As far as I know, you're right, on the books it's true that movies never make money (why would you ever want to pay people when you don't have to). And big corporations that buy them sometimes get screwed (Vivendi). But movie studios do make a lot of money for the people running the studios.
Hollywood is notorious for hucksters and con-artists. ruthlessly fleecing everyone. At the same time, sometimes making great art (here's looking at you Robert Evans).
With the revolution in technology both for distribution and production, maybe that can change and more filmmakers can make a reasonable living making better films. In theory, making a movie should be like being in a band. The monetary and physical cost is now roughly comparable for a small movie and an album. That still means however, that while you can do it for free on your laptop, to pay professionals it rapidly adds up.
So I find it very disappointing (though I'm sure you find it a whole lot more disappointing) that Sita has only seen you get maybe 100k back. I'm very interested to read your new report. Do you think you've reached an upper limit? Why do you think you've not gone higher? Do you have further to go?
Absolutely, I agree, it is likely to damage their business. I think they were doing it too early. As with their streaming deals, they have tried to push forward and been slapped back by the big studios for being uppity. The studios still have all the power as you say.
However, I think that the movie studios, like the music industry, show no evidence that they are going to shift their business model quickly enough to prevent a collapse similar to the recording industry.
I think that soon enough they will be weakened enough so that they will want to give the latest Twilight flick to Netflix regardless of whether Netflix is producing it's own content or not. It's like Warner Brothers saying they're not going to do any more free music streaming.
Then I think producers would start complaining. Or going directly to Netflix (or someone else who uses all distribution channels they can) to make movies.
Or Netflix may have been scared off permanantly. But if I were in charge of Netflix, I'd be too tempted not to try again.
No. I'm pretty sure it was as indie as you get. He probably put the money up himself. And then he was lucky enough to sell it to a distributor. At that level, he probably didn't sell it for very much. A studio almost certainly didn't give him money to make it or tell him what to do. That's all still super indie.
I think it's great that he was able to do it. In essence I just think his film is still playing by the old rules of the game. That's the bit of "is there more" i was responding to.
But there's no doubt that Hulu is selling ad space on that movie and making money from it.
Basically, while this is a great indie success for that guy, I suspect it's not that radically different from a straight to video release that's been done since VHS started. Strictly Sexual would have been bought at a film market at some point by the distributor and I imagine they got it on Hulu through one of their block booking (you only get Transformers if you take three films we think are rubbish) style deals.
The surprise is that the film resonates and the executives didn't see that it would (actually, that might not be much of a surprise knowing movie execs).
What I'd be interested to know is... how much of that $1m did he see? Enough to make another movie? Or even live on a reasonable salary? I suspect not. I suspect he got a small fee upfront that might have covered his production costs and nothing more. I found it notable that he didn't know what Hulu was. If it was my film, and I had a monetary investment in the picture, I'd want to know where it was playing.
So far as I can guess (and yes, this is all an educated guess) we're still looking at the classic music industry/movie industry style distributors taking all the money.
It is more an indication of the fact that sub $1m movies have a lot more places to get seen. Even using old distribution companies. Even though those companies may or may not know how to fully exploit new channels.
I'd argue that Netflix is much more radical in this space. They have been releasing movies such as The Puffy Chair (http://www.imdb.com/title/tt0436689/) for a few years, sort of as a hobby. If Netflix gets into the habit of buying these sub $1m movies they are all of a sudden a fully fledged movie studio. They have all the distribution in place without the momentum of the old system because their built digitally from the start.
Then... who needs other people's content? Why buy from a distributor when you can make and distribute for less. Production costs of these type of no stars, no fx films are well within the price that I imagine Netflix can afford. And they fit the long tail that is the speciality area for Netflix pointing customers to. And they have all the consumer data they need to tailor movies to exactly the audience. And everything is focused on line.
They might not want to go into production because of the inherent risk, or they might not need to because lots of no-budget indie filmmakers would be lining up to get their film distributed by Netflix - some of which will be very good. But that's another story.
My guess is that Netflix doesn't want to anger the studios. Yet. Though I do think Netflix is poised to make a killing in sub $5m indie films when they feel strong enough to take the majors on.
