If Piracy Is Destroying The Movie Business, Why Is The Box Office Surging?

from the so-much-for-that-theory dept

We’ve already discussed how last year the movie industry had yet another record setting year, despite the fact that the most popular movies in the theaters were also the most pirated. Yet, just a few weeks ago, we were hearing the movie studios whining (and, oddly, the NY Times buying their argument) that “piracy” was “winning the battle” against the industry.

Odd, then, that this weekend the NY Times (without ever referring back to that article from less than a month ago) is noting that attendance at movie theaters is way up since the beginning of 2009. And, no, it’s not just that tickets cost more (though, they do), but in real numbers more people are going to the theaters. The article suggests that it’s because of the recession. More people want to “escape” from reality and not have to think for a few hours, and a movie theater is a cheaper way to do that than many other options.

But, of course, if we believe the movie studios (and, um, the NY Times as of a few weeks ago), digital “piracy” is killing the business. You would think that, in a recession, the problem would just get worse, since fewer people would be willing to spend money on a movie they could get at home. But, it seems that the opposite is happening. But, who needs evidence? Somehow I doubt that we’ll get the NY Times to admit its earlier story was wrong — nor will the MPAA stop blaming piracy for supposed, but totally unproven, losses. Why bother with evidence when you can make an emotional appeal for the government to prop up your business model?

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Comments on “If Piracy Is Destroying The Movie Business, Why Is The Box Office Surging?”

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Anonymous Coward says:

The problem is that people buy into the assumption that if you have to pay for it you will, and if you don’t you won’t. They never dig into the questions of free information and they definitely don’t think about business model paradigm shifts.

That’s why they don’t see the articles as contradictory. Even though revenues are up, they could be up even higher.

ehrichweiss says:

Re: Re:

Agreed. I pay for software that is offered as free all the time. If they have a “donate” button and I like the software, I support the “artist”. I also download music and movies and I buy the ones I like, in the case of music I buy directly from the artist if possible, or simply attend one of their shows where they’ll see more from me than if I bought a CD from the RIAA.

Of course if they want me to stop paying so they can have justification to make some new laws, I’ll be happy to shut off a stream of income for them.

chris (profile) says:

piracy is winning

because piracy is unstoppable.

piracy is just not trying to destroy the film industry the way the film industry is trying [and failing] to destroy piracy.

i pirate most of the films i watch but i still see more movies in the theater than my friends and co-workers do. that’s the ugly fact that the industry can’t seem to grasp.

the same can be said for free software and microsoft. one party is doing what it does, and one party firmly believes that it has a financial interest in eliminating the other.

Anonymous Coward says:

Re: piracy is winning

i pirate most of the films i watch

Do you ever go to theaters to watch them again, and if so about what % of time?

If any of the pirated films were not available for download, would you be inclined to go to theaters to watch them for the first time?

Just curious…

chris (profile) says:

Re: Re: Re:2 piracy is winning

hard drives are so cheap, you just have multiples.

i currently have 2 file servers, each with ~2tb of live disk (3 750gb drives striped). nfs + rsync FTW on the server side and samba + xbox media center FTW on the client side.

then i either BT or news group movies or rent, rip and return from netflix.

i have lost things before, and you just go to the net and pull it down again, or get a copy from a friend.

chris (profile) says:

Re: Re: piracy is winning

Do you ever go to theaters to watch them again, and if so about what % of time?

i don’t go to the theater to watch movies, i go to the theater to hang out with my friends or my kids. i pirate video games too, but i still play them in arcades with my friends or with my kids. i pirate music too, but still go to shows.

If any of the pirated films were not available for download, would you be inclined to go to theaters to watch them for the first time?

the availability of films online isn’t what keeps me out of the theater. it’s the price of the film and the risk of the quality of the film. horror movies that aren’t scary are a waste of money. comedies that aren’t funny are doubly so.

if a film is a safe bet (based on a book/comic i/we already like) then it is easy to get friends to go see it. i saw all 3 pirates of the caribbean films in the theater, all 3 spiderman films, all the star wars, all the lord of the rings, etc.

if it’s a solid effort from a proven kid’s franchise, then i feel good about taking the kids to go see it. i’ve seen all the shrek’s with the kids, the toy stories, coraline, etc.

but tickets and everything are too expensive to take a chance on films. if you talk everyone in to seeing a stinker, it undermines your credibility when suggesting future films.

this is self defeating for the film industry. if you want to charge the prices you charge, then the films should be quality, but often, they are not. if you want to grunt out films of questionable quality, then viewing them shouldn’t be financially and socially risky.

