Once Again, As The MPAA Whines About 'Piracy,' It Had Record Results At The Box Office
from the oh-look-at-that dept
There were reports late last year that the box office take for the movie industry was finally set to decline after years of records. It appeared that there just weren't that many big blockbuster hits last year, that many thought really hurt the industry. However, now that the numbers are out, it appears that, once again, the box office take has set a new record. And yet the MPAA still claims that its number one priority is "fighting piracy"? Why?Obviously, some will point out that the DVD business isn't as strong as it once was, though it's unclear how much of that may be a result of new business models like Netflix and Redbox, as compared to file sharing. That said, I laugh any time the movie industry folks point to the DVD market as the reason they have to fight piracy. I mean, it was just 25 years ago that Jack Valenti was declaring the VCR was going to be "the Boston Strangler" to Hollywood. And yet, now, the home video market is its lifeline? Sorry, but hasn't the industry cried wolf a few too many times?
The simple fact is that there are all sorts of business model opportunities for the movie industry. Theater showings (the seats and the social experience are great scarcities that sell well) is one such model. Services like Netflix where you're paying for "access" and "convenience" rather than content, is another. There are plenty of others as well, for those who wish to explore them. Shouldn't the MPAA's "number one priority" be to help the industry figure out these opportunities, rather than worrying about "piracy"?
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Filed Under: box office, movies, piracy
Companies: mpaa
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La LA LA LAAAA!
Piracy is destroying our industry
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That does not seem to me to be a very compelling argument.
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lurk moar.
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Mike's not saying that the MPAA should be grateful for what it's getting and shut up. It's saying that the MPAA could be doing smarter things with their time and money.
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the total number of tickets sold fell by 5 percent last year, but theater owners made up for the decline by raising prices an average of 39�.
That's the kicker - even with the price increased because of more 3D films, they sold 5% less seats. The public will not tolerate endless price rises, so unless they start selling more tickets again, well... you know the rest. Supply appears to be outstripping demand, and even Mike knows what happens when you do that.
Nice try on the spin Mike, but you ignored the key data (again).
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It invalidates it because there is a clear indication that fewer people are buying tickets. It's just like the concert business - fewer people buying more expensive tickets. Any economist can tell you that this is not a long term supportable model, especially if your customer base is slipping away. You keep shaving away 5% a year, and pretty soon the movie theaters are mostly empty, and the people paying $30 a ticket wonder why they do it.
So pointing only to revenue is extremely short term thinking. Then again, that seems to be a common way to look at things here, very, very short term.
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http://www.mpaa.org/Resources/653b11ee-ee84-4b56-8ef1-3c17de30df1e.pdf
Attendance has dropped over the last 10 years, from a peak of 1.57 billion tickets in 2002 to 1.34 billion this year - 230 million less tickets. More importantly (see page 6) the number of people attending movies (on a per capita has dropped from 5.2 to 4.1, a 20% drop.
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If only it were in 3D! They'd go crazy wild for it!
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So once again the solution is to make better movies and/or make the experience of going out to see them better.
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I hate to break it to you, but markets rise and markets fall - especially in global recessions - and have been doing so far longer than internet piracy has been around to blame it on. Show me a graph with data specifically chosen to show some trend and I can probably show you a longer-term graph showing the exact opposite trend.
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To equal the current drop, 1981/82 would have had to drop to something like 20 million. Clearly what is happening now is magnitudes of order worse.
The very graph you selected shows the fact. Care to debate them?
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"To equal the current drop, 1981/82 would have had to drop to something like 20 million. Clearly what is happening now is magnitudes of order worse."
What exactly are you talking about? The cited graph is revenue adjusted for actual buying power. What's this 20 million you speak of? Or this "magnitudes of order"?
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The early 80s of course was a recession, one with worse unemployment than we have seen during this one. Yet, here we are, with music sales having dropped by an order of magnitude more.
I am sure that piracy has absolutely nothing to do with it at all. Not at all. /sarc
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Seems simple enough to me.
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Okay, now that we're past your verbal errors, we can move on to your argument.
