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Just how much should those other people be allowed to make?

Summary:
It’s a standard joke - or observation of human behaviour - that those rich people over there who must be taxed much more are defined as being those earning 10% more than the person making the demand. Perhaps we should expand this to business matters too:Channel 4 has urged the competition watchdog to broaden its crackdown on Google and Facebook to prevent broadcasters ceding millions of pounds in advertising income. The Gogglebox broadcaster has called on the Competition & Markets Authority to rein in distribution deals offered by the tech platforms that demand a 45pc slice of the advertising revenue.Is 45% too much? Channel 4 itself:£985m total revenues in 2019£660m total content spend£492m spend on originated contentIf we consider total content spend then Channel 4 charges, to feed its

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It’s a standard joke - or observation of human behaviour - that those rich people over there who must be taxed much more are defined as being those earning 10% more than the person making the demand. Perhaps we should expand this to business matters too:

Channel 4 has urged the competition watchdog to broaden its crackdown on Google and Facebook to prevent broadcasters ceding millions of pounds in advertising income.

The Gogglebox broadcaster has called on the Competition & Markets Authority to rein in distribution deals offered by the tech platforms that demand a 45pc slice of the advertising revenue.

Is 45% too much? Channel 4 itself:

£985m total revenues in 2019

£660m total content spend

£492m spend on originated content

If we consider total content spend then Channel 4 charges, to feed its own costs, about a 33% - instead of the 45% of Google or Facebook - margin. If we consider the spend on originated then Channel 4 charges those who make their programmes more like a 50% margin to feed their own cost base. Or, if we wish to be naughty with numbers here, a 100% markup.

Which is too much? Well, actually, our faith in human nature is confirmed whichever the correct number ought to be. For the complaint is coming, as ever, from those making a little less than those they’re complaining about. So, that’s all right then, humans are still humans.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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