Timoris says:

Re: Re:

infact, downloading movies (perhaps even music) Made me discover things I like, which ended up making me buy them.

The reason I do not watch TV is mostly because of the lack of quality content, and commercialism.

Notice how they raise the volume during ads?

Notice how an entire show of Big Bang theory was centered around playing Age of Conan? I’m not going to spend my time and money to watch commercials.

I should be payed for doing so.

Cryix says:

Re: Re: @Timoris

Look, im no fan of commercials either, but lets get one thing straight:

Radio and Television programing *exists* to support advertising, not the other way around. Thats why shows with mass appeal are favored over niche programming, at least on the major networks that broadcast for free.

Paying for a service like cable has twisted people’s perspective on the matter for a long time now.

When you watch a tv program, generally speaking, you’re agreeing to a pact with the network broadcasting it: They’re going to show you something that you might enjoy and in exchange you’re going to watch messages from sponsors.

This might not be a viable strategy for producing television in the future, but that’s how its set up right now.

Timori says:

Re: Re: Re: @Timoris

I understand that. Programs are what exist between commercials, not the other way around.

But when it starts leaking into programs, at the cost of continuety or story, there’s a problem. It’s not making want to watch said program, therefore watching said commercials if I’m not busy muting the tv and reading a book inbetween.

Anonymous Coward says:

Both sides are blowing a bit of hot air on this.

On the industry side, piracy is not destroying the industry. At most it is dinging it a bit at the edges. Every business has some type of problem like this, and it probably isn’t the biggest loss of real revenue for the industry. The industry talks like p2p downloads are the only source of piracy. I suspect that theaters cheating on their ticket counts probably costs them more that anything they actually lose to p2p downloads as does counterfeiting DVD’s.

On the other side, saying “theater attendance is up, so piracy is not an issue” is a bogus argument. DVD sales make up a significant income stream, and if piracy is going to do much damage, that is where it would happen.

The real question is how much do P2P downloading and counterfeiting hurt DVD sales, and how much does each hurt? I think it is also fair to ask how much archaic marketing strategies and regional restrictions hurt sales. I suspect that a lot of piracy happens because people are trying to get around those artificial barriers.

Luci says:

Re: Re:

This article does not reference DVD sales, so your comment is meaningless. The articles that this one references are talking about ticket sales, not DVD sales. If piracy were killing ticket sales, as the industry claims, then they would not have had record attendance numbers.

This isn’t to say that your questions aren’t valid, but they are misplaced.

Ex-Movie watcher says:


ok here’s my deal maybe some can relate , maybe some can’t .

~ Tickets = 10 bucks (4 in my family)
~ Couple drops of water and a few kernels of popcorn = 10 bucks per person (for a small) at hte concession stand

Then I get to go into the theater with a bunch of stupid disrespectful idiots (usually teenagers), who came there to do everything except watch the movie. they talk to the people they came with, txt on their phones and are just generally disruptive to people who are actually trying to watch the movie…. sound like a good investment of your hard earned 80 bucks…. well not for me.. I would much rather set at home on my couch, in front of my 64 inch HDTV hight quality sound with a can of soda and a bag of popcorn (5-10 bucks) total investment and watch the movie and if my kid starts being disruptive I can tell him to shut his trap and not worry about him running his mouth , like his parents didn’t teach him an manners. I would be glad to go to the movies, if it were not such a hassle. If you say something to the people who are being disruptive, you are almost assured a confrontation and if you tell the theater people, they don’t do anything either… I don’t have 80 bucks a shot to waste a few times a month on a movie i can’t remember 5 minutes after I left, cause I could hear most of it.

By the way if some actor has to sell one of his 20 cars or 6 summers homes, or stop there monthy vacations in another country because he is going broke, cause I downloaded his movie, give him my address tell him to stop by, I fix him a sandwich.

I would love to get back to going to the movies. When I was kid, it was a treat to go to the big show on saturday night, it was a treat for us , when my parents could afford it. and we were excited to be there. we didn’t talk or act stupid or disrespect the other adults in the movie place, if we had our dad would have corrected that immediately!

Anonymous Coward says:

Re: piracy

That’s part of the reason I personally hate going to the theaters. There are many problems with it that can make your experience suck.

-First you have to deal with parking. Movie theaters NEVER have adequate parking facilities, especially on high traffic nights.
-Then you have to stand in line to buy tickets, unless you’ve bought them online.
-Then you have to stand in line AGAIN to get overpriced food.
-Meanwhile you give up getting better seats unless you split up your group, which is inconvenient since its a social event. You don’t have a choice if you come alone.
-Then you have to deal with with TV like programming, and that’s before the actual commercials air.

