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Record Box Office Indicates MPAA 'Piracy Problem' Hot Air

Zonk posted more than 6 years ago | from the tell-me-another dept.

Movies 244

Kinescope writes "The motion picture industry has said that its profits are at risk due to piracy, but a record-setting 2007 box office has some wondering if the industry is crying 'wolf.' Last year, the US box office totaled $9.63 billion, a 5.4% increase over 2006. 'Piracy is so bad, according to the MPAA, that we need special legislation to target the dastardly college pirates who are destroying the business. It's so bad that Weekly Reader subscribers will learn about the $7 billion a year "lost" to Internet piracy. It's so bad that the MPAA wants ISPs to ignore years of common carrier law and the promises of "safe harbor" and start filtering their traffic, looking for copyright violations. The real world isn't quite this simple, of course. It turns out that the MPAA's college numbers were off by a factor of three, a revelation that came after years of hiding the study's methodology but continuing to lobby Congress with its numbers.'"

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244 comments

Old News, but ... (5, Insightful)

PC and Sony Fanboy (1248258) | more than 6 years ago | (#22656990)

When the governator (Arnold!) made a visit to canada to discuss this 'problem', there was new legislation that was made law within two months. That shows you the power of the governator (or perhaps, the power of american influence). The problem was that 'Canada was responsible for over half the pirated movies in north america'. The legislation enacted was almost EXACTLY what was requested by Gov. Schwarzenegger... and STILL they cry 'Blame Canada!'

The only problem with it all ... is that it ISN'T actually a problem!

Re:Old News, but ... (5, Funny)

Digi-John (692918) | more than 6 years ago | (#22657112)

The legislation enacted was almost EXACTLY what was requested by Gov. Schwarzenegger... and STILL they cry 'Blame Canada!'

It's the Canadians' fault, with their beady little eyes and flapping heads so full of lies.

Re:Old News, but ... (3, Insightful)

billcopc (196330) | more than 6 years ago | (#22658354)

That shows you the power of the governator (or perhaps, the power of american influence)

Nah, it just shows how big of a sellout Stephen Harper really is. As bizarre as it may sound, I'd rather have the old farts and their sponsorship scams than this Conservative pushover. I value freedom far far above tax cuts.

summary wrong (5, Informative)

moderatorrater (1095745) | more than 6 years ago | (#22656992)

Just a nitpick, but the summary says $9.63 million, when it is in fact billion

Also, the box office figures don't correlate directly to lost profits, because the DVD industry is so big now, and I think that's where they're losing most of their money. Getting a copy that was taken by a video camera sucks compared to a movie; however, once a DVD comes out, you can download the same quality for free.

Re:summary wrong (5, Informative)

iluvcapra (782887) | more than 6 years ago | (#22657072)

Indeed. DVD sales in 2007 were down [economist.com] from 2006, and DVDs are where all the margin on motion pictures is. The theatrical distribution is really sortof a loss leader to promote the DVD and follow-on media, like DVD, television and video games (an industry which outstrips the film industry in revenues, I might add).

Re:summary wrong (5, Insightful)

Sean Riordan (611520) | more than 6 years ago | (#22657176)

But how much of that decline is due to consumers sitting out the format fiasco, partaking of On Demand offerings, or doing the Netflix thing?

Re:summary wrong (5, Insightful)

Wandering Wombat (531833) | more than 6 years ago | (#22657346)

Or, you know... only watching the good movies?

Re:summary wrong (-1, Flamebait)

Anonymous Coward | more than 6 years ago | (#22657922)

There hasn't been a good film in almost 10 years. Nothing creative or original. Everything they produce now seems to be a rehash of an older film, a book or a video game.

Re:summary wrong (1)

dissy (172727) | more than 6 years ago | (#22658546)

Or, you know... only watching the good movies?
I feel the need to inform slashdot that an entire 97%(*) of those figures come from people only watching the good movies.

* Of course, I got that number from the same reports the MPAA used.

Re:summary wrong (5, Funny)

sconeu (64226) | more than 6 years ago | (#22657626)

<MPAA>
How DARE you imply that anything other than those Evil Content Pirates(tm) is responsible for any downturn (or not a big enough increase) in our profits!!!!
</MPAA>

Re:summary wrong (2, Interesting)

Tsiangkun (746511) | more than 6 years ago | (#22657488)

Yeah, I quit buying DVDs and subscribed to a delivery service. The MPAA wants me to believe that legally I am not allowed to copy the movies for viewing on my prefered device at my prefered time and location, regardless of if I buy the DVD or not.

Since buying the movie on DVD gets me no additional rights, I see no point in buying. My movie collection can grow quicker by having new movies delivered to my house on a regular basis.

Re:summary wrong (2, Interesting)

khallow (566160) | more than 6 years ago | (#22657506)

Indeed. DVD sales in 2007 were down from 2006, and DVDs are where all the margin on motion pictures is. The theatrical distribution is really sortof a loss leader to promote the DVD and follow-on media, like DVD, television and video games (an industry which outstrips the film industry in revenues, I might add).

That depends on the film. Disney in particular seems to have very strong follow-on media sales. But I'd say that the characterization isn't true in general. There are films that do as you say, there are direct to video films that make no income at all from ticket sales, there are films that are make most of their income from ticket sales, and there are films that seem to be loss leaders in all of their markets and only generate bad publicity for the studio. :-S

But however you view it, there is big money in DVDs and other follow-on media. The movie industry does have considerable incentive to try to get people to pay for the product.

Re:summary wrong (2, Interesting)

iluvcapra (782887) | more than 6 years ago | (#22657678)

there are films that are make most of their income from ticket sales, and there are films that seem to be loss leaders in all of their markets and only generate bad publicity for the studio. :-S

Even really big, successful, good-press films lose money; remember that stars and directors and producers cut most of the gross box-office receipts up front, in such a way that films like Forrest Gump and Hook STILL haven't turned a profit, despite grossing several multiples of their budget on screens, because such a huge percentage of the gross is redirected to the above-the-line talent. The guild deals on royalties and residuals for writers and actors also are at their most dis-advantageous for the studio for theatrical; the DVD is much better for the studios and distributors in terms of their deal.

