11 March 2010

Hollywood's Post-theatrical Problem, Isn't

There's a great piece in the Washington Post with the headline "The MPAA says the movie business is great. Unless it's lousy." This rightly points out that there is something funny going on in the film industry's view of itself.

On the one hand:

global box office receipts reached an all time high of $29.9 billion, an increase of 7.6% over 2008 and almost 30% from 2005. The U.S./Canada market reached $10.6 billion, an increase of more than 10%, and International receipts increased 6.3% to $19.3 billion in 2009 .... Ticket sales in the U.S. and Canada rose more than 5.5% from 2008, the first admissions increase in two years. Per capita ticket purchases in the U.S. and Canada also increased 4.6% to 4.3 tickets per person, the first significant increase since 2002.

On the other:

you wouldn't know that the movie business was doing so well from other MPAA announcements. Take, for instance, the December press release (PDF) in which MPAA chairman Dan Glickman suggested that unauthorized copies of movies were running the industry into the ground:

"Yet our industry faces the relentless challenge of the theft of its creative content, a challenge extracting an increasingly unbearable cost."

The writer then has the following key explanation:

Asked to clarify, MPAA spokesman Howard Gantman said the industry suffers the greatest damage from fraudulent copies (he said "piracy," but I disagree with that usage) in the post-theatrical markets -- video-on-demand, downloads, DVD and Blu-ray.

I love that "post-theatrical markets" phrase, but what I like even more is this amazingly clear illustration of what is happening in the film industry.

That is, the analogue side - ticket sales in the cinemas - is soaring, while the digital part - those "post-theatrical markets" - are on the way down. And that's absolutely inevitable, of course, because the scarcity is all on the analogue side, while the digital artefacts - downloads, DVDs and Blu-ray - have close to zero marginal cost (not so true for DVDs and Blu-ray, but close enough), so you'd expect their prices and profits to diminish.

In other words, the industry's own figures are a perfect confirmation that it needs to concentrate on the analogue side, and to regard the digital side as an incredibly efficient way to boost it. But somehow I don't think that's the message it's going to be taking home in the near future, more's the pity. (Via @rlancefield.)

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guy said...

Another variation of hollywood accounting (http://en.wikipedia.org/wiki/Hollywood_accounting)?

Glyn Moody said...

@guy: thanks, I hadn't come across that before (sheltered life etc....)