You provide a textbook example of a well-known artifact of human reasoning: the instinctive urge to rely Occam's Razor even where it doesn't apply - that if there are two explanations for something, the simpler one is more likely to be correct. The error here is that Occam's Razor only applies when the two explanations are equally plausible in all other factors. The flaw in human reasoning is that it favors simple explanations that explain part of the data - being content to simply ignore the data that doesn't fit - over complex explanations that explain all the data, and regards attempts to introduce other data as red herring to muddy the waters.
In the current context, the result is the thought process that there's no need to scour data from many different industries and consider complex systems of many different variables that could potentially affect sales of recorded music when there's a simple explanation that can explain the decrease with only a single variable: piracy.
The problem is this: all that data you didn't need to reach your conclusion still exists, even if you pretend it doesn't. The fact that your simple explanation fits one specific series of numbers (the sales values of music) does not change the fact that your explanation does not fit all the other data you dismissed as curious coincidences. Data such as the sales of games, DVDs, movie tickets, and music being tied together (source), where one increasing corresponds to a visible decrease in the others of the same magnitude. Or the fact that over the very same period of overall music sales decline we see that album sales fall just as singles sales skyrocket far beyond what's necessary to account for the drop in album sales (in other words, people are buying individual songs they like, rather than buying the entire album just to get a couple songs).
I could keep going, providing additional data, but I realize that the probability of changing your mind is very low, given that you already have your simple explanation and have no desire to change it. So rather than continue to provide data for you to sweep under the rug, I'll save both our time and simply stop here.
There's one last thing that I should mention, though. I've been following these numbers for years, and done so from the perspective of someone familiar with formal statistics both theoretically (e.g. what you learn in a statistics class) and practically (how statistics are actually used in real-life research, specifically in the natural sciences). I'm very accustomed to dealing with correlations of many variables, and have the experience to know how complicated reality is as the rule. Where I come from, it's never okay to only explain part of the data, even when the explanation is aesthetically appealing.
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- Raw, unadjusted industry revenue
- Total revenue adjusted for actual buying power
- Per capita revenue adjusted for actual buying power (the one previously linked)
- Album sales per capita
- Singles sales per capita
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Check the economic environment before attributing the 5% to "Piracy"
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Except, no, that doesn't follow. Logic and economics would suggest that less people go because the prices go up. If people didn't go and watch films solely because they watched them elsewhere that would suggest films where a ripped off version was available before theatrical release would flop, which simply isn't the case. And, by the way, the availability of pre-release copies has been the case for years in the UK due to the ludicrous release lag over here.
In my case, about 15-20 years ago I used to to see around 20-30 films a year in the cinema, 10 years ago it was probably around 10, 5 years ago about 2 and I've probably seen 3 or 4 films in a cinema since then. The reasons for this are two-fold. First, less and less films are interesting enough for me to want to go see them at the cinema and second the price of a night out at the cinema has gone up to the point where I can get a couple of courses of a damn fine meal in a good restaurant for the price or go take in a play at the local theatre, which is likely to be better acted. This despite having significantly more disposable income than I did back then.
And before you say "ah but that exactly proves my argument, you're a freetard pirate like all the rest", in fact 15 years ago I knew many of my local "freetard pirates" of the time and could borrow pretty much any film I fancied, often pre-UK release. I chose to go to the cinema to watch films (some I had already seen) because the value was there (i.e. experience + price), the value has gone so now I don't.
Same with DVD purchase, when DVD's first came out we bought quite a lot of back-catalogue stuff as it was released (often for vastly inflated prices in hindsight considering many were significantly old films) and often bought new films on release because the film was good enough to want to watch (again in some cases), now there is far less films I actually want to own and having pretty much got the back-catalogue stuff we want, tend to either not bother or wait 3-6 months until the DVD in question is in the bargain bin for 1/4 the price or less.
Blu-ray? Not impressed. I'm the first to love quality, and usually buy the latest, greatest technology, but Blu-ray simply doesn't have enough of an advantage over upscaled DVD for the overinflated price of media vs. DVD to be compelling.