I challenge you seriously, to find any film this side ofReservoir Dogs that made more profit in theaters than on the shelf at Amazon and Wal*mart.

Re:summary wrong (1, Insightful)

McGiraf (196030) | more than 6 years ago | (#22657976)

1-m ake films costing a bit less and stop paying that much for "above the line talent"
2- ???
3- profits!

Re:summary wrong (1)

iluvcapra (782887) | more than 6 years ago | (#22658084)

m ake films costing a bit less and stop paying that much for "above the line talent"

If you don't pay them, they'll go somewhere else, and people go to movies based on who's in them. Jumper is atrocious, and the critics told everyone so, but put Hayden Christianson and Sam Jackson on the poster, and you'll still open at number 1; it may not turn much of a profit, but now the videogame has a good launch, and Jumper 2 is assured boffo pre-tracking.

Re:summary wrong (1)

prockcore (543967) | more than 6 years ago | (#22658448)

Wait, so which is it? The stars cost more than they bring in, or they don't. If stars aren't bringing in enough customers to compensate for their salaries, then who cares if they go star in a competitors film?

Re:summary wrong (1)

timmarhy (659436) | more than 6 years ago | (#22657994)

theatrical distribution is not a loss leader ok. it's get that nonsense out of the way right now. movies worth their ticket price gross 300 million or more just at the box office, with the MOST expensive movie ever made being spiderman 3 at 500 million to make and raking in just shy of 900 million at the box office alone.

doesn't look like much of a loss to me.

Re:summary wrong (1)

chromatic (9471) | more than 6 years ago | (#22658050)

Your math is too simple. Theaters keep some of that money for themselves.

Re:summary wrong (4, Informative)

goosman (145634) | more than 6 years ago | (#22658178)

Very little. When I worked for a theater chain in the late 80's-early 90's we kept about 30 cents of each ticket, which was $6.25 or $6.75 at the time for an adult ticket. The rest went back to the distributor, who I assume paid the movie makers. We made money by selling 30 cents of popcorn and 10 cents worth of soda for $5.50. The numbers may have changed a little now that tickets are $10, but I'm sure the percentages are similar.

Re:summary wrong (1)

SacredByte (1122105) | more than 6 years ago | (#22658320)

Yes, but they would probably see more money from me if they didn't try to gouge me in every way possible.

FFS, it costs almost (sometimes more than) 15 USD for ticket + beverage -- DVD's usually cost around that, and I can watch them as many times as I like.

Re:summary wrong (5, Insightful)

ma1wrbu5tr (1066262) | more than 6 years ago | (#22658250)

I'll tell you the same thing I told U2s manager. Make more than 1 good movie (or song) per year (or album). Sell some bumper stickers. OR some action figures.
I'd be willing to bet Lucas made more $ from merchandise than from the actual Star Wars movies themselves.
One of the kids I knew growing up had at least $3000 of Star Wars action figures, models, posters, clothes. And that was in the 80's which translates to some ungodly amount now.
Again, this is a business model issue, not a Piracy issue. If studios are losing money, then they need to re-examine how much they pay executives and actors. I mean honestly, there is no actor alive that is worth millions of dollars a picture.
Yeah, I'm kindof a Troll about this. F'ing whiners, the lot of 'em.

Re:summary wrong (5, Insightful)

billcopc (196330) | more than 6 years ago | (#22658396)

Yep I wish someone would explain to me, in plain terms that make business sense, why an actor should be paid 42 bazillion dollars for four half-days of work.

And once that's clarified, we'll talk about sports celebrities.

a. Standing around looking pretty, 10 million
b. Hitting a ball with a stick, 7 million
c. Designing the hardware, software and networks that bring it all to the consumers, 40k/yr

Shit's upside down!

Re:summary wrong (1)

Otter (3800) | more than 6 years ago | (#22658280)

Indeed. DVD sales in 2007 were down from 2006, and DVDs are where all the margin on motion pictures is.

No problem. Tomorrow we'll get the story about how DVD sales are down because of the MAFIAA's bullying of customers, terrible movies no one wants to see and rapidly growing demand for Creative Commons-licensed Ogg Theora videos.

Remarkably, the same conclusion is reached whenever sales go up or go down -- you don't think that when movie revenues were off in 2006 there was a story about how "Gee, maybe we'd better stop stealing movies!"?

Re:summary wrong (0)

Anonymous Coward | more than 6 years ago | (#22658310)

Indeed. DVD sales in 2007 were down from 2006, and DVDs are where all the margin on motion pictures is.
... which can be explained that with HD-DVD vs Blu-Ray battle plus the emergence of online stores selling and renting Hi-Def movies, people might have just taken a wait and see attitude. Why bother buying DVDs when they are about to be replaced with the high definition discs? The longer the battle went, the longer people waited for the outcome and the less total DVDs were purchased in the time frame.

And what kind of loss is it, anyways? (1)

CokeJunky (51666) | more than 6 years ago | (#22657988)

Legally, every bootleg copy or download is made equivalent to that person actually going to pay full price to watch or buy the movie.

In truth, I wonder just what percentage of people who buy bootlegs or download the movie would have been willing to pay instead of simply not watching it. I mean have you seen the tripe coming out of hollywood these days? Granted the whole point of those laws is that those people should not have seen the movie without paying, and so they have taken an undue 'benefit' or 'enrichment' in having seen the movie that way.

I figure in real life, the studios can't really call it a loss when they were never going to get that money in the first place, and meanwhile, they are dropping the spanish inquisition on students, single mothers, etc.

