Piracy Continues Killing The Movie Business To New Record Highs
from the yet-again dept
So, earlier this week, the MPAA came out with its annual report that shows that once again, its box office take hit new record highs. This same thing happens basically every year, so we almost didn't cover it at all this year. It's kind of old news. But people keep submitting it, and so we'll oblige, but mainly for the chance to repeat BoingBoing's awesome title on its story over this: Motion picture industry continues to stagger under piracy with mere record-breaking income.
The report further notes that ticket prices have continued to rise pretty consistently over the past decade from a $6.21 average price in 2004 to $8.13 last year. For an industry supposedly being destroyed, you'd think they wouldn't be able to get away with raising prices... but, apparently (as we've been pointing out for nearly two decades) going to the movies is a different experience than downloading a film and people are paying for that experience.
And, yes, just to cut off the line of criticism: this only applies to theatrical revenue, and not home viewership. But that's somewhat a red herring, given that, if left to the movie industry, there basically would be no home video market to speak of at all.
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Filed Under: box office, movies, records, tickets
Companies: mpaa
Reader Comments
The First Word
“"Downstream sources" you and your friends insisted would be the boston strangler to the very industry you now say they're critical to. Don't make me laugh.
Low budget motion pictures, which are most vulnerable to piracy don't get box office revenue, by-and-large. They have a particularly difficult time finding funding as lenders know without that box office revenue, it is a much greater risk to fund a motion picture.
Which is why more films are being made today than ever before? Low budget films are not, at all, "more vulnerable to piracy." Where did you get that line of bullshit from? First off, nearly all of the top unauthorized downloads are for big budget films.
Second, there are ALL SORTS of new opportunities for indie small-time filmmakers these days. Between crowdfunding, direct-to-fan, Netflix, Amazon, iTunes and the like, more small independent films are (1) being made (2) making money and (3) being seen today than EVER BEFORE IN HISTORY.
Please try to pay attention this year so I don't have to come back and school you again on this subject in '15.
You might want to actually learn something next time so that we don't have to prove you wrong yet again.
Seriously: tell your bosses they need talking points that haven't been debunked.
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1. On average, films with a N. American box office release make about 25% of their overall revenue at the box office. All the rest come from downstream sources. The same sources that are subject to the corrosive effect of piracy.
2. Low budget motion pictures, which are most vulnerable to piracy don't get box office revenue, by-and-large. They have a particularly difficult time finding funding as lenders know without that box office revenue, it is a much greater risk to fund a motion picture.
Please try to pay attention this year so I don't have to come back and school you again on this subject in '15.
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Imagine how much more money they would make if it weren't for those meddling pirates.
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Please, won't someone think of those poor studio execs!
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It gets even better.
There's the glut of supply. There's the low prices of older content caused by that glut of supply. Then there's "evil" stuff like Netflix. I don't need to "buy" things. I can rent them very cheaply. I can either be distracted by legitimate and nearly free sources of content, or just use those same channels to pay the minimum amount I can get away with.
With my home theater, I have very little motivation to bother with the real thing. With Netflix, I can just get the BluRay for the marginal cost of NOTHING.
With all of the built in home theaters that come with McMansions in the suburbs, I am surprised that people go to the movies anymore as much as they do.
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Perhaps the problem with the "low budget" films is the fact they try and follow the failing model used by the big players because they have the insane belief that is the only way for a film to make money. Perhaps if they handled their own distribution with a company who didn't offer them a crappier deal to make sure the big guys don't punish them they would be better off and get better market penetration...
or perhaps crap films make crap money because... they are crap.
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2: nobody gives a fuck.
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"Downstream sources" you and your friends insisted would be the boston strangler to the very industry you now say they're critical to. Don't make me laugh.
Low budget motion pictures, which are most vulnerable to piracy don't get box office revenue, by-and-large. They have a particularly difficult time finding funding as lenders know without that box office revenue, it is a much greater risk to fund a motion picture.
