The movie industry makes record profits so piracy doesn’t matter after all.…that’s the gist of many headlines following MPAA Chief Chris Dodd’s recent speech at Cinemacon’s Las Vegas convention last week where he said, “the state of our industry has never been stronger.” We’ve seen this phenomenon before. Positive news about record global box office revenue is twisted into justification for the pro-piracy mantra that piracy doesn’t hurt filmmakers.
These rosy 2015 box office figures were first announced in January. Then, as with now, piracy apologists pounced on the message as proof piracy doesn’t negatively impact the movie industry. Even those writing about it took note of the repetitive nature of their particular meme as Techdirt’s Mike Masnick noted in a January post:
We seem to end up posting stories like this every year, but it just keeps on happening. Hollywood whines and whines and whines about how piracy is killing the movie business… and then announces yet another record year at the box office.
The idea that record profits prove piracy doesn’t matter both simplistic and naive. Sure, Hollywood (and studios throughout the world) are making movies….big movies, blockbuster movies, superhero movies, sequels galore…remakes of movies that have already been made. Such fare performs well at the box office. However, if one drills deeper, beyond the totals, it’s easy to find proof that online piracy is corroding filmmaking in a way that undermines both consumers and creators.
Piracy diminishes both the number–and diversity– of films being made, both inside and outside Hollywood.
I’ve written about this issue before.
While (most) Hollywood studios did make a lot of money in 2015, the truth conveniently omitted from the post in Torrent Freak is that they did so by producing fewer films. After all, the studios are in the business of making money for their shareholders and to that end–in this age of unchecked piracy–fewer chances can be taken on movies that won’t draw huge crowds. The Hollywood films that are being made are those that are sure bets to overcome digital theft and still make money. In 2015, the top 5 films made 20% of the revenue.
Evidence of the less is more trend is everywhere. Earlier this month it was reported that Warner Brothers would produce fewer films, focusing instead on “tentpole” productions. According to a recent story in The Hollywood Reporter:
Warners long has been known for its commitment to filmmaker- and star-driven projects, but sources see signs of a change in culture, though the studio denies there is one. Several executives and agents say Warners seems to be greenlighting fewer homegrown movies as it focuses on silos that echo those that generate so many hits for Disney (Marvel, Lucasfilm, Pixar and Disney Animation). In Warners’ case, the silos are DC Comics, Lego and a planned franchise spun off from the Harry Potter series.
In March, Variety reported on a report “Another Memo to Hollywood. Prediction? Pain.” Written Creutz, an analyst for research firm Cowen and Company, Cruetz told Variety’s James Rainey that Hollywood’s future looked “increasingly dire” due to shrinking audiences.
Creutz says the industry’s woes are demonstrated by the fifth consecutive year in which domestic box office demand “has taken a step function lower.” The fight for remaining audiences has become increasingly fierce as “the market appears to be condensing into fewer, but bigger, hits,” as studios crank out more films in the $100 million-plus budget range…
…Creutz offers a welter of stats to back up his contraction argument: “Last year, over 25% of total box office came from just five films, well above the average of roughly 16% from 2001-14 and the prior peak of 19% in 2012.” He called this a “consistent phenomenon.”
Consumers should be worried that, over the last decade, the number of films Hollywood’s produced has dropped precipitously. What this means is fewer choices for audiences. Films that tell stories about characters (people) who are neither CGI super heroes nor animated characters are quickly becoming an endangered species.
David Gritten examined Hollywood’s move toward producing fewer films for a piece in The Telegraph:
BUT EVEN SUPPOSING THE STUDIOS ARE RIGHT: THAT FEWER FILMS ARE BETTER, BIGGER FILMS MAKE MORE SENSE, THAT COMMERCIALLY TESTED AND TRIED MATERIAL IS THE PRUDENT WAY TO GO, THAT TEENAGERS WILL ALWAYS BE THE MOST PLIABLE AUDIENCES – WHERE’S THE VICTORY IN THAT?
EVEN IF CURRENT STUDIO THINKING IS PROVED RIGHT AND IN THE LONG TERM, BLOCKBUSTERS ENABLE THEM TO RAKE IN REVENUE AND LOOK WALL STREET SQUARELY IN THE EYE, CONSIDER WHAT’S BEEN LOST. HOLLYWOOD WILL BE CHURNING OUT A PREDICTABLE SERIES OF DULL, MONOTONOUS, SPECIAL-EFFECTS HEAVY, DRAMATICALLY INCOHERENT MOVIES FOR A RELATIVELY SMALL SEGMENT OF THE CINEMA-GOING AUDIENCE. THE STUDIOS MAY SURVIVE: BUT WHAT A DIMINISHED INDUSTRY THEY’LL BE PRESIDING OVER.
Online piracy’s corrosive impact on content creation not limited to theatrical releases
Of course, piracy is but one factor in a complex potpourri of influences provoking shifts in the movie business. As distribution models continue to evolve in this digital age the rise of streaming services like Netflix, Amazon, et al has certainly been felt. Yet, even as viewing choices shift away from theaters to streaming outlets, these producers are not immune from piracy’s damage effect. Streaming’s top dog Netflix has teamed with digital protection firm Vobile to safeguard its digital content (and subscriber base) from online thieves. Whether productions are destined for theatrical release or for viewing in the comfort of ones own home, content producers still need to generate revenue in order to thrive.
Piracy’s apologists who chortle that Hollywood should adopt new business practices as a response to piracy are getting their wish. Under duress Hollywood is adapting, but at what cost to us–the viewing public? Evolving to to meet the 21st century digital world is inevitable, but should it be illegal theft that dictates how such change will manifest itself?
With this type of evolution, in the end, we will be the losers. It’s difficult to appreciate how much we’re truly missing if it’s never made…