The best solution for them is to make better movies that are actually worth paying to see! I mean it's gotten so bad over the last few years, that I can't even be bothered to download them and waste an or so watching. My wife and I have at least three pairs of free movie tickets 1 of which is over 6 months old, and haven't used them in yet because every time we think about going to catch a movie, there is nothing worth watching on!

also nitpicking (0)

Anonymous Coward | more than 6 years ago | (#22658044)

My question: How is the box office (ie, money brought in) showing improvement only slightly above the inflation level despite the fact that the cost to create a movie has skyrocketed a sign that piracy doesn't affect sales.

Hell, in my area, ticket sales went up 10% (from $9 to $10) so the fact that box office went up 5% while box office takings per ticket went up 10% indicates a loss. Granted, not every theater everywhere raised prices 10% last year, but still.

Summary is off by 3 orders of magnitude (3, Funny)

Sciros (986030) | more than 6 years ago | (#22656994)

$9.63 million, a 5.4% increase over 2006

How about "billion" instead? (It'll probably get corrected.)

Well, either that, or piracy has indeed PWNED the movie industry. Bad. Hah.

Re:Summary is off by 3 orders of magnitude (1)

ANCOVA (1175953) | more than 6 years ago | (#22657762)

Well million is still a quite big number. I mean you could hold the world ransom for... ONE MILLION DOLLARS!

lulz (0)

spleen_blender (949762) | more than 6 years ago | (#22657000)

Does this account for rising gas prices though? I'm sure the exec's Hummer H2s and H3s are sucking down a lot of that seeming extra profit.

Re:lulz (1)

netsavior (627338) | more than 6 years ago | (#22657412)

exec's Hummer H2s and H3s

Not to nitpick, but actual wealthy people don't drive those kinds of cars, the neuvo riche or yuppies or people pretending to be rich do. Execs drive high end mercedes and other subtle cars. An H2 yells "I WANT YOU TO THINK I HAVE MONEY" which is not what a real exec wants.

Re:lulz (0)

Anonymous Coward | more than 6 years ago | (#22658328)

That's how normal execs behave. We're talking about Hollywood here, where flash counts. They're judged by their peers almost entirely by their status symbols. Designer clothes, million dollar+ jewelry, huge mansions, etc.Sure, some of them aren't pretentious, but the vast majority of people in the biz want everyone to know they're in the biz and thus, special.

As I have posted previously.... (4, Insightful)

Creepy Crawler (680178) | more than 6 years ago | (#22657002)

What alternatives do we have?

Our body of law gives rights to the creators and their protected ability of being the one to approve copies. Regardless of whether we agree or now with this, that is our situation.

Now, we take this to the "digital domain". Those older creators want, no.. need these protections as they see in the non-internet world. The only real way to "guarantee" this is by digital restrictions. The best way I think of this is that of a akin to a capability system and the copyright maintainer has an account on your machine.

However, our machines are ours. The geeks amongst us demand that we are able to control our software and hardware. What was unable to do in WinXP, Vista seems to offer the beginning of that capability system with the media companies at the kill switch. And to top it off, Vista has remotely disabling drivers for "holes" that might appear. For those that own a machine, this OS laughs in their face, as if saying "Bring It On!"

And there are many casualties. Those casualties are the Joe and Jane Publics that don't understand this issue close enough, or think that all needs to be done is burn to DVD... just like the iPod to music. When they find out that they are locked with binary garbage that cannot be used for any fair use purpose (backing up owned DVDs is fair usage).

And where are we now? When the users know they are eventually shafted, those that have the know-how will show others where to download the movies and the music they legitimately bought. Once they know they were taken advantage of, any feeling of "theft" (or whatever you call it) will be gone. The media companies had their chance to do their dealings with the public honestly, but have failed.

Just like língchí.. Death by a thousand cuts.

posted on kuro5hin.org

Re:As I have posted previously.... (1)

ScrewMaster (602015) | more than 6 years ago | (#22657538)

The only real way to "guarantee" this is by digital restrictions.

But the law never made, nor was it ever intended, to make such a guarantee. Nor does DRM guarantee it, and in any event they aren't entitled to it. They're only entitled to spend their own time and money defending their rights in court.

That's not enough for them, of course ... now they want the Federal Government and every major ISP to handle that dirty task for them. That's just wrong on so many levels.

Re:As I have posted previously.... (5, Insightful)

dave562 (969951) | more than 6 years ago | (#22657620)

What I foresee eventually happening is that Hollywood and the creative types in the world will come to realize that the public isn't willing and or able to support them. The public will lose interest in providing a star multiple millions of dollars to sit in front of the camera playing make believe. The studios will realize that they can't keep the movie making juggernaut of writers, grips, camera operators, sound techs, costumers, make-up artists, etc. etc. employed playing make believe.

What it really all boils down to is that people pay what they think the production is worth. If they want the experience of the theater they will pay for it at the theater. If they want to watch it at home the majority of them will pay to rent it. I think the logical fallacy taking place is that the studios are losing money because of piracy. I'd bet that over 80% of the people who pirate a movie would simply go without if they suddenly couldn't get a free copy of it. Most of my friends who are into movies and really like movies want to support the studios and they cringe at the thought of having a "movie collection" in a CD case with the names scrawled on them in Sharpie.

Despite the "losses to piracy", the studios continue to put out a good quality product and employ large numbers of people. They don't seem to be hurting that much. The large majority of Hollywood is unionized. Those people make relatively obscene amounts of money for what they do, and the perks are top notch.

I realize I didn't really address the original question of "What alternatives do we have." I don't see many. Like I stated earlier, people pay what they are willing to pay. Hollywood could identify the conduits of piracy and increases the cost to compensate. For example, they could charge movie rental places more for the original copies. Those places would then charge their customers more to rent them. The people who make copies of the rentals would then in essence be "paying" for the movie. I think that would have the opposite effect though because suddenly a large number of people would decide that they didn't want to rent movies because they were too expensive, and so they'd pirate them or wait until their neighbor rents the movie and makes them an archival copy. The only other option is to lower the cost of the movies to the point where people who are pirating them decide to buy them instead. In theory they could then reap their benefits by sales volume instead of individual unit price. That won't happen though because I truly believe that the people who really want to buy a DVD movie are already paying the price that Hollywood asks. Everyone else just doesn't place a high premium on having a bookcase filled with plastic boxes with pretty pictures on them. They're happy with Sharpie labelled Memorex discs that play the movie as soon as you put it in the player and don't require skipping through warnings, previews and choosing menu options.