So no, correlation is not causality and piracy is not proved to be forcing cinema prices up or driving audiences down. I don't have any more proof than you have except for my own experience as documented, but I would imagine the relationship is likely the other way round if anything: increased cinema prices are partially responsible for driving audiences down and piracy up. It's clearly working on average at the moment if profits are going up, but as you say there's a point where that's not sustainable.
I will lay you a wager that if "piracy" stopped in it's tracks the cinema prices would mystically not go back down. Just like when the oil price goes up the oil companies use it as an excuse to raise petrol prices, but they mystically fail to come back down when the oil price drops.
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My entire point is that Mike is attempting to paint the MPAA as being whiny (this after he has made 3 or 4 fairly whiny posts about the MPAA this week, do you see a trend?). But the truth is attendance is down, even with the appeal of 3D movies (which are selling a bunch of tickets) and that without the increased ticket sales and prices of 3D, things would be pretty crappy. As 3D big screens make it into the home, you can assume that the advantages of 3D will diminish in the theaters too.
Per capita movie visits are way down (particularly in the 18-25 area), and that is the real concern. You know, the peak demographic for piracy :)
I wouldn't expect movie ticket prices to drop if piracy disappeared. I wouldn't expect them to go up either. I don't think anyone suggested any great correlation.
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By very short logic chain you do indeed suggest a correlation between rising ticket prices and piracy, just before the paragraph in which you deny any such correlation. Which is it? If you are claiming that piracy is the reason for the rise then logic suggests it should fall if piracy declines. If there's no correlation then piracy is not a factor. Added to that you, or some other AC poster suggest directly on almost every occasion the subject of prices arises (and I paraphrase) "stop bitching about rising ticket prices it's all because of you pirates so it's your own fault."
Oh and "appeal of 3D"? Hardly universal - not one 3D film has appealed to me yet as they tend to be rather short on anything other than the 3D gimmick (you know like a plot) and I would consider any that did manage to appeal not worth the extra money for the 3D over 2D. Clearly others feel different but I do wonder just how long people will be willing to pay the inflated prices for such a gimmick - perhaps if the content does actually improve making it more than just a gimmick it might be a little more sustainable.
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Nope, I am stating no cause and effect. Change of attendance isn't the reason ticket prices went up, it is the arrival of 3D, which they are charging a premium for.
The only connection is that the positive results are due to the increase in ticket prices, even in the face of declinging attendance.
There is no causal relationship.
Oh and "appeal of 3D"? Hardly universal - not one 3D film has appealed to me yet as they tend to be rather short on anything other than the 3D gimmick
This is where you need to understand that you cannot paint everyone else's opinion based solely on your own. Plenty of people are willing to pay extra, and buy 3D TVs, and all that. It would appear that 3D has gotten quite a hold this time around. Gimmick or not, enough people seem to like it.
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All it took was a nice TV on sale in the shops and their business model went downhill. What an industry! The slightest bit of competition and they crumble and whine.
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Personally, my biggest problem isn't with the content providers. I think their observable business model is morally reprehensible, preferring legally attacking those weaker than themselves rather than working within reality to make the best of what they have, but it doesn't really suprise me from a corporation which will typically have the founding and only principle as "make as much money as (in)humanly possible and f*ck everyone else".
"Democratic" governments on the other hand are supposed to know better and are supposed to work for the betterment of the society they run and the fact that they prefer to feed, aid and feed off such conspicuous greed disgusts me. The greed of the corporations and the self-destructiveness of rampant capitalism wouldn't be such a problem if they could not basically buy the laws they want so that they can get away with suing anyone they want far beyond the bounds of lunacy never mind common sense.
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yea, i love having someone talking through a movie i paid $10 a ticket for. oh yea, how about some quality content too?
i really hope the video game market eclipses the movie market and kills that off the MPAA/RIAA. what do they make money doing? oh yea, sueing people.
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and a recession...
people only have so much money. more things to split it between means less per thing, so even with Zero piracy, the increase in Options is going to lead to any given option getting less. (and piracy has Zero effect on This bit because it doesn't use any of the budget!)
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Only 5%? It seems to me that middle of the "Great Depression 2.0" that the industry should be lauding that as a huge accomplishment.
I mean seriously, in a time of a 9% unemployment rate there is a heck of lot more industries taking hits a lot larger than a 5% drop in sales.