So... maybe I have some special Gmail account, but when Buzz appeared in my Gmail it ASKED me.
If I took 10 seconds (which I would hope a journalist keeping secret contacts would do), I could remove everybody.
If I took another 10, I could remove it from Gmail altogether, by clicking down the bottom of the page.
End of problem. Buzz killed.
If you value your privacy so much, is spending 10 seconds saying "no thanks" that hard?
Not only that, but I had the opposite problem. I found their auto-add function didn't work. It failed to suggest a friend I have been chatting to constantly on Gchat and Gmail for the past year. Probably because I only reconnected with him a year ago, but I've had my Gmail account for six. So, if you have recent heavy contact with someone, I don't think it picks that up because I suspect it's aggregated over the time the whole account has been open.
The whole thing is just a simple way to try and get something in your Buzz stream quickly. I'm fine with that it saves me time going to a 10 or 15 profiles and following them.
It's no different from LinkedIn or Facebook or any other networking service that says: give me your email address and we'll check to see who else is on here. The only difference is that Gmail doesn't need to login to another email service.
Still, for a forward leaning tech blog, I'm amazed at the reactionary comments that sound like the cool kids bashing the new kid in high school, just because he's new. And others, even more disturbingly along the lines of the grandpa "I hate new technology" response.
What happend to trying new things? Working with new models and seeing if they work over time?
Google Buzz has been online about 24 hours and we already know it's a model and tool that is a big FAIL?
Let's get some perspective here.
Carlson wants hits on his blog. And I'm sure he got them. I saw that story posted everywhere.
It's classic tabloid sensationalism. A story titled: READ INSTRUCTIONS BEFORE USE or something similar just ain't going to get the hits that WARNING:HUGE PRIVACY FLAW will.
And who says good old fashioned journalism is dead?
As much as I agree with almost everything written by Mike on Techdirt about the movie business, it does always make me cringe slightly when you keep repeating the statistic that 2009 was biggest box office year ever. It was, but only under Hollywood PR rules.
Sure... hit them with their own fluff, the MPAA can't have it both ways and you are in the right, but do take a look at the fundamentals.
Execs in the business should just point out that if you take into account ticket price inflation and monetary inflation the movie industry box office business model did better in 2002 by quite a long way. Here are admissions numbers from NATO (http://www.natoonline.org/statisticsadmissions.htm).
With ticket price inflation and monetary inflation taken into account, the movie industry's best year (maybe since the 1960s or 1970s or earlier) was 2002.
And then look at Avatar's this week. Don't misunderstand me here, they are pretty great, particularly in retention and midweek viewings. But they are less great when you figure in the huge ticket price hike for 3D (10%+ varying by theater) compared to other films currently in the top ten box office numbers (and older box office numbers are even more misleading). They are making more money, yes... but theatrical attendance may be decaying and no-one really knows why.
Historically, according to the MPAA figures there was something like 4.1 billion tickets sold in 1946 and they continued to fall through to the mid 1970s where you have about 1 billion admissions, the then started to rise again in the 1990s to peak at 1.6 billion in 2002.
A quick check on Box Office Junkie (http://www.theboxofficejunkie.com/ticket-prices.html - I haven't checked their calculations myself) that monetary inflation rate for 1924-2009 was 1,120% whereas ticket price inflation 1924-2009 was 2,872%. Quite a bit more. And a lot of that is in the past 30 years too - ticket prices have more than doubled since 1989 ($3.97 average 1989 to $7.18 2009).
So... all this means is that box office is actually a bit of a distraction when it comes to real movie profitability - at about 20% of all profits on a film. This is where the movie industry is in a slightly better place than the music industry. The largest profit center for a movie from what is described as anciliary markets - right now that is mainly DVD (and TV). That's why they're scared.
But George Lucas isn't the richest man ($4 billion) in the business because of DVD's -- it's because of plastic toys and (special effects) technology. Two themes that frequently recur here...
That's right. He sold looooooooooooots of T-Shirts.
Why is there about 8 different versions of the same Star Wars movies out to buy? Why all the toys, tshirts, videogames? Well, it may be cynical and I now never want to see anything Star Wars again, but it certainly makes some kind of business sense.