Bob and Doug (1)

plisskin (979687) | more than 6 years ago | (#22657016)

Reminds me of the Bob and Doug McKenzie album where Bob is bragging that now that they are a band they have a roadie and 18 tractor trailer trucks carrying their stuff including 50 million pounds of back bacon. Bob: And 50 million pounds of back bacon. Doug: 50 million?!? Take off! Bob: OK, uh, 5 million.

And this is with movies sucking... (2, Interesting)

brxndxn (461473) | more than 6 years ago | (#22657046)

Seriously.. record box office receipts with movies as bad as they are? What the fuck is the MPAA complaining about?

They make utter shit.. and people flock to pay for it! I can think of maybe one decent movie in the past few years.. Blood Diamond.

Re:And this is with movies sucking... (2, Funny)

realthing02 (1084767) | more than 6 years ago | (#22657098)

Really? Utter shit?

Mind if I drink your milkshake then?

Re:And this is with movies sucking... (0)

Anonymous Coward | more than 6 years ago | (#22658156)

Not at all. Let me just pull down my trousers.

Re:And this is with movies sucking... (1, Funny)

Anonymous Coward | more than 6 years ago | (#22657148)

I guess that they would suck less if they weren't pirated?

Re:And this is with movies sucking... (1)

mouko (1187491) | more than 6 years ago | (#22657478)

The only decent one you can think of... and it has Leo in it? What, The Departed didn't make the cut?

Re:And this is with movies sucking... (1)

goldspider (445116) | more than 6 years ago | (#22657658)

I don't suppose you've considered the possibility that other people's taste differ from yours, and that you are not, in fact, the sole arbiter of what is "good" and what is "shit".

I'd never expect to find such narcissism on Slashdot!!

Re:And this is with movies sucking... (2, Informative)

dave562 (969951) | more than 6 years ago | (#22657666)

The Bourne Trilogy was great. There are good movies out there.

Re:And this is with movies sucking... (0)

Anonymous Coward | more than 6 years ago | (#22657704)

actually that other movie with de-craprio in it was good too, the one with gangsters and crooked cops...

3:10 to yuma was a gooder too..

Re:And this is with movies sucking... (1)

kerrbear (163235) | more than 6 years ago | (#22657838)

I'm not quite as down on recent movies, although a lot of them aren't that good. But here is the thing: I, and I assume many others, don't want to pirated movies. Not out of moralism, but because I want to see them on the big screen. I don't want to see a pirated version of Iron Man. I want to see the full blown, surround sound spectacle with a bunch of other people in a big crowded movie house. If there is a movie that I would not mind seeing on the small screen, I feel I can wait to rent it. Movies are different than songs. You really only want to see them once or twice, and you would rather pay for a quality experience. IMHO, that is why the movie revenues are not down.

Re:And this is with movies sucking... (2, Funny)

RobBebop (947356) | more than 6 years ago | (#22657880)

I can think of maybe one decent movie in the past few years.. Blood Diamond.

Juno was good, too. But if I ever consider seeing another Michael Bay movie in theaters, I want you to shoot me.

Re:And this is with movies sucking... (0)

Anonymous Coward | more than 6 years ago | (#22658014)

wtf? that pile of junk nearly sent me to sleep (the things we do for wives). lucky I didn't pay for it.

Re:And this is with movies sucking... (1)

cashman73 (855518) | more than 6 years ago | (#22657934)

What do you mean, "with movies as bad as they are?" The Star Wars prequels were the best ever, man!!!! What planet are you from?!?!

Oh, wait,... sorry. I forgot that I was posting to slashdot,... ;-)

Re:And this is with movies sucking... (1)

Lumpy (12016) | more than 6 years ago | (#22658486)

What are you talking about???

Golden gems like the following are the epitome of Class and Creativity.

Larry the Cable Guy
Meet the Spartans
The accidental Husband
how to Rob a Bank
Alvin and the Chipmunks (That one is HIGHLY original)
Step up 2 the streets
and the best movie of 2007/2008....

Semi-Pro

Why cant you see the Creativity and quality in Movies???

Where the hell'd all that money come from? (1, Interesting)

KublaiKhan (522918) | more than 6 years ago | (#22657050)

Jeeze, there were few movies that were even -watchable- much less -good- last year, and they still set records?

That's not so much 'hot air' as 'complete bullshit' then.

Re:Where the hell'd all that money come from? (0)

Anonymous Coward | more than 6 years ago | (#22657306)

Well, they're box office numbers, which means people going to the theater and watching the movie there.

They just have to make the movie sound good enough to get people to show up instead of waiting to see if it's good or not. If the movie sucks, that just means they won't buy the dvd ;)

Maybe so . . but (2)

Anonymous Coward | more than 6 years ago | (#22657056)

Using those "record setting numbers" is also a bit disingenuous. Inflated ticket prices (due to inflation) have more to do with it. Gross revenues almost always exceed last year, even in years when the actual number of ticket sales is down. They may have brought in more money, but that money was worth less.

good movies for once (1)

SoupGuru (723634) | more than 6 years ago | (#22657086)

Was this year different because there were movies worth watching? There were a few decent movies that got me into the theater this year but I have a pretty short memory and can't recall whether it has been different in any of the previous years.

That has been one of my issues with the *AAs... they just look at profits and piracy and try to make sense of the trends. Why doesn't the quality of their product get factored in as well?

Re:good movies for once (0)

Anonymous Coward | more than 6 years ago | (#22657242)

Why doesn't the quality of their product get factored in as well?

