How do people get famous (aka the economics of stardom)?
People ask me all the time, “how do I get famous?” or “how did they get so famous?” or “what have they got, that I don’t got?”
Professor Andrew Leonard from USC Annenberg explains it best when he summarizes the research of Sherwin Rosen and his theory on, “The Economics of Superstars.” Andrew unpacks the theory and research and how in the world of stardom, wealth tends to centralize with a few superstars for two main reasons:
Imperfect substitutes: Excellent quality is not replaced by lots of good quality options. Consumers tend to make the “safe bet” and to “go with the crowd.” The top stars don’t need to be a 10 out of 10, they can be an 8 or 9 out of 10 and with all the other front runners at being a 6 or 7 - who’s going to watch or listen to them? Look at the field of music or acting and when we look at the top stars and the people struggling to make it, there’s a fairly small margin of difference in terms of skill.
Zero marginal cost: With today’s creator economy, influencers growing their reach is done at zero marginal cost. The cost of your art being seen by one viewer is the same as one million viewers. This goes for all forms of art that are available in digital form.
Rosen’s theory on The Economics of Superstars, explains why a small number of people in certain fields, such as sports, entertainment, and business, earn a disproportionately large share of the total income in those fields. The theory was first proposed by Sherwin Rosen in his 1981 paper "The Economics of Superstars."
Rosen argued that there are two main reasons why superstars earn so much more than other people in their field. First, the demand for superstars is highly inelastic. This means that even if the price of a superstar's product or service goes up, people are still willing to pay for it. This is because superstars are unique and cannot be easily replaced. For example, there is only one Michael Jordan or one Beyoncé.
Second, the cost of producing a superstar's product or service is relatively low. This is because superstars can reach a large audience through mass media, such as television, radio, and the internet. For example, a superstar athlete can play in front of millions of people in a single game.
The combination of inelastic demand and low production costs means that superstars can earn a lot of money. In fact, Rosen argued that the income of superstars can be "supernormal" in the sense that it exceeds the amount that would be necessary to attract them into the field.
The economics of superstars has been used to explain the high salaries of athletes, entertainers, and business executives. It has also been used to explain the growing gap between the rich and the poor. See our pending article on why A.I. will not replace true art (coming in October 2023).