Why are celebrities paid such excessive amounts compared to the rest of society?

[Greenspan]

I'm posting this in the economics section because I want an economics answer. Celebrities make millions of dollars for doing very little, and when you look at what they contribute to society it's tiny; compared to someone like a doctor it's absurd. This seems like a failure of the Free Market system, there's a significant discontinuity between the income these people recieve and the social benifit they provide.
Good response Yo, Teach! But I'm still curious. Why is there a specific demand for only, as you put it, "truly famous" people. Like you said, there are tons of great actors/musicans/etc out there. Why does the movie company have to hire Will Smith, when they could hire someone else just as good for a lot less? Do entertainment productions really require truly famous people in order to be sucessful? Why?

[Kathleen G]

Celebrities get paid more because we pay them. We pay hundreds of dollars for concerts and sporting events and that money goes to the musicians and athletes. We also pay to see a movie and that money goes to the celebrities. TV actors get paid because of us as well. A lot of us watch the show, commercial prices during the show on the network go up, and as a result, they get paid more. So, in conclusion, celebrities get paid excessive amounts because of the rest of society.

[Yo, Teach!]

Good question! I am glad that you placed this in economics because this really is an economic question.

To start with, you have to remember that price is set by two forces: supply and demand.
The supply of people who WANT to be famous is almost unlimited. Shouldn't this lead to a low price for celebrities? Well, we need to take a closer look at this first statement.

The actual supply of people who are famous is actually very limited. This is because of the limiting factor of public attention. I think we can all name someone who was once famous, but we haven't heard from in a long time. In fact, VH1 made a whole series called "Where are they now" about these people. So there is a limited supply of truly famous people and they have to fight to stay famous.

So because the demand for famous people is high (TV, Movies, 24-hour news shows, countless magazines, websites, etc.) and the supply is very low, the price is thus set very high and Will Smith can ask for 100 million for a movie.

Remember in economics, it does not matter whether your contribution is 'good' or 'bad,' it only matters whether there is high/low demand and high/low supply