And Disney. I'd love to look at the real accounting numbers for Disney by movie property, who must make a fortune on movie related toys and stuff. If you look at the whole film ecosystem and include toys and games, the most profitable movies of all time might turn out to be almost entirely Disney movies (with I suspect, Star Wars still sitting up top...)
Now my own analysis is that in truth, most people just don't want to go to the theater; they'd rather stay at home. I love it and I go more than twice a week sometimes. But even I think the theatrical experience is too expensive for what you get. It's simply too poor an experience to compete with delivery food, a big sofa, good sound and a big TV screen. That's why the industry is so scared. As much as they say the theatrical experience will never die, in their heart of hearts, they don't believe it.
Actually, I don't think it will, but I suspect it eventually might go the way of opera or legit theater. Extremely expensive tickets in plusher auditoriums and more companies like IFC Films who own their own movies, TV channel and theater, the old Waverly in NYC. Studios need proper vertical integration as they used to in the old days of the studio system otherwise I can't see how they can control Loews or AMC or whomever from selling inedible sweets and popcorn and damaging their business.
That said, they have vertical integration on DVD distribution and they have been pretty slow with innovating there because of the massive profits. (Just compare to Criterion Collection who sell movies that are sometimes out of copyright...)
Ticket prices have gone up a lot since 89 - as has admission, which suggests that people are willing to pay for a better experience. I don't think movie theaters need to compete on price - especially if you figure in that people are spending money to get to the theater (and maybe hire a babysitter). A little extra for better service would seem to be a good idea (and there are examples of successful theater chains that do this).
None of this grand sweep of the business should be affected by "piracy" it hasn't before, so long as they keep innovating (and if you really want a laugh, read up on why the movie business moved to Hollywood in the first place - to escape Thomas Edison's New York based patents). Movies didn't start out at 2 hours in a big theater, they started on small personal players for a nickel. It was the showmen the invented the big screen and the longer story by fighting against restrictive east coast patent laws. This is because it was a better way to get customers. So long as the business keeps giving the audience new and better ways to experience the core product: the storytelling experience.
Which is why it wasn't called "The DVD Factory," it was called: "The Dream Factory".
Techdirt has not posted any stories submitted by mdavidthomson.
Re: Re: a little perspective
Hollywood is notorious for hucksters and con-artists. ruthlessly fleecing everyone. At the same time, sometimes making great art (here's looking at you Robert Evans).
With the revolution in technology both for distribution and production, maybe that can change and more filmmakers can make a reasonable living making better films. In theory, making a movie should be like being in a band. The monetary and physical cost is now roughly comparable for a small movie and an album. That still means however, that while you can do it for free on your laptop, to pay professionals it rapidly adds up.
So I find it very disappointing (though I'm sure you find it a whole lot more disappointing) that Sita has only seen you get maybe 100k back. I'm very interested to read your new report. Do you think you've reached an upper limit? Why do you think you've not gone higher? Do you have further to go?
Re: Re: Is there more?
However, I think that the movie studios, like the music industry, show no evidence that they are going to shift their business model quickly enough to prevent a collapse similar to the recording industry.
I think that soon enough they will be weakened enough so that they will want to give the latest Twilight flick to Netflix regardless of whether Netflix is producing it's own content or not. It's like Warner Brothers saying they're not going to do any more free music streaming.
Then I think producers would start complaining. Or going directly to Netflix (or someone else who uses all distribution channels they can) to make movies.
Or Netflix may have been scared off permanantly. But if I were in charge of Netflix, I'd be too tempted not to try again.
Re: Re: Is there more?
I think it's great that he was able to do it. In essence I just think his film is still playing by the old rules of the game. That's the bit of "is there more" i was responding to.
But there's no doubt that Hulu is selling ad space on that movie and making money from it.
Is there more?
A quick IMDb, however, reveals that Arts Alliance is the US distrib. They're a big company here is their big international parent:
http://www.artsalliance.com/PortfolioCurrent.aspx#artsalliancemedia
Basically, while this is a great indie success for that guy, I suspect it's not that radically different from a straight to video release that's been done since VHS started. Strictly Sexual would have been bought at a film market at some point by the distributor and I imagine they got it on Hulu through one of their block booking (you only get Transformers if you take three films we think are rubbish) style deals.
