MPAA Report Shows How The Internet Is Saving The Film Industry, Not Destroying It

from the told-you dept

Wed, Apr 11th 2018 12:06pm — Timothy Geigner

The MPAA has long found itself in the odd position of cheerleading its own industry's never-attained demise. One of the core functions of the organization has been to demonize the internet with incessent discussions about how piracy is "killing" the industry, a death that never seems to take. Others have posited that the movie industry needs the internet more than the other way around, which hasn't prevented Hollywood from waging a clandestine war through pricing and burdensome licensing arrangements with service providers that actually stave off piracy, such as Netflix. Whether Hollywood knew it was waging this war is an open question, but the end result of its tactics were to tamp down the usefulness of Netflix.

And, yet, Netflix grew and grew anyway.

Which perhaps has brought us to something of a turning point. There is a major change in the MPAA's latest annual report, one which serves to laud the internet for saving its industry, instead of killing it. The MPAA has decided to finally start including home-viewing numbers and revenue in the report, and the numbers make it quite clear where the industry's revenue is coming from.

Breaking from tradition, newly installed MPAA chairman-CEO Charles Rivkin has decided to include home entertainment spending in the MPAA's annual report on the health of the film business. Previously, the report focused solely on theatrical revenue. There's good reason for the change-up, considering the explosion in digital subscription services, compared to the volatile theatrical market and the demise of DVD sales, once the jewel in the crown of Hollywood's profit machine.

In 2017, combined global spending on theatrical and home entertainment hit $88.4 billion. Digital home entertainment, which includes streaming services, soared 31 percent year-over-year to $32.1 billion, while physical home entertainment spending continued to plummet, down 15 percent to $15.7 billion. But, thanks to digital — up a staggering 161 percent from five years ago — total home entertainment spending was up 11 percent ($47.8 billion).

Another way to put this, assuming we want to adopt the context the MPAA has tried to paint of an industry in peril, is that the MPAA is reporting that the internet saved Hollywood. Going further during a press call, Rivkin excitedly stated that this rising trend in home-viewing isn't showing any sign of stopping, either. Of particular importance are the revenue trends in digital streaming, a technology that, again, MPAA members have tried to handcuff in every way they can. Enormous licensing sums, restricting access to catalogs, and confusingly granting and pulling access to certain films and shows has been par for the course. Despite all of that, the demand from the public is clear: more streaming, more access, more movies.

Even those representing movie theaters, where domestic revenues continued to decline, are starting to get how important the internet is to the movie-making ecosystem.

"You might find oxymoronic for someone who represents theater owners to champion the home entertainment part of the report," said National Association of Theatre Owners president John Fithian, who also participated in the press call. "Those same people who have the most technologies are also the most frequent moviegoers. We want our distribution and production partners to make more money in the home because they can make more and bigger movies for us."

If everyone is on board with this as they're making out to be, strategies should shift right now to those that are more internet and consumer friendly. Reductions in release windows, expansion of catalogs from the studios, and an eye on pricing licensing to maximize adoption among consumers. These are the things Hollywood should be doing and they are the polar opposite of what it's done for years.

Perhaps this report is the first step in the entertainment industry finally realizing that the internet is not its enemy, but might actually be its salvation. If not, the MPAA's own numbers show that it will be biting the hand that feeds it.

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Filed Under: charles rivkin, movies
Companies: mpaa, netflix

61 Comments

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Ninja (profile), 11 Apr 2018 @ 11:43am

So they arrived at the conclusion that digital sales are good for them at least a decade late. And our "you wouldn't download a car" jokes are about to get pretty real with 3D printing and IP.

I tell you, fascinating.
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Pixelation, 11 Apr 2018 @ 12:14pm

Remember, this is the entertainment industry. They have zero interest in reality. Better to make up a big story and be dramatic. It's their job.
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Anonymous Coward, 11 Apr 2018 @ 12:16pm

But, thanks to digital — up a staggering 161 percent from five years ago — total home entertainment spending was up 11 percent ($47.8 billion).

But, once that figure makes it out the other side of the MPAA Accounting Machine, the industry as a whole will have lost eleventy billion dollars, and piracy will still somehow be to blame.
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VCR, 11 Apr 2018 @ 12:19pm

dangerous curves across the dirty sheets
Boston strangler anyone? Anyone?
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Coises (profile), 11 Apr 2018 @ 12:31pm

So the lesson is...

Enormous licensing sums, restricting access to catalogs, and confusingly granting and pulling access to certain films and shows has been par for the course. Despite all of that, the demand from the public is clear: more streaming, more access, more movies.

That is, we’ve demonstrated that they can treat us like shit... we’ll still give them money.