Why don’t the theaters actually serve food restaurant style, and bring you to your seats and make sure there are contiguous seating for your entire party? Once the movie begins, ushers should be on hand to kick out noisy patrons and crying babies and cell phones.

If the theater experience justified the price of admission, I’d go more often.

JL says:

Re: Re: piracy

Anonymous Coward, I couldn’t agree with you more.

If the movie watching experience was better, I, most certainly, would go more often.

I’d like to add to your list the ever increasing “convenience fee” for online ticket purchasing which you almost HAVE to do if you don’t want to get to the theater and realize your movie has been sold out.

I would be thrilled if theatres offered tickets with assigned seating like a live sporting or concert event. At least that way you would be guaranteed your seat and had the option to attend a different screening rather than be have to sit all the way up front angled up towards the screen.

If only…

Brian Hayashi (user link) says:

Movie Economics

Once upon a time people would ask why newspapers were so concerned about fees for online content when they were obviously making so much money, since they were buying each other out, building new headquarters, etc.

Well today newspapers are closing down around the country, TV stations like ABC/CBS/NBC/Fox have been reducing the number of new TV shows produced, and even the movie studios are at risk. Why? The answers aren’t simple, because the media and entertainment business has become so complex in the last 50 years.

First, the guys that make the movies are NOT in the movie theatre business. The studios don’t make money from the popcorn and have nothing to do with the length of the lines. They sell films to the theatres, just as they sell films to companies like Wal-Mart who then resell the DVDs to people like you and me. They are scared s**tless about China (and piracy) because today, its like you sell a single copy into China and *presto* it seems like all 1.4 billion of them have copies, overnight.

Movies depend on ancillary windows – international box office, DVD, etc – in order to bankroll pictures. Some pictures may start off as a complete dog at the box office and make it up later in DVD sales. If you liked the movie “Office Space”, it’s a great example of a movie that was a dog in its initial exhibition but only made money as time went on. Today’s studios take every potential revenue source into consideration when deciding whether or not to make a movie, film a TV series, etc.

Every media business has its ups and downs. Just because people are going to the theatres in droves today doesn’t mean that this situation will always be so. “Free content” is killing off every media business, one at a time. You may not like what you’re getting right now, but if you don’t want to pay for stuff, you’ll like what you get even less.

chris (profile) says:

Re: Movie Economics

Why? The answers aren’t simple, because the media and entertainment business has become so complex in the last 50 years.

ahh, yes, the accounting ninjitsu that makes every production “lose” money regardless of how wildly successful it is:


it’s very true that making billions of dollars doesn’t mean that you are making billions of dollars, since you have all of those “expenses” like the stars and their “percentages”.

Every media business has its ups and downs. Just because people are going to the theatres in droves today doesn’t mean that this situation will always be so. “Free content” is killing off every media business, one at a time. You may not like what you’re getting right now, but if you don’t want to pay for stuff, you’ll like what you get even less.

one of the movies i went to see this summer was the 25th anniversary edition of “war games”. i went with a bunch of my hacker buddies even though we’ve all seen it like 300 times.

also, there was a halflife inspired mini movie that was reportedly made for $500:

i think that the two extremes are proving that there are other clever business people waiting in the wings to take over for the industry when it falls flat.

more movies could be made for a lot less, and distributed for a lot less, and would therefore have to make a lot less and/or appeal to a lot fewer people in order to turn a profit.

also, with less universal appeal, maybe it wouldn’t be effortless to download films like it is right now.

Weird Harold (user link) says:

Box Office isn't the only income stream

Mike, please try to understand that box office is only one revenue stream for a movie, and in many cases not the most profitable. Example, The Dark Knight: 530 million plus of ticket sales (super!) and they sold 3 million copies of the DVD / Blueray in the first week (at $20 a copy, that was another 60 million of sales in week 1). It will continue to sell copies for years to come, in that wonderful long tail pattern, provided that there isn’t a huge competition from pirate sites. It should be noted that many of those sales of DVDs were in fact Blu-ray discs, which would have a significantly higher file size and therefore be less easily downloaded online.

DVD sales direct competitor is piracy. Piracy doesn’t compete directly with box office. So attempting to say “surging box office proves piracy isn’t an issue” is weak tea. It’s a nice try, but weak.

JL says:

Re: Box Office isn't the only income stream

You make a valid point that Blu-Ray Discs are not easily downloadable, and less attractive, as most people don’t have Blu-Ray burners either.

