hosts is that demand is constrained for the latter, whereas there is a very limited number of slots for the former. The effect of this being that all late-night talk show hosts are always subject to a direct financial comparison (but fortunately for their audience is sticky and belongs to them personally not to the television network). With top AI researchers, there's no real comparison or stack ranking, it's all about passing a certain bar which is objectively evident based on their past work, at least as long as AI is hot.

adventured 9y ago
> but fortunately for their audience is sticky and belongs to them personally not to the television network That's maybe half correct at best. Jay Leno could only take a small portion of his audience with him from the Tonight Show, if he chose to set up a competitor show. The same is currently true about Fallon, and likely far worse in his case today. Conan could never match his audience potential as host of the Tonight Show (pretty much no matter what he does, and certainly not on cable at TBS), because of the value of that specific platform, built up over decades and given its prominence on NBC. A very large share of the Tonight Show audience, stays with the Tonight Show, regardless of host (barring the next Johnny Carson abandoning the show, or a truly horrendous product implosion at the current show). That audience largely belongs to Comcast NBC. If Jimmy Kimmel leaves ABC, he would be replaced. Kimmel would struggle given the limited options, ABC would simply plop the next Kimmel into his spot and move on, with a large percentage of the same audience giving the next person a try. Craig Ferguson's audience did not go with him, as another example.

deleted 9y ago

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