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Classic business strategy
Minion: Sales are down Boss, there's only one thing we can do
Boss: Are you pondering what I'm pondering Minion?
Minion: I think so, but how will we hijack a plane at this time of night.
Boss: Just raise ticket prices Minion, then go make me a vodka smoothie without the fruit, I'm trying to cut down on my cholesterol.
Minion: Raise ticket prices?
Boss: Think of it as the reverse Laffer curve Minion, without its immediate appeal to rationality.
Minion: Yes! do do! that voodoo that you do so well.
Boss: Drink Minion, go fetch! NOW!
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"Theater owners raised ticket prices by an average of 39�, but the customers made up for the increase by purchasing 5% less tickets."
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Other than you having absolutely no evidence for this statement, you really should remember that the only reason that video and later dvd sales came to contribute vast sums to the movie industry at all was over their objections and their claims that the vcr would destroy the movie business.
The suggestion regularly made here is that the digital age, brings the promise of expanding markets and profits yet further if the business responds to the new possibilities in a sane and sensible manner rather than trying to kill it with legislation while crying out that the "new thing" is going to destroy the movie business.
They did it before, they were as far wrong as it was possible to be then and are trying the same tack again, now.
Plus �a change
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"correct, there is no evidence to support my view on piracy"
Just typing that would have taken you so much less time and been more accurate.
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That does not seem to me to be a very compelling argument."
The argument from the industry is that piracy has been destroying it.
With successive years of record breaking box office, it is quite an achievement to maintain that stance and quite obviously untrue.
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MPAA: Internet piracy is putting people out of work!!!
2008: $9.64 billion (US/Canada), $28.1 billion (worldwide)
MPAA: Internet piracy is costing the economy billions!!!
2009: $10.6 billion (US/Canada), $30.3 billion (worldwide)
MPAA: Internet piracy is destroying the movie industry!!!
2010: $10.6 billion (US/Canada), $31.8 billion (worldwide)
Please explain to me how you can reconcile the statements about piracy with the fact that Hollywood keeps reporting record-breaking profits year after year. How are they managing to make those sorts of profits if their industry is being destroyed and people are losing their jobs?
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Enough to feed all the worlds hungry.
Pirates are literally starving people to DEATH!!!!!
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"The same thing we do every night, Pinky - try to take over the world!"
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Wait. We are on techdirt. Why actually look at facts?
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Why? Will that change the amount of profit that they made?
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Yes and No
Most people don't remember back far enough to see all the instances you're referring to (and Ars Technica had a nice history of); especially given that some of this predates any living person.
That said, it looks like lawmakers and the judicial systems in numerous countries are slowly wising up to the tactics used by the industry in the last several years, and it's in that short-term time-span that crying wolf so many times may end up coming back to bite them.
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Literally, theaters make their money from concessions. They make, basically, zero profit from ticket sales. Often, big budget blockbusters cost the theater more money per showing than they could possibly make back through ticket sales. The studios that make the movies are the ones that have the power to lower the fee to rent the reel. BUT, if they did that in order for the theater to make more money on concessions, then why shouldn't the movie studios demand a piece of the concession action?
^^^ This is exactly what's happening in the music industry as 360 deals become the norm. And it's not just majors, now even the indies are often looking to get in on 360 deals, which are bad news for artists. If your income ONLY comes from t-shirt sales, you'd be a fool to give up any piece of that pie.
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Hm
But I'm not sure the argument being made here is entirely fair, since it doesn't try to understand the MPAA side of the story...that said, it's clear they only want _more_ money. Obviously the MPAA tracks its books, and it knows its seeing booming profits, so why claim piracy is hurting sales? Because they want more money!
Again, there's no need to paint the MPAA as a bunch of bumbling suits who can't turn on a computer. They are clearly a bunch of smart folks, who can earn a buck, and they've been doing it for a very, very long time. And even in the face of all these technological disruptions, they are still killing profits - so let's give credit where credit is due, and realize that these people just want MONEY.
They may play stupid and scream, "Those pesky kids on their interwebz are stealing my music, so please Congress do something!" But we all know this is a ploy, they are smart, they can clearly see piracy is not a large a problem as once thought, but why let the facts get in the way of legislation.