Why should they change?
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Anonymous Coward, 11 Apr 2018 @ 12:43pm

what crap! just ask the MPAA! they'll tell you the truth! (once they have complete control of the Internet and who can do what, where, when, how and with what! you just wait!!)
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Anonymous Coward, 11 Apr 2018 @ 12:44pm

It's not about the loss
it's about the "control" for "moar prahfeets!"
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Anonymous Coward, 11 Apr 2018 @ 12:45pm

Re:
They've been doing digital sales since the 1990s, and video-on-demand since shortly after that bandwidth became widely available. They still won't sell you anything without physical media AFAIK.
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Anonymous Coward, 11 Apr 2018 @ 12:47pm

Re: It's not about the loss
These numbers are revenue. Movies never make a profit.
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Anonymous Coward, 11 Apr 2018 @ 12:54pm

Re: Re: It's not about the loss
Tru dat... all that creative accounting... how do they stay in business?

I wonder if all the people pining for the Sprint & T-Mobil merger because Sprint's numbers look bad in the other article can smell a little irony here...
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Anonymous Coward, 11 Apr 2018 @ 12:58pm

Re:
now if only certain parts of the industry were themselves fiction we've be sitting pretty.
[ link to this | view in thread ]
Roger Strong (profile), 11 Apr 2018 @ 1:09pm

Re:
Whoa. Based on that description, I hope it's not too late to keep the entertainment industry out of federal politics.
[ link to this | view in thread ]
TheResidentSkeptic (profile), 11 Apr 2018 @ 1:18pm

The most likely outcome
... will be that Charles Rivkin will be fired.
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Anonymous Coward, 11 Apr 2018 @ 2:07pm

That's Great But...
Combining all those companies, $88.1 billion in one year (gross) is probably a net loss. We can pretend they're making progress but corporate bigwigs people just see losses.
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Anonymous Coward, 11 Apr 2018 @ 2:33pm

Re: That's Great But...
The bigwigs see profit, if they look before the accountants get to it, but they'll never admit it to the actors or tax authorities. You may have heard of "starving actors", but "starving studio execs?"
[ link to this | view in thread ]
Trails (profile), 11 Apr 2018 @ 3:07pm

Re:
Makes me think of this: https://www.youtube.com/watch?v=qPEeaxI0OPU
[ link to this | view in thread ]
bshock, 11 Apr 2018 @ 3:09pm

Movies have never been the real victim
MPAA: That damned golden goose Internet just won't die, no matter how hard we try to kill it.
[ link to this | view in thread ]
That Anonymous Coward (profile), 11 Apr 2018 @ 6:12pm

OH MY GAWD!!!!!!!!!!
THE BOSTON STRANGLER HANDED THEM TONS OF CASH & NOT CORPSES AS PROMISED!!!!!!!

Perhaps they should fire all the chicken little's who claim the revenues are falling & step the fsck out of the way of technology...

The few technologies that manage to overcome the industry make the industry more money... imagine how much more you'd have made not wasting cash trying to stop the future.
[ link to this | view in thread ]
This comment has been flagged by the community. Click here to show it

Anonymous Coward, 11 Apr 2018 @ 8:22pm

Oooh, LOOK! An 11 year-old "account" popped up!
And less than a year since last comment!

Coises: 69 total, 6 per year from 16 May 2007. https://www.techdirt.com/user/coises

Like other zombies, blandly affirming of the site, indeed barely noticeable.

This one points up that storing user name / password on a computer for 11 years isn't likely. Almost no one keeps same system for that long, likely be at least TWO transfers! So these persons value the site highly and keep track, YET rarely use? Doesn't. Add. Up.

But okay, MAYBE there's a type peculiar to Techdirt: not very interested and not very interesting, only notice the site at rare intervals and they'll grrr and stuff, get all aggression out of system for months, up to years...

Nope, I can't make this one come out anywhere near normal, either! You have a try.
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Anonymous Coward, 11 Apr 2018 @ 8:50pm

No, MPAA PLUS COPYRIGHT PROTECTING ITS PRODUCTS!
Classic Techdirt: leave out key, central, indeed ONLY relevant point in order to assert that piracy is/was/never will be a problem; if those dinosaurs would just give away their product it wouldn't be stolen, and they'd be rich beyond even their greed.

Techdirt used to claim the "dinosaur industry" was going to die soon. And indeed it would have except for the decades of protecting the content it pays to make through steady efforts to fight piracy.

Techdirt is leaving out the evidence which is on display almost every day now at https://torrentfreak.com, where sites are being blocked, streaming operators are going to JAIL, gadgets and software are being injuncted.

