Brad Pitt and Jennifer Aniston have cut the asking price of their Beverly Hills house; possibly due to a phenomenon I like to call the "celebrity effect."
The now-divorced Hollywood stars had been asking $28 million for their five-bedroom, nine-guest-suite and three guest-cottage spread. Surprisingly, however, there just hasn't been any interest in that price, even in Hollywood, so now the asking price is $24.95 million. A steal.
Considering the fact that Brad and Jen only paid $13 million for the house - and even allowing for the renovations made on the 80-year-old "fixer upper" - you might think the house is still overpriced. Local real estate experts agree with that assessment, but I would expect the couple will get very close to what they want. That is, they will as long as they remain popular.
The reason? The "celebrity effect." As I have found, an actor is essentially - and for business purposes - a money-making machine. He or she makes money for himself or herself, of course, but he or she also makes money for whatever studio produces their projects. The presence of a Brad Pitt on a movie guarantees a larger audience than might be true if a lesser-star were on the film. The fact that some stars are more sought after than others makes them, in essence, a financial asset, albeit ones who must be courted and wooed by those producers who want the revenues they will generate. Such actors employ huge staffs, all of whom are dedicated to enhancing the profit-making potentential of the star by making sure they appear in good (e.g. money-making) films, endorsements, etc.
The "celebrity effect" is what drives this entire process, because without it the star would have no money-generating power at all. And the "celebrity effect" is due entirely on public perception and appeal.
In no other business is profit based on so ephemeral a basis. Microsoft's empire is built (for better or worse) on the ubiquity of its PC operating system; Brad Pitt's financial worth, by contrast, is based entirely on how much we, the audience, likes him. A lot of people don't like Microsoft for a lot of reasons - yet they still buy Microsoft products because they need them; for most people, Microsoft makes the only software available for the hardware in which they are heavily invested. But if we don't like Brad Pitt, we don't have to see his movies - and that means that Brad Pitt, Inc., is more at the mercy of film audiences than Microsoft is to its customers.
So if you like Brad Pitt and Jennifer Aniston, then it is worth it to spend $24 million for a house in which they lived for only two years. The popularity of the people give such a house an intrinsic value that is independent from other houses, where buyers are more interested in such quotidian factors as distances to school and proximity to bus stops.
When a celebrity couple decide to split, I have found, their decision affects their potential value as money-machines because of how the public may react to the divorce. Even divorced, Brad Pitt and Jennifer Aniston remain at the top of their earning-making potential because each of them have retained their appeal to their respective audiences.
That's the "celebrity effect." Based on their current audience appeal, if Brad and Jen want to price a doghouse at $1 million, someone will be willing to pay it.
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