The surprise is that the film resonates and the executives didn't see that it would (actually, that might not be much of a surprise knowing movie execs).
What I'd be interested to know is... how much of that $1m did he see? Enough to make another movie? Or even live on a reasonable salary? I suspect not. I suspect he got a small fee upfront that might have covered his production costs and nothing more. I found it notable that he didn't know what Hulu was. If it was my film, and I had a monetary investment in the picture, I'd want to know where it was playing.
So far as I can guess (and yes, this is all an educated guess) we're still looking at the classic music industry/movie industry style distributors taking all the money.
It is more an indication of the fact that sub $1m movies have a lot more places to get seen. Even using old distribution companies. Even though those companies may or may not know how to fully exploit new channels.
I'd argue that Netflix is much more radical in this space. They have been releasing movies such as The Puffy Chair (http://www.imdb.com/title/tt0436689/) for a few years, sort of as a hobby. If Netflix gets into the habit of buying these sub $1m movies they are all of a sudden a fully fledged movie studio. They have all the distribution in place without the momentum of the old system because their built digitally from the start.
Then... who needs other people's content? Why buy from a distributor when you can make and distribute for less. Production costs of these type of no stars, no fx films are well within the price that I imagine Netflix can afford. And they fit the long tail that is the speciality area for Netflix pointing customers to. And they have all the consumer data they need to tailor movies to exactly the audience. And everything is focused on line.
They might not want to go into production because of the inherent risk, or they might not need to because lots of no-budget indie filmmakers would be lining up to get their film distributed by Netflix - some of which will be very good. But that's another story.
My guess is that Netflix doesn't want to anger the studios. Yet. Though I do think Netflix is poised to make a killing in sub $5m indie films when they feel strong enough to take the majors on.
How about reading the instructions.
If I took 10 seconds (which I would hope a journalist keeping secret contacts would do), I could remove everybody.
If I took another 10, I could remove it from Gmail altogether, by clicking down the bottom of the page.
End of problem. Buzz killed.
If you value your privacy so much, is spending 10 seconds saying "no thanks" that hard?
Not only that, but I had the opposite problem. I found their auto-add function didn't work. It failed to suggest a friend I have been chatting to constantly on Gchat and Gmail for the past year. Probably because I only reconnected with him a year ago, but I've had my Gmail account for six. So, if you have recent heavy contact with someone, I don't think it picks that up because I suspect it's aggregated over the time the whole account has been open.
The whole thing is just a simple way to try and get something in your Buzz stream quickly. I'm fine with that it saves me time going to a 10 or 15 profiles and following them.
It's no different from LinkedIn or Facebook or any other networking service that says: give me your email address and we'll check to see who else is on here. The only difference is that Gmail doesn't need to login to another email service.
Still, for a forward leaning tech blog, I'm amazed at the reactionary comments that sound like the cool kids bashing the new kid in high school, just because he's new. And others, even more disturbingly along the lines of the grandpa "I hate new technology" response.
What happend to trying new things? Working with new models and seeing if they work over time?
Google Buzz has been online about 24 hours and we already know it's a model and tool that is a big FAIL?
Let's get some perspective here.
Carlson wants hits on his blog. And I'm sure he got them. I saw that story posted everywhere.
It's classic tabloid sensationalism. A story titled: READ INSTRUCTIONS BEFORE USE or something similar just ain't going to get the hits that WARNING:HUGE PRIVACY FLAW will.
And who says good old fashioned journalism is dead?
2009 Box Office Records aren't so simple
Sure... hit them with their own fluff, the MPAA can't have it both ways and you are in the right, but do take a look at the fundamentals.
Execs in the business should just point out that if you take into account ticket price inflation and monetary inflation the movie industry box office business model did better in 2002 by quite a long way. Here are admissions numbers from NATO (http://www.natoonline.org/statisticsadmissions.htm).