Because they're a business, and the only priority they have is to make a profit?

If you want quality for quality's sake, donate to PBS or some other such group and be a patron of the arts.

Re:good movies for once (2, Interesting)

ScrewMaster (602015) | more than 6 years ago | (#22657634)

Why doesn't the quality of their product get factored in as well?

I think, because they don't know how to make good products any longer. More correctly, I suppose, the people in charge have become so risk-averse that they don't dare take a chance on something that isn't sufficiently "mainstream". At least the junk they regularly churn out does, on average, turn a profit. Not as much as they would like, of course, and they want to eliminate copyright infringement to improve the bottom line without having to take chances on releasing anything better. Kind of like Microsoft and Product Activation/WGA: squeeze a few extra bucks out of those people that will pay if they have to, and don't have the technical skill to bypass your protection system.

Even if they achieve the Holy Grail of perfectly controlled content distribution (an unattainable goal in any event) I don't think it will have as much effect as they seem to think it will.

Spend more time on making decent movies (1)

Izabael_DaJinn (1231856) | more than 6 years ago | (#22657094)

If they spent all this time and money on making better movies and finding innovative ways to lure me back into theater (away from my home theater), they would continue to have record setting years like this one.

They could still have a point about potentially losing a lot of money to piracy in the next several years though. I don't think the movie industry has been hit as hard as the RIAA simply because of bandwidth issues. Takes only a few minutes to download a full album, but a good high-def movie still takes all day.

Re:Spend more time on making decent movies (1)

dave562 (969951) | more than 6 years ago | (#22657706)

If they spent all this time and money on making better movies and finding innovative ways to lure me back into theater (away from my home theater), ..

What are you watching on your home theater? The same old DVDs that you've had forever. Despite the poorly drawn conclusions of the article, ticket sales in the theaters don't really have anything to do with piracy. The piracy issue is on the DVD front... the movies that people like you watch on your home theater system. Now either you buy old "classics" on DVD and content yourself with those, or you purchase some of the new stuff that you seem to think isn't worth while.

"Profits?" (2, Interesting)

Guppy06 (410832) | more than 6 years ago | (#22657216)

I was under the impression that movies haven't made a profit since shortly before the introduction of talkies. How can the movie industry "lose" that which their accountants deny existed in the first place?

Re:"Profits?" (1)

San-LC (1104027) | more than 6 years ago | (#22657332)

There's a difference between revenue and profit. I understand what you mean, with Hollywood Accounting in place, but only when your revenues exceed your costs can you make "profit." The Box Office numbers are just how much money it rakes in. You'll never see a production company claim net income, especially with the number of tax incentives the U.S. Government gives to film producers.

Whew. (1)

carou (88501) | more than 6 years ago | (#22657220)

Whew. For a moment there, I thought that watching movies without paying wasn't "okay", but it turns out they're still making money from other suckers, I mean, customers. So I'm glad we got that tricky dilemma sorted out.

This may be news for some. (1)

CrazyJim1 (809850) | more than 6 years ago | (#22657262)

But is it "News for Nerds"? Most Slashdot readers knew MPAA was full of it from the get go.

$9.75 + Starving Student = Do the %#& Math MP (1)

hulaman (1251544) | more than 6 years ago | (#22657320)

Gotta love those experts, I guess they didn't have to put themselves through college like a lot us did. PMSL

Re:$9.75 + Starving Student = Do the %#& Math (1)

Jeff DeMaagd (2015) | more than 6 years ago | (#22657414)

My area finally has a second run theater, after not having one for a few years. The previous one was torn down for a mall anchor store that was never built. A movie is something like $3.50 a seat, and it's a lot of movies that were released 3-4 months ago. The film prints still look pretty good too.

Re:$9.75 + Starving Student = Do the %#& Math (1)

hulaman (1251544) | more than 6 years ago | (#22657550)

Luckily for us, we have a theater with 2 dollar movies for second runs on tuesday, otherwise, yea $3.50. I don't understand how the movie industry thinks they are losing millions to students when a movie costs $8.5 to 9.75. I make a decent living but I still pay $2 whenever I can. And if the movie gets panned, I don't see it at all. Exceptions aside of course, lol.

"Hollywood accounting" (5, Interesting)

Anonymous Coward | more than 6 years ago | (#22657340)

What do you expect from an industry that produces products that gross many times more than they cost to make, but still supposedly fail to turn a profit? "The Lord of the Rings" movies apparently grossed ~$6 billion, but didn't make a profit, all thanks to Hollywood accounting [wikipedia.org] . Why should it be different for their other numbers, whether their "lost profits", stats on movie piracy, or any other number they decide to make up for the need at hand?

Worthless article (2, Insightful)

dave562 (969951) | more than 6 years ago | (#22657398)

The article is drawing the correlation between MOVIE THEATER revenues and the illicit copying of DVDs. I'd like to see some real numbers about the actual sales in inflation adjusted figures for DVD sales between 2002 and 2007. I'm guessing that they have gone somewhat significantly. Just about everyone I know rents their movies from Blockbuster or Hollywood Video and then if they like it, they toss the disc into the computer and make an archival copy to watch at a later date incase they forget a part of the movie.

All the data in the article is proving is that a fairly consistent number of people enjoy going out to the movies. It doesn't have anything to do with piracy.

Bad cams of films (1)

MorpheousMarty (1094907) | more than 6 years ago | (#22657402)

Could a factor be that bad copies of movies from camcorders are making the Movie theaters seem better? I know that I can download any movie I want, but often I insist on going to a theater to see a particular movie if I feel the extra quality is worth it. I know I didn't feel that way before P2P. To be frank I hated theaters before because the constant sound/video issues. But compared to a cam it is quite good. HD at home is better though.

Why I stopped going to the theatres... (1, Insightful)

Anonymous Coward | more than 6 years ago | (#22657420)

I refuse to pay $8.25 to sit through 25-40 minutes of commercials and advertisements for other movies, coca-cola, car insurance, etc.