Which is why more films are being made today than ever before? Low budget films are not, at all, "more vulnerable to piracy." Where did you get that line of bullshit from? First off, nearly all of the top unauthorized downloads are for big budget films.
Second, there are ALL SORTS of new opportunities for indie small-time filmmakers these days. Between crowdfunding, direct-to-fan, Netflix, Amazon, iTunes and the like, more small independent films are (1) being made (2) making money and (3) being seen today than EVER BEFORE IN HISTORY.
Please try to pay attention this year so I don't have to come back and school you again on this subject in '15.
You might want to actually learn something next time so that we don't have to prove you wrong yet again.
Seriously: tell your bosses they need talking points that haven't been debunked.
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How else are they going to track you when that public MPAA report shows up on torrent sites? This is the MPAA - even freely available pubic data must be subject to rigorous distribution controls. Just like everything else they put out, this report can ONLY be distributed through the MPAA's authorized sources.
Once you've gone control-freak to the magnitude that the MPAA has, you can't just do a 180 and start half-assing it.
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Do you consider Netflix piracy? I watch a lot of low-budget movies on there, but strangely many are absent. I would think that Netflix would be a gold mine for a low-budget film.
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Response to: Anonymous Coward on Mar 28th, 2014 @ 1:06pm
Try starting with cited figures (the industry is terrible at releasing accurate non-theatrical figures, so I'd like to know your sources), then try addressing the very real fact that restrictions and not piracy is often the sources of any supposed "losses".
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Re: It gets even better.
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It does appear your replies come from a script of talking points supplied by your handlers.
If that is so, your "masters" appear to be very stupid and out of touch with reality. They also seem to be deeply mired in denial.
On the other hand, if those points you thought you were making came out of your head, then you seem to be the stupid one.
Regurgitating points long ago proved to be lies and distortions will convince no one that can read and knows to avoid the bullshit spewed by the copyright maximalists.
Oh, and by the way, if the ideas you wrote are indeed yours, then your handlers should still be considered stupid for hiring someone as ill equipped to do battle on their behalf as you seem to be.
Perhaps you should retire from writing until you become knowledgeable enough to form some accurate and informed opinions.
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closed market
Who knows Where Theaters get FOOD and goods from..
they have to be registered to a group and ONLY buy from that GROUP..
Can you say SAME AS ' girl scout cookies'..
Where you could go tot he STORE and buy it for about 1/2 the price.
MOST of the money EARNED at the theater is from goods sold, the movie is rented/leased to DRAW you in to sell you goods.
MIDDLE MAN to death..is that a concept?
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Amazing. Just amazing.
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The decimated box office returns of Avengers and Harry Potter which the industry doesn't want to share...
How is that the pirate's fault?
Comparing some guy with a $1000 prosumer grade camera and a bunch of friends shooting on weekends in the neighborhood to a $1 million + film is a joke.
They made some good movies
More proof
People make documentaries too
The point is that movie making has been given to the masses and even a $50 movie can command a larger audience than when the gatekeeper model worked. There's plenty of options and they don't have to go through Hollywood to do it.
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No one's talking about amateur filmmaking. You're making that up. What percentage of films at Sundance this year were funded by Kickstarter? How many films that NEVER would have been made are now possible thanks to Netflix?
Talk to famous professional filmmakers Ed Burns and Kevin Smith, who are both having career renaissances making *professional* low budget films that are entirely possible only because of these new distribution options. Hell, Smith has set up "Kevin Smith presents..." in which he helps films (generally in that $1 to $6 million range) get distribution and attention around the globe. I know tons of indie *professional* filmmakers who are today excited about how they actually have a chance to do stuff.
In the past they didn't. Those films in the past were crap shoots. If they didn't get into Sundance/Cannes and be the 1 to 3 indie films that got attention that year they were complete failures. The films today can and ARE doing MUCH better because they're not reliant on getting distribution deals from a major studio.
Look, I know you make your money spewing the bullshit the major studios spew, but seriously, don't go down this road. You're going to end up looking really, really stupid.