2008 1.363
2007 1.400
2006 1.395
2005 1.376
2004 1.484
2003 1.521
2002 1.599
2001 1.438
2000 1.383
1999 1.440
1998 1.438
1997 1.354
1996 1.319
1995 1.211
1994 1.240
1993 1.182
1992 1.099
1991 1.14
1990 1.19
1989 1.26
1988 1.08
1987 1.09
With ticket price inflation and monetary inflation taken into account, the movie industry's best year (maybe since the 1960s or 1970s or earlier) was 2002.
And then look at Avatar's this week. Don't misunderstand me here, they are pretty great, particularly in retention and midweek viewings. But they are less great when you figure in the huge ticket price hike for 3D (10%+ varying by theater) compared to other films currently in the top ten box office numbers (and older box office numbers are even more misleading). They are making more money, yes... but theatrical attendance may be decaying and no-one really knows why.
Historically, according to the MPAA figures there was something like 4.1 billion tickets sold in 1946 and they continued to fall through to the mid 1970s where you have about 1 billion admissions, the then started to rise again in the 1990s to peak at 1.6 billion in 2002.
A quick check on Box Office Junkie (http://www.theboxofficejunkie.com/ticket-prices.html - I haven't checked their calculations myself) that monetary inflation rate for 1924-2009 was 1,120% whereas ticket price inflation 1924-2009 was 2,872%. Quite a bit more. And a lot of that is in the past 30 years too - ticket prices have more than doubled since 1989 ($3.97 average 1989 to $7.18 2009).
So... all this means is that box office is actually a bit of a distraction when it comes to real movie profitability - at about 20% of all profits on a film. This is where the movie industry is in a slightly better place than the music industry. The largest profit center for a movie from what is described as anciliary markets - right now that is mainly DVD (and TV). That's why they're scared.
But George Lucas isn't the richest man ($4 billion) in the business because of DVD's -- it's because of plastic toys and (special effects) technology. Two themes that frequently recur here...
That's right. He sold looooooooooooots of T-Shirts.
Why is there about 8 different versions of the same Star Wars movies out to buy? Why all the toys, tshirts, videogames? Well, it may be cynical and I now never want to see anything Star Wars again, but it certainly makes some kind of business sense.
And Disney. I'd love to look at the real accounting numbers for Disney by movie property, who must make a fortune on movie related toys and stuff. If you look at the whole film ecosystem and include toys and games, the most profitable movies of all time might turn out to be almost entirely Disney movies (with I suspect, Star Wars still sitting up top...)
Now my own analysis is that in truth, most people just don't want to go to the theater; they'd rather stay at home. I love it and I go more than twice a week sometimes. But even I think the theatrical experience is too expensive for what you get. It's simply too poor an experience to compete with delivery food, a big sofa, good sound and a big TV screen. That's why the industry is so scared. As much as they say the theatrical experience will never die, in their heart of hearts, they don't believe it.
Actually, I don't think it will, but I suspect it eventually might go the way of opera or legit theater. Extremely expensive tickets in plusher auditoriums and more companies like IFC Films who own their own movies, TV channel and theater, the old Waverly in NYC. Studios need proper vertical integration as they used to in the old days of the studio system otherwise I can't see how they can control Loews or AMC or whomever from selling inedible sweets and popcorn and damaging their business.
That said, they have vertical integration on DVD distribution and they have been pretty slow with innovating there because of the massive profits. (Just compare to Criterion Collection who sell movies that are sometimes out of copyright...)
Ticket prices have gone up a lot since 89 - as has admission, which suggests that people are willing to pay for a better experience. I don't think movie theaters need to compete on price - especially if you figure in that people are spending money to get to the theater (and maybe hire a babysitter). A little extra for better service would seem to be a good idea (and there are examples of successful theater chains that do this).
None of this grand sweep of the business should be affected by "piracy" it hasn't before, so long as they keep innovating (and if you really want a laugh, read up on why the movie business moved to Hollywood in the first place - to escape Thomas Edison's New York based patents). Movies didn't start out at 2 hours in a big theater, they started on small personal players for a nickel. It was the showmen the invented the big screen and the longer story by fighting against restrictive east coast patent laws. This is because it was a better way to get customers. So long as the business keeps giving the audience new and better ways to experience the core product: the storytelling experience.
Which is why it wasn't called "The DVD Factory," it was called: "The Dream Factory".
Techdirt has not posted any stories submitted by mdavidthomson.
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