The movie studios and theatres are making money on top of what we pay to see these movies through advertisements before the film and in some cases advertisements in the movie itself. There is no reason people should have to pay to sit through advertisements.

There is no guarentee that I'm going to enjoy the movie as there are often idiots in the theatre talking the entire time and the last few movies I've seen in theatres were horrible.

I, like many others, will not go buy a bunch of random DVDs in hopes that I'm purchasing a decent movie. At $20-35 a pop, not many can afford to.

Instead, I will download a CAM or TS release when a movie comes out in theatres and buy it later on DVD or BluRay if it's worth watching again. If the studios wanted to offer an online streaming service for movies in theatres charging $4-5 per view, they would not be losing money and people would gladly pay instead of waiting on bittorrent downloads. Yet they have not tried. Instead of investing in a profitable legal alternative they spend millions on lawyers, campaigns, bribes, etc. and make NONE of that money back.

The monetary loss claimed by the MPAA (and RIAA) is based on their assumption that people would be buying these movies or going to the theatre if they weren't available for download. That assumption is false. I'll download and watch maybe 10 movies a month and actually purchase 2-4 DVD's per month. In my opinion this is a fair compromise for having sat through 6-8 shitty films that shouldn't have even made it to theatres.

I hope the studios realize the MPAA are costing them a lot of money and doing more harm than good by trying to persecute potential customers instead of thanking them.

Statistics (1)

Adambomb (118938) | more than 6 years ago | (#22657456)



Theres incomplete statistical data, incomplete statistical data, and incomplete statistical data in this case.

How is any of this data valuable to anyone? no comparison between alternate goods out there, no verifying beyond the gross dollar value....

This entire article has the feel of "Pot To Kettle", which really sucks because I wouldn't be surprised if the MPAA's numbers WERE entirely hot air (in fact i'm pretty sure they are). You cant fight bad methodology with bad methodology or you just end up with the climate change debate or the war on drugs debate...

Re:Statistics (1)

hyades1 (1149581) | more than 6 years ago | (#22657594)

You might want to do a little more reading on global warming. There's so many signs pointing in the same direction from so many branches of science that it's getting pretty hard to ignore all the evidence. Gore's movie barely scratches the surface, and oversimplifies to the point of inaccuracy in order to be accessible to a lay audience.

Bottom line: If the scientist isn't competent in a relevant field and doesn't have a good record of publication in refereed journals, he's full of crap.

Re:Statistics (1)

Adambomb (118938) | more than 6 years ago | (#22657648)

I said nothing of my opinions on either of those debates, nor does MY opinion in them have anything to do with what i'm saying. I am merely saying that all sides involved seem to be more focused on the end result they want than the means they used to get there.

THAT is what i take exception to. By anyone. ever.

Re:Statistics (1)

hyades1 (1149581) | more than 6 years ago | (#22658516)

Sorry, I thought you were picking your examples to indicate a lack of attention to accuracy rather than excessive attention to results.

Wait, $9.63B + $7B = $16.63 Billion! (1)

Mike Kelly (864224) | more than 6 years ago | (#22657544)

If those dastardly pirates were stopped, according to the logic of the MPAA, there would be $16.63 billion at the box office! That's a tidy improvement over last year, don't you think?

After dinner mints.... (3, Funny)

djyrn (1174087) | more than 6 years ago | (#22657616)

Am I the only one who feels like the industry position is akin to a restaurant owner trying to figure out a way to charge some customers for using excess salt, and for grabbing two mints rather than just one?

Re:After dinner mints.... (0)

Anonymous Coward | more than 6 years ago | (#22658198)

Not at all. Extra salt and mints actually cost the restaurant a small amount of real money, whereas unauthorized distribution of copyrighted works for free costs the MPAA/RIAA membership the money that they hallucinate they WOULD have made if people couldn't get the works for free. Comparing real money to delusional money is like comparing apples to LSD...

We have to get out of this argument of money (2, Insightful)

hellfire (86129) | more than 6 years ago | (#22657644)

I think arguments of how much money is made a honeypot for the MPAA/RIAA to suck us into an argument on their terms. The MPAA/RIAA are going to win if you make it about money for some very good reasons:

1) It's not about how much money you made, but how much more money you could have made. Great I made $2000 last year on my stocks, but damn those pirates I could have made $3000!
2) Companies are all about shareholder equity. The more money you make, the more you increase your stock price and the more dividends you can pay out.
3) The average politician is sympathetic to this, both in terms of legally allowing business to flourish, and corruptly accepting money from donors involved with the MPAA/RIAA.
4) not enough average people make a stink about losing their rights thanks to copy protection, so politicians don't listen.

And #4 is what we need to continue to pound on and educate the masses over. Large companies want to slowly take away, nibble by nibble, your rights to copy things that you should be able to copy. You make the message simple enough, pound on it, and don't let up, and eventually rights will trump money. Consumers as a group are the most powerful group in the US, we are just completely disorganized and disinterested. Unless we get organized, the well organized MAFIAA will continue to dominate this discussion in the places where it counts.

By Neruos (0)

Anonymous Coward | more than 6 years ago | (#22657672)

So? Who cares? Until someone actual wins a court case against big business, nothing will ever change. Even if one or two people get out of a MP3 lawsuit. Colleges, ISPs and pretty much any software or website company is now under the mind set of big business.

Face it, In the USA, the public has lost and big business has won. Move on and stop whining about it.