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The next point why this number is irrelevant is, because a huge amount of that money is not necessary anymore to finance special effects and filming equipment, because technology has evolved in the last decades at an astonishing rate making CGI and camera equipment of exceptional quality easily affordable to virtually everyone. Have you seen any amateur movies and short films recently? visual quality on par or better then hollywood productions of 5 years ago. And way better written in many cases. The only thing that these productions lack are big name actors and considering their average acting ability, that is far from a loss.
Also that number is further irrelevant as a metric, because the next argument is about making x million back. let me tell you a secret, there is no inherent right to ever making anything back. That x million is an investment with risk of total loss. you have to convince people that they want to pay for it and you don't do it by either making crap or being a general jackass with a reputation somewhere below used car salesman and only slightly above corrupt politician. Your studios are entities, which a lot of people don't *want* to give money to because they are so reviled for what they have done and continue doing.
Your employers or overpaid execs in an industry that is way past their best before date.
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When a movie is bad, Twitter, Facebook, G+, Youtube, Rotten Tomatoes, etc., with a SLEW of reviewers lets us know within SECONDS how bad the movie is.
The mere fact that you can find this information out so quickly is what's hurting those "decimated films".
All piracy does is increase the amount of people who see it.
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http://whyipirate.blogspot.com/2012/04/theatrical-movie-business-is-dying.html
http://whyipir ate.blogspot.com/2012/04/theatrical-movie-business-perished.html
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Response to: Anonymous Coward on Mar 28th, 2014 @ 1:06pm
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Re: Response to: Anonymous Coward on Mar 28th, 2014 @ 1:06pm
The destruction of personal rights in favor of corporate ones are clearly not necessary. Neither are expansive copyright powers or the overhanded enforcement tactics that come along with.
The studios are the biggest thieves of them all.
David Prowse is still waiting for the Star Wars films to make a profit.
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DMCAed!
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You are a joke. Every time an independent artist comes out and says that piracy helped to spread the word about his work you chucklefucks come and say nobody downloads/pirates indie shit. And now suddenly they're "vulnerable to piracy"?
You get schooled on this subject every week of the year.
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Re: Australian prices
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US Home Video Revenue Down 25% Since BitTorrent
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Re: US Home Video Revenue Down 25% Since BitTorrent
I think you missed an important step here. I'll let you figure it out.
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Di gital sales are up 50%.
What you're seeing is the decline of physical media. If piracy is the reason for the decline why are digital sales growing so quickly?
The decline of the record industry is the result of unbundling. People are buying more singles than ever, but the industry is making less profit because they can't charge people for music they don't want.
http://www.theguardian.com/music/musicblog/2013/jul/12/singles-sales-music-industry-albums
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Topline revenue in the US and Canada is essentially flat. That comes only due to significant ticket price increases in the last few years, more 3D, and similar income supporting steps. In pure attendance, the numbers are way down from their peak just before the start of the decade of piracy. If current ticket prices combined with those attendance figures, the movie industry would be booming.
Also, you have to consider that this income is being made by having many more movies on offer, and having a much shorter in theater time for each movie. That means that compared to back in peak times, you are looking at twice as many releases competing for essentially the same size pie. The net effect is average income per movie has dropped in half.
It's easy to get caught up in the numbers and realize that almost all of the true increase comes from the opening of the huge Chinese market, which only a few years ago did not exist in any meaningful way. If you back that situation out, then you are looking a much poorer international performance as well.
It should also be pointed out that generally piracy is key to the time frame after the movie has been released on DVD or as digital in some manner such as PPV. The DVD market is truly suffering, decimated by a combination of both legal sources like ITunes and Netflix, but also heavily because of piracy. The easiest way to spot it is to look at sales figures of equipment like home NAS drives, media streamers, and the like. This seems to be a big enough issue that it's having a knock on effect to theater attendance, with at least some people choosing to wait until they can download a copy instead of going to see the movie in theaters.