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Make lousy movies that people will not even download for free.
(I downloaded Green Horten two months ago and still have not watched it)
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These people don't have great jobs, they don't earn fortunes and there isn't a lost sale for everything they download.
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A friend of mine was invited to a pre-release screening of a movie not long ago where a big security force of very large men in suits and ponytails performed a full TSA style pat down on every guest and required all to hand over thier electronic devices to be held until the show was over. They then proceeded to block all the exits with arms folded over their massive chests during the movie.
Since it seems be the norm now that movie goers are watched intently with night vision goggles - that all seemed like overkill to me.
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I know why they whine so much.
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Interestingly enough the figures in the report show that while the number of movies released have been going up and up over the decade, the number released by members of the MPAA have been going down.
In 2001 MPAA members released 184 and in 2010 141
compared to non MPAA members who
in 2001 released 270 and in 2010 419.
Maybe if the MPAA didn't waste so much money on lobbying for bogus laws to protect their members from non-existent problems then their members might actually have made more movies and/or more money.
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"If X is going up despite Y, then people should stop whining about Y destroying X!"
When X = "box office receipts" and Y = "piracy," then the above statement is clearly true.
When X = "creative output" and Y = "copyright," then the statement is clearly false.
I would think that if you really wanted business models based on "free" to succeed, you'd want piracy to stop also. After all, if people really had to pay the asking price for content, it would make the free alternatives that much more attractive. Supporting piracy just undermines the creation of free content.
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The film industry makes outrageous, unprovable claims every year about huge losses due to piracy. Yet they continually post record breaking profits.
This is incredibly hard to reconcile with the average person because it simply doesn't add up. But in true paytard fasion you are able to twist the insane, record busting profits made into a dig at "pirates" and techdirt.
Really, your credibility is zero.
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Techdirt makes outrageous, unprovable claims every week about huge creative losses due to copyright. Yet the creative output of the world is higher than ever.
This is incredibly hard to reconcile with the average person because it simply doesn't add up. But in true paytard fasion you are able to twist the insane, record busting profits made into a dig at "pirates" and techdirt.
This is incredibly hard to reconcile with the average person or politician because it simply doesn't add up. But in true Techdirt fashion you are able to twist the insane Cambrian explosion of content into a dig at "paytards" and hurf durf about oppression and repression.
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ON the flipside, if you embrace the fandom, and allow them to expand on your universe (as the DiMartino brothers have with Avatar: the Last Airbender) you improve creative output.
IN the case of the MPAA and RIAA, they're whining that piracy is killing their industries when revenues scaled for buying power are higher than ever before. This disproves their claim in a testable environ. You find the study that definitively proves that copyright is actively encouraging creative output beyond the margin of error, and come back to me. Until then, though, no. Just NO.
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If the studios made available 720p and 1080p movies for download with no DRM, then I'd glady pay the same as what the Blu-ray or DVD costs. But they don't. Any online downloads are riddled with DRM that greatly restrict on what device I can watch, suddenly decides to stop working at time, and the host of other problems. Releasing no-DRM versions will NOT increase piracy. People can easily get them now unofficially. It will increase sales.
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Not to defend buying DVDs, but if you play them on a computer with either "AnyDVD" or "DVD Region & CSS Free" installed, you can skip right to the main menu at any time. It's nothing more than a script on the disc that tells the player not to let you skip ahead, and all DVD players are required to obey that stupid command.
Supposedly VLC can do this as well, but I've never had any luck getting it to play a retail DVD.
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That of course means you will soon be branded a criminal for not watching the adverts branding you a criminal just as much as for "stealing" the content.... next step strapping you to your chair and forcing you to watch the indoctrination material. Compliance is your friend citizen.
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Those unskippable menus infuriate me even more when my 4-year-old wants to watch a movie.
It's less annoying, however, than the "you wouldn't steal a care" commercials at the beginning of movies in the theater. I just paid 12 bucks to see this movie in theater, and you're telling me how stealing a movie is bad? Seriously, fuck off.
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Doesn't everybody?
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[ link to this | view in chronology ]