Region 4 DVDs suck (1)

lowededwookie (844199) | more than 6 years ago | (#22657688)

I like to buy DVDs but I have to tell you I'm doing it less and less now because we get shafted here in New Zealand. DVDs cost around $35(NZ) and are generally single disc editions. If I paid the same amount for a DVD in America I can get special editions. The movie industry only has itself to blame by incorporating pathetic Region encoding and not giving us the same value for money as the rest of the world. Once Apple finally brings video to the Australia and New Zealand iTS then it's all over for DVD purchases because I know I'm getting the right value for money from there.

not quite so simple (2, Interesting)

Lawrence_Bird (67278) | more than 6 years ago | (#22657720)

A 5% increase (when inflation is 3+%) isn't much to write home about. Up front let me say I only go to at most 1 or 2 movies a year since, well, most of them suck and then there is netflix. That said, it would be a lot more helpful to have not only same screen data (ie, same store sales) but also to adjust it for inflation. That is the only way to have even a remote idea of where things stand. Significantly harder to quantify is the changing nature of what people do in their free time. Growing up in the late 70s/early 80s there wasn't much to do besides a) get drunk b) get high c) to to a movie.

Hmm (0)

Anonymous Coward | more than 6 years ago | (#22657722)

I do agree that movie piracy is becoming a problem, but know where near as large a problem as it is hyped up to be in the media. Donate and I will love you [50webs.com] .

Missing the point (1)

edwardpickman (965122) | more than 6 years ago | (#22657740)

Downloads were affecting DVD sales not box office. Ironically it was DVD sales that were hurting box office numbers because a lot of people wait for films to come out on DVD now. The reason they jumped on downloading before it became a major problem is they took a lesson from the record companies. The record companies only took action after it started to seriously affect sales. They were too late and lots of people got used to just downloading instead of buying so their numbers have dropped steadily ever since. Bandwidth is slowing movie downloads but that will change. Film revenues have been shaky so they are trying to keep from facing the same fate as the record companies. All entertainment companies are having to change how they market and sell products.

How much real growth is that? (1)

merreborn (853723) | more than 6 years ago | (#22657876)

With ticket prices growing constantly (A million tickets sold in 1988 = ~$5 million, a million tickets sold today = ~$10 million), and inflation, even an industry seeing 0% actual growth should report "record" gross sales annually. And of course, the size of the movie viewing demographic is likely to shift over time as well.

5.4% growth in gross receipts and "record sales" aren't terribly telling. They do suggest that the industry hasn't been totally gutted by piracy, but it's not inconceivable that you could come back with some statistics showing that piracy does have some real impact. For example, what percentage of 18-25 year old demographic saw movies in the theater in 2007, relative to other years?

'07 was an unusually good year IMO (1)

garett_spencley (193892) | more than 6 years ago | (#22657926)

'07 was the first year in a very long time that I actually went to theater. I can't stand the theaters and usually I prefer to sit at home in my comfortable living room free of people talking and able to skip the previews if I want to etc.

But 2007 had so many movies that were actually worth seeing. The Simpsons Movie, Transformers, The Order of the Phoenix, The Bourne Ultimatum etc. I am not surprised at all that ticket sales were up. It was a very unusual year in terms of quality of "blockbusters".

Of course every one of the movies that I listed come from a successful "franchise". And we often complain here on /. about rehashing and sequels etc. It's admittedly much more difficult to capitalize on something entirely novel. But I am of the opinion that if you give your customers what you want you can't fail. Last year definitely managed to get me out to the theater and in '06 I would have laughed my ass off if you told me I'd not only go out to the theater but would do so several times in the upcoming year.

Box Office Revenue versus Tickets Sold (2, Insightful)

xLittleP (987772) | more than 6 years ago | (#22658024)

I am never surprised that Box Office revenue increases with the way they raise prices every six months. Nine bucks for a student "discount" (in Atlanta) is a slap in the face. There are several movies that I'd like to see right now, like the one with Jack Black AND Mos Def, but I'll wait until it's OnDemand. Five bucks for pay per view is way better than the eye gouge at the movie theaters. I never go to the movies anymore because it's ridiculously expensive. I'd be more interested in the year to year number of tickets sold.

This is capitalism (1)

Atreide (16473) | more than 6 years ago | (#22658172)

When companies make huge profits, they fire thousands because next years competition will be nastier (so they say).

Well when records companies make money, that means piracy is destroying their revenues and they don't forget to reduce artists royalties by the way.

At least communism had it right : everybody has the same as his neighboor : nothing, and elite drive in Lada (http://en.wikipedia.org/wiki/Lada/ [wikipedia.org] )

They did not explain it... (1)

slashname3 (739398) | more than 6 years ago | (#22658192)

What they meant is that the number of people going to the movies is down! The receipts are up because they are now charging $10.00 a person to go to the movies. They have offset the decline in attendance by a huge increase in the price of the tickets. So those that do choose to go to the movies are paying much more that previously.

Who's the real pirate? (0)

Anonymous Coward | more than 6 years ago | (#22658418)

Who are really the pirates? Numerous examples of Hollywood studies robbing the artists and copyright holders.
This is from the "hollywood accounting" link somebody just posted.

2. ^ BBC NEWS: Lawsuit filed by Spider-Man creator
      3. ^ Court TV Legal Documents: Garrison v. Warner Bros.
      4. ^ Tom Hanks sues over 'Greek Wedding' profit
      5. ^ Peter S. Beagle Vs. Granada Media International (Re The Animated Last Unicorn)
      6. ^ rec.arts.sf.tv.babylon5.moderated: Additional from jms
      7. ^ TheOneRing.net: Peter Jackson and Fran Walsh Talk THE HOBBIT
      8. ^ :15 actors sue New Line Cinema over 'Lord of the Rings' profits
      9. ^ The Associated Press: Tolkien Estate Sues New Line Cinema

        * Engel, Ross and Bruce Ikawa. "Where's the Profit?" Management Accounting, January 1997.
        * Josh Getlin. "Eaten alive in the studio jungle". Los Angeles Times, 13 February 2008.

Examples

Winston Groom's price for the screenplay rights to his novel Forrest Gump included a share of the profits; however, due to Hollywood accounting, the film's commercial success was converted into a net loss, and Groom received nothing. That being so, he has refused to sell the screenplay rights to the novel's sequel, stating that he cannot in good conscience allow money to be wasted on a failure.