What is happening in the movie industry pretty much parallels what has happened in the music industry. Concert revenues have marginally increased mostly because of huge increases in ticket prices, and at the same time recorded sales have dropped 50% in just over a decade, INCLUDING ALL DIGITAL SALES. If you look only at the concerts, you might think the sky was rising. But really, it's the clouds that are a little close to the ground fogging your view.
It's fun to watch Techdirt turn into the Iraqi information minister on stuff like this, but you really have to be willfully blind not to see reality.
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http://www.gartner.com/newsroom/id/2614915
Music revenues are decreasing because people are buying singles rather than albums.
The DVD market is suffering because physical media is a hassle to deal with.
A 10% drop in tickets sold could be accounted for by 2006 having a lower unemployment rate.
United States Unemployment Rate
2006 4.7
2012 7.9
http://data.bls.gov/timeseries/LNS14000000
Tickets Sold 2013: 1,335,744,309
Tickets Sold 2006: 1,412,732,924
http://www.the-numbers.com/market/2013/summary
http://www.the-numbers.com/market/2006/su mmary
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sick sheep!
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But looking at piracy as the single cause for alleged losses does?
It's fun to watch indurstry shills turn into the Iraqi information minister on stuff like this, but you really have to be willfully blind not to see reality.
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fixed that for him
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Then why is the usage of Netflix increasing? After all if piracy was a problem then the usage of Netflix wouldn't be increasing wouold it. Guess people find it more convinient to use Netflix and pay to stream then to buy a dvd. Strange how piracy doesn't affect Netflix.
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http://www.usatoday.com/story/tech/personal/2014/01/13/home-entertainment-sales-rise-2013/44 56151/
What's killing the record industry is their inability to force people to buy music they don't want.
http://www.theguardian.com/music/musicblog/2013/jul/12/singles-sales-music-industry-albums
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Re: sick sheep!
But I'm sure you can believe that people who are paid by the industry to defend them are defending the industry here.
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Jeez, if you're going to whinge about the suffering of the DVD market you might as well complain about the suffering of the VCR, laserdisc and reel-to-reel film markets as well. Complaining about the decline of a superseded technology makes you look a bit silly and won't convince anyone your argument has merit.
"The easiest way to spot it is to look at sales figures of equipment like home NAS drives, media streamers, and the like."
Yes, keep on demonizing modern technology. Coz that approach has worked so well in the past...
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What people take strong issue with is the loud and continuous claim that piracy is the sole cause of massive industry losses, while doing your best to ignore or obfuscate the non-piritanical causes that are largely of the industry's own making or beyond anyone's control (GFC), and grossly over-stating the dire state of the industry.
Here's a tip, change the message because nobody believes you.
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Okay, this isn't a bad argument. If there are twice as many movies showing in theaters and the total box office revenue hasn't doubled and production costs haven't dropped significantly then the amount of profit would be lower. Basic math.
However, as they say in Wikipedia, "citation needed." You now need to provide some evidence that the numbers you gave are accurate and not just pulled out of your ass.
If you can provide good solid data backing up your assertion, you still have the problem of proving piracy is the cause of this shrinking of profit margins. This is very difficult to prove. To be fair, it's equally difficult to prove that piracy isn't the cause.
There are also other issues here, such as the fact that the purpose of copyright is not to ensure large profits for media companies, but only to ensure progress in science and the useful arts. If more movies are being made now than in the past but profit margins are lower, I'm not really seeing the problem. It seems like copyright's constitutionally-stated purpose is being fulfilled. If piracy is causing a reduction in profit margins, it only becomes a problem if the reduction grows severe enough to result in fewer films being made.
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http://boxofficemojo.com/yearly/chart/?yr=2013
http://boxofficemojo.com/yearly/chart/?yr=2006
htt p://www.the-numbers.com/market/2013/summary
http://www.the-numbers.com/market/2006/summary
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Compare to Automotive sales over a similar time-frame.
http://www.goodcarbadcar.net/2012/10/usa-auto-industry-total-sales-figures.html
2006 16,560,989
2013 15,582,136
Clearly this means that people are downloading cars and piracy is killing the automotive industry.