Pirates have lost all the legal battles. That's why MPAA is doing well! At last beginning to get rightful income from products, instead of Kim Dotcom and other thieves gaining money by using MPAA's valuable products to draw advertising, indirect infringement.
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Anonymous Coward, 11 Apr 2018 @ 8:55pm

Re:
You can't make any appearance that would ever be accepted as normal, blue boy.

That's what happens when you hate it when due process is enforced.

DMCAed.
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Anonymous Coward, 11 Apr 2018 @ 9:31pm

has technology caused the death of public domain?
Another effect of the internet (and to a lesser degree the VCR and TV) is that Hollywood studios never allow their films' copyrights to expire anymore, as was once common practice for many low-budget films that failed at the cinema, especially in the pre-television era.
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Anonymous Coward, 12 Apr 2018 @ 12:53am

Re:
Gobble that MPAA-flavored corporate cock, blue! Who needs oxygen?
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Lawrence D’Oliveiro, 12 Apr 2018 @ 1:18am

Re: They've been doing digital sales since the 1990s
DVDs are “digital”, aren’t they?
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PaulT (profile), 12 Apr 2018 @ 2:31am

Re:
"So they arrived at the conclusion that digital sales are good for them at least a decade late."

This is an industry that fought tooth and nail to prevent the home video era.... and then massively profited from it when they realised it was a vibrant secondary market rather than a replacement for theatrical sales.

Not too bright, apparently.
[ link to this | view in thread ]
Anonymous Coward, 12 Apr 2018 @ 2:53am

Re: Oooh, LOOK! An 11 year-old "account" popped up!
oh, look, an anonymous coward
[ link to this | view in thread ]
Jinxed (profile), 12 Apr 2018 @ 3:43am

Wasn't John Fithian the same person who said movie theaters wouldn't host Netflix content because it's not qualified as a movie? Something like that.

This report from the MPAA should surprise no one, as it's the status quo from the industry:
See new technology - sue it out of existence
When the lawsuit fails - pass laws to limit its use
When the laws fail - claim innovation

How this organization, along with its sister RIAA, remain relevant fails common sense.
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Wendy Cockcroft, 12 Apr 2018 @ 6:04am

Re: No, MPAA PLUS COPYRIGHT PROTECTING ITS PRODUCTS!
Voted funny.

sites are being blocked - but mirror sites arise
streaming operators are going to JAIL - yet streaming sites abound
gadgets and software are being injuncted - yet they still exist

We have emphatically NOT lost all the legal battles. The MPAA is doing well despite all the whining. It was doing well when piracy began and is doing even better now despite the rampant piracy because pirates often, you know, PAY for things.

As for rightful income; tell that to these guys:

https://www.cinemablend.com/new/How-Star-Wars-Producers-Screwed-Alec-Guinness-Out-Millions-6748 3.html

https://uproxx.com/filmdrunk/lucasfilm-still-not-paying-vader-actor/

What about their income?
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Anonymous Coward, 12 Apr 2018 @ 6:06am

ifit's true and the MPAA etc are finally realising that the Internet, home movie downloading and streaming are not just helping it's studios and the revenue streams, it not only needs to back off from the ridiculous and constant bribing of politicians, law enforcement and courts to get the exact opposite of what it is now supposedly admitting but needs to relax when fan fans do things that the studios/industries themselves dont/wont, things like subtitles that are needed so much yet sites are condemned, shut and the runners charged, then fined and if possible imprisoned! ridiculous when you remember that this small addition, for free, helps the industries sell more!!
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Anonymous Coward, 12 Apr 2018 @ 7:53am

Re: Re: They've been doing digital sales since the 1990s
Yes, and there were also VCDs (popular in Asia at the time). Later HD-DVD and Bluray.

One can pay to stream digital files online now, with heavy DRM, but I don't know of any "legitimate" way to buy a digital movie without a disc.
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Anonymous Coward, 13 Apr 2018 @ 5:25am

I still worry about the lack of "physical copies" in the future. With people repurchasing things between licensing agreements or just losing the series/movies altogether when their platform of choice abandons it, the licensing has perhaps become even more important than copyright.

Perhaps in the future, the only guaranteed method of retaining a copy of your media for years to come will be ripping the stream. Then we'll see how the MPAA and others react.
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anon, 13 Apr 2018 @ 9:46am

Re: Re: Re: They've been doing digital sales since the 1990s
do you mean from the major studios? cause gog does, and i would be surprised if there weren't others.

in any event i suspect this is another example of the major studios missing out on a good market.
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Morpheus, 20 Apr 2018 @ 3:56am

It is true that digital world allows us to get much closer with the technology. I frequently purchase movie on premier services. This is really awesome technology.
[ link to this | view in thread ]
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