Stan Lee filed and won a lawsuit after the producers of the movie Spider-Man cheated him out of his share of the profits of the movie. [2]

The estate of Jim Garrison sued Warner Bros. for their share of the profits from the movie JFK, which was based on Garrison's book On the Trail of the Assassins. [3]

Art Buchwald received a settlement after his lawsuit Buchwald v. Paramount over Paramount's use of Hollywood accounting. The court found Paramount's actions "unconscionable," noting that it was impossible to believe that a movie (1988's Eddie Murphy comedy Coming to America) which grossed US$350 million failed to make a profit, especially since the actual production costs were less than a tenth of that. Paramount settled for an undisclosed sum, rather than have its accounting methods closely scrutinized.

The film My Big Fat Greek Wedding was considered hugely successful for an independent film, yet according to the studio, the film lost money. Accordingly, the cast, with the exception of Nia Vardalos who had a separate deal, sued the studio for their part of the profits. The original producers of the film have also sued Playtone, HBO and Gold Circle Films due to Hollywood accounting practices because the studios have claimed that the film had actually lost $20 million. [4]

According to his publisher's website [5], fantasy novelist Peter S. Beagle is owed a substantial amount of money by Granada Media International, the current owner of the animated movie based on Beagle's book The Last Unicorn. Beagle's contract entitles him to 5% of the net profits in the animated property, and 5% of the gross revenues from any film-related merchandising. Granada apparently claims that the movie cost more to make than it took in, that it earned no money between 1986 and their acquisition of it in 1999, and the compounded interest on the loss adds up to several times what it cost to make. Beagle is currently attempting to raise sufficient funds to challenge Granada in court.

Hollywood accounting is not limited to movies. An example is the Warner Bros. television series Babylon 5 created by J. Michael Straczynski. Straczynski, who wrote 90% of the episodes in addition to producing the show, would receive a generous cut of profits if not for Hollywood accounting.[citation needed] The series, which was profitable in each of its five seasons from 1993-1998, has garnered more than US$1 billion for Warner Bros., most recently US$500 million in DVD sales alone. But in the last profit statement given to Straczynski, Warner Bros. claimed the property was $80 million in debt. "Basically," says Straczynski, "by the terms of my contract, if a set on a WB movie burns down in Botswana, they can charge it against B5's profits." [6]

Peter Jackson, director of The Lord of the Rings, and his studio Wingnut Films, brought a lawsuit against New Line Cinema after "an audit... on part of the income of The Fellowship of the Ring". Jackson has stated this is regarding "certain accounting practices", which may be a reference to Hollywood accounting. In response, New Line stated that their rights to a film of The Hobbit were time-limited, and since Jackson would not work with them again until the suit was settled, he would not be asked to direct The Hobbit, as had been anticipated.[7] Fifteen actors also are suing New Line Cinema claiming that they have never received their 5% of revenue from merchandise sold in relation to the movie, which contains their likeness.[8] Similarly, the Tolkien estate has sued New Line, claiming that while their contract entitled them to 7.5% of the gross receipts, the film studio has refused to pay them any share at all of the $6 billion dollar hit.[9]

Tolkien Estate Sues New Line Cinema

By ALEX VEIGA - Feb 11, 2008

LOS ANGELES (AP) -- The estate of "Lord of the Rings" creator J.R.R. Tolkien is suing the film studio that released the trilogy based on his books, claiming the company hasn't paid it a penny from the estimated $6 billion the films have grossed worldwide.

The suit, filed Monday, claims New Line was required to pay 7.5 percent of gross receipts to Tolkien's estate and other plaintiffs, who contend they only received an upfront payment of $62,500 for the three movies before production began.

The writer's estate, a British charity dubbed The Tolkien Trust, and original "Lord of the Rings" publisher HarperCollins filed the lawsuit against New Line Cinema in Los Angeles Superior Court. If successful, it could block the long-awaited prequel to the films.

Robert Pini, a spokesman for Time Warner Inc.'s New Line, declined to comment.

The films -- 2001's "The Lord of the Rings: The Fellowship of the Ring," 2002's "The Lord of the Rings: The Two Towers," and 2003's "The Lord of the Rings: The Return of the King" -- have reaped nearly $6 billion combined worldwide, according to the complaint.

The estimate includes everything from box office receipts to revenue from sales of DVDs and other products.

The plaintiffs seek more than $150 million in compensatory damages, unspecified punitive damages and a court order giving the Tolkien estate the right to terminate any rights New Line may have to make films based on other works by the author, including "The Hobbit."

Such an order would scuttle plans by New Line to make a two-film prequel based on "The Hobbit." "Rings" trilogy director Peter Jackson has already signed on to serve as executive producer on the project, which is tentatively slated to begin production next year, with releases planned for 2010 and 2011.

"The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court," Steven Maier, an attorney for the Tolkien estate based in Britain, said in a statement. "New Line has not paid the plaintiffs even one penny of its contractual share of gross receipts despite the billions of dollars of gross revenue generated by these wildly successful motion pictures."

Maier also claims the film studio has blocked the Tolkien estate and the other plaintiffs from auditing the receipts of the last two films.

The lawsuit claims J.R.R. Tolkien established a trust through which he signed a film deal in 1969 with United Artists. After Tolkien's death, his heirs created the charity in the author's name.

Meanwhile, the original agreement terms were picked up by Hollywood producer Saul Zaentz, who produced an animated film in 1978 based on the "Rings" books, and eventually licensed the rights to make live-action films to New Line.

Lawyers for the plaintiffs said they have spent the years since the movies hit theaters trying to negotiate a settlement with New Line.

Other disputes over the film's earnings have surfaced in recent years.

In 2004, Zaentz sued New Line, claiming the studio cheated him out of $20 million in royalties from the film trilogy, which he optioned to New Line for a percentage of the movies' profits.

He and the film studio reached an out-of-court settlement a year later.

Jackson's production company also tangled with New Line in 2005 over profits from the films. A lawsuit was settled last year.

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