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If these numbers are accurate, it looks like his hypothesis just got falsified.
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That's not a positive thing, at least this behavior is confined to top 40 radio music.
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These days it's difficult to find a dvd recorder for tv, it seems like there was a concerted effort to kill that technology or make it hard to find. I found one on ebay, so my mom got back regular digital cable and got rid of the DVR renting fees from the cable company. Bye bye fees, with just 10 double layered dvd's she can rotate for a long time those disks which copies signals coming from her tv.
But how many people are set up this way now ? Hollywood caused most of the internet piracy they detest so much. Even if it's not stealing, because stealing involves taking away the file and making it inaccessible. That's also your specialty.
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You almost got the point, but just missed it. Each of those technologies are things which discouraged visits to the theater, and more of the old "wait for it to come out on..." mentality. I am sure everyone knows the concept of a $1 movie, you wouldn't buy a theater ticket for it but you might spend $1 to rent it for the night.
Piracy and Netflix actually have about the same effect, which is a near all you can eat salad bar approach to entertainment, the only different is that Netflix pays an amount (smaller than DVD sale income) to producers, and piracy clearly does not.
Movie theaters are clearly not a superseded technology. Mike Masnick's own argument is that they are thriving.
"keep on demonizing modern technology"
I am not demonizing technology. I am only saying that people aren't massively buying NAS and media streamers to play their Christmas home movies. If you want to see the volume and effects of piracy, you have to look at the amount of equipment bought specifically to support it by end users.
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http://www.techdirt.com/articles/20091027/1255556697.shtml
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There are several factors that harm the record industry. To blame everything on piracy is disingenuous at best.
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That might make sense if the only uses for that technology was piracy.
http://www.mirror.co.uk/tv/tv-news/netflix-itunes-spotify-help-boost-2976974
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That link? I can't read the article because of the login.
When would you consider peak times to be?
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Add to this all the self produced content, like pictures and videos, and yes it is possible to fill a large capacity drive. without pirating anything.
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Damn you guys are slow learners. That's exactly the argument made about VHS/Betamax, and not only did it fail legally, it turned out to be spectacularly wrong, to the industry's (undeserved) benefit. Forgive us if we don't believe it this time either.
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Redundant movies
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What is the title of this article?
"Piracy Continues Killing The Movie Business To New Record Highs."
It's the likes of you that " continually mis-frame the issue."
Mis-framing the issue is showing the revenue generated from ticket sales and trying to say piracy has had no effect or little on the movie business. So by the same logic, piracy has not effected the music business because of the number of people that go to concerts?
"What people take strong issue with is the loud and continuous claim that piracy is the sole cause of massive industry losses."
So industries that lose money to piracy should do nothing about it and not try to combat it? I don't understand the logic and no other industries would be inactive if a consumer could acquire product for free.
"Here's a tip, change the message because nobody believes you."
I didn't know I was the voice of the movie and movie business. But I will take your tip under consideration.
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When those actions to 'combat piracy' have shown time and time again to be completely useless at causing more than a blip in piracy rates, while at the same time screwing over everyone in major ways, yeah, I really wish they would do 'nothing', if that's the only alternative.
However, as this site has pointed out for years now, with countless examples to back it up, the best way to fight piracy is not more laws and harsher enforcement, it's to provide a better service for a reasonable price.
That's it.
If the 'entertainment' industries really wanted to 'stop piracy', they could do so, and in fact it wouldn't take much effort at all to absolutely decimate piracy rates, and increase profits and customers enormously.
Probably the best example of this is Netflix. Whenever that service enters an area, piracy rates plummet, as people are more than willing to pay a reasonable price for access to content if it's made available to them.
Mind, this is even with services like Netflix being crippled by the 'entertainment' industries via restrictive licensing, where they only get to show what they are allowed to show, think of how popular and effective at drawing people away from piracy they'd be if they were truly able to compete on content with filesharing sites.
