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

from the told-you dept

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.

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

Chris Dodd 'Stepping Down' From MPAA

from the good-riddance dept

It appears that Chris Dodd's reign atop the MPAA is coming to an end. As you may recall, he took the job in 2011 to become the head of the MPAA -- directly contrasting a statement he'd made just months earlier that he'd never become a lobbyist. Dodd's first move was to preside over the MPAA's first legislative Titanic. After years of easily passing every copyright law it wanted, Dodd helped turn a slam dunk, easy-to-pass SOPA/PIPA into a huge disaster that has consistently scared Congress away from making any substantial copyright law changes. And, yes, it was Dodd's failed leadership that was a big part of the problem.

Other "highlights" from the Chris Dodd era include near complete silence after the Sony hack, a leaked plan on how the MPAA would help pay for lawyers to do the legwork for elected officials to attack Google, and even leading the movie studios to begin to question why they send many millions of dollars to the MPAA each year for very little return.

With that as backdrop, it's been announced that Dodd is stepping down from the MPAA and will be replaced by Charles Rivkin, who has worked in both government and in the entertainment industry. Dodd's contract ran through 2018, and news reports say he'll "transition" out of his role between now and September of this year. Hopefully Rivkin will be more forward-looking, and will recognize that (1) the public and (2) the internet are not enemies of the movie industry. That would go a long way towards improving the MPAA's approach to things, but we'll see.

Filed Under: charles rivkin, chris dodd, copyright, lobbying
Companies: mpaa