However, strip away the illusion that the reason they're doing what they are is to 'combat piracy', and you see what it's really about: control.
As I said, they could all but eliminate piracy, but choose not to, and it's because to do so would require them to hand over the control of their content.
DRM is one of the factors that drive people to piracy, so that would have to go, and all the control it grants them as well.
Lucrative 'exclusive licensing deals' drive people to piracy, by locking content into services that are either prohibitively expensive(due to the 'exclusivity'), or flat out not available in certain regions, so those would have to go too.
Region locking/pricing drives people to piracy, by making it so the same content either comes out at drastically different times depending on where you live, or never in some cases, so they'd have to treat the distribution network that is the internet as what it is, global, and price and make available the content accordingly.
Lack of availability drives people to piracy, it's kinda hard to buy a movie or song/album if it's not available for some reason(with the previously mentioned 'exclusive licensing' and 'region locks' being the prime culprits here), so they'd need to make their content, all of it, available.
Ease of use/access drives people to piracy, it doesn't matter if the content is available, if paying for and watching it involves signing up for a bunch of different services, and jumping through dozens of hoops before you can get to it, so they'd need to streamline that and make it easy to pay, and easy to watch/listen.
Excessive pricing drives people to piracy, people don't like feeling ripped off, and charging the same price for a temporary digital good as it would cost to buy the physical version will certainly get people upset, so if people are only 'licensing' a movie/album, not buying it, the price needs to drop, significantly, to reflect that.
There are a ton of ways they could decrease piracy, if they truly wished to, but at the core the only reason they care about 'piracy' is that it gives them an excuse, a 'justification', to buy more and harsher laws to maintain the control and power that they believe they are due.
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I totally agree and agree with the majority of your points. Most industries are slow to change and the movie industry will be forced to change and make content available globally as the internet has erased borders, just as the music business was forced to. How to determine the price for access to content transitioning from a model determined by regional licensing. That is the issue, not either piracy is the sole issue/reason for profit loss or that piracy great and nothing should be done about it.
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I remember concession lines being quite long when I was a kid, whereas nowadays there is rarely a line for them at all even for movies that are sold out. So you're not the only one who finds them insane. Most people just don't buy anything at the concession stands at all anymore.
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The title in no way claims that piracy has had no effect on the movie business.
"So industries that lose money to piracy should do nothing about it and not try to combat it?"
Ugh, this question has been asked and answered so many times it's becoming a running joke. If companies want to "combat" piracy, they should start by looking at how spectacularly unsuccessful their past efforts have been and try something different. If you keep doing what you've always done, you'll keep getting what you've always got.
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Never mind that you automatically assume I pirate pornography. But that's how you copyright folk roll.
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As it is, you've written off anyone who doesn't experience content per your prescription and you've got the nerve to whine at us for that? Get over yourself!
Address the market by providing content we want in the way we want to experience it at a price we are willing to pay. To guarantee covering your costs, start a fundraiser prior to making the movie. That way, at least your costs are covered. The rest is gravy. TD is chock full of business models film makers can avail of so there's no excuse to continue this nonsense AND get our government to enforce your imaginary property rights.
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Re: Amazing. Just amazing.
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Re: Re: Amazing. Just amazing.
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Uh, that's the problem, LAB. Licensing. Geographical limitations are one of the reasons people are driven to piracy to obtain what they want. Love it or loathe it, if they find out they can use a VPN to obtain it cheaper from an Indian supplier, that's where they'll go.
Set a reasonable global rate and if people want it, they will buy it. If it doesn't sell well or gets pirated, drop the price till sales rise. It's probably not worth going lower than $0.99. You can also provide links to download it for free on a site laden with adverts or with Flattr, PayPal or other donation options. Or you could do all of that.
As we keep saying, the best and most effective way of dealing with piracy is to meet market demands, not by criminalizing people who want your stuff.
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Everybody wants services for free. It's not just you.
Get over yourself.
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