However, you assume that Blu-Ray DVD is the beginning end end medium. It has been mentioned that the introduction of BluRay has actually helped create a boom amongst DVD piracy. Pirates have been able to obtain BluRay DVD players and ripping software. The result is that the discs can be ripped, compressed and subsequently burned on to Standard DVDs resulting in an excellent quality movie. Presumably, this can be distributed online as a high quality DVD rip which could then be as easily downloaded as any other movie.

I do agree that the definition of piracy is much too broad to confine the argument in this article that an increase in ticket sales alone is an indicator of success against piracy. Had it been a record year for theatre attendance AND sales of DVDs (at minimum) the argument would hold more weight.

Lawrence D'Oliveiro says:

Re: Box Office isn't the only income stream

Weird Harold spouted:

“[Dark Knight] will continue to sell copies for years to come … provided that there isn’t a huge competition from pirate sites.”

Funny you should claim that, because it turns out that Dark Knight was the most pirated movie of 2008.

Notice the correlation: more piracy => more sales? How do you explain that?

chris (profile) says:

Re: Re: Box Office isn't the only income stream

Weird Harold spouted:

“[Dark Knight] will continue to sell copies for years to come … provided that there isn’t a huge competition from pirate sites.”

Funny you should claim that, because it turns out that Dark Knight was the most pirated movie of 2008.

hell, i downloaded it like 3 times after i saw it in the theater: i downloaded the cam, the telesync and then the DVD rip.

Weird Harold (user link) says:

JL, the point is this: A blu-ray ripped down to a regular DVD isn’t the blu-ray ‘experience’ of super high quality video. We all have paided out the butt for big screen 1080i 120hz 60 inch screens (in theory) and we want to get a quality video image to work with.

Blu-ray is a desirable format, and 25 – 50gig per disc is behing what most people are willing to download over a P2P network. Instant gratification versus “you’ll get it one day”.

cram says:

“Funny you should claim that, because it turns out that Dark Knight was the most pirated movie of 2008.”

And what percentage of that piracy amounted to lost sales? 0%? 100%? Or somewhere in between? Would you agree that the industry lost out on an opportunity to grab some more of your dollars?

And Dark Knight was the most pirated movie of 2008 because everyone wanted to catch it that year. Will it be the most pirated movie of 2009, 10…2020? No way.

What about future DVD sales, especially worldwide? Pirated DVDs are available for a buck each in the streets of Beijing, Delhi and Bangkok, just to name a few. None of those sales goes back to the company. Is it any wonder the industry is howling about piracy?

You'd like to know says:

It is a flawed system, and we all know it.

I would hazard a guess that the biggest reason that box office hits are pirated is because people want to watch the movie. Wow that was revolutionary.

Actually it is more subtle then that as well, as I would bet that many ‘pirates’ also watch the movies they love in theater, and have a downloaded copy. People don’t want to wait 6 months anymore to own and rewatch movies, or be forced to see it several times in theater (unless they want to see it again and again).

I know some people will never pay to see a movie, or play a game, or listen to music (and in a perfect world they would be heald accountable), but continued sales in all the above industries prove that many are still willing to purchase quality content at a price they see as affordable. If this means waiting for the DVD to hit the 10$ price or picking it up at 30$, it is all just personal values.

I love having my movie collection, 413 titles and growing. Doesn’t mean I won’t go an download the latest hit because I don’t want to wait 6 months after seeing it in theaters. This doesn’t also mean I won’t buy it when it hits shelves, because no respected movie collection is made from burned discs.

bootleg (profile) says:

bootleg movies for sale

If you want full movies still in theaters on dvd hit me up HQ

i download all the movies still in theaters and old movies too all in HQ format i can put em on a blank dvd for you i only charge for my time and the cost of a dvd disc

if you would like to buy the movies hit me up at cs63901@aol.com

why pay $20 per dvd at wal mart when you can pay $7 for one here i can even download wrestling ppvs too same price $7 per dvd that includes the cost of the blank dvd you must pick up the dvds i can ship but it’s easier for me to have you pick em up

just send me the movie titles

NOTE: some movies titles wote beable to be downloaded due to low Q

all movies are bootleg

Greg Graham (user link) says:

Movie piracy vs song piracy

Movie piracy is not affecting ticket sales as people want to see a movie on a giant screen with giant audio quality, something not even the biggest, most expensive home Theatre system can match, excepting the likes of Bill Gates or course. Also, one usually like to see a movie with others, both those seeing the movie along with you but not with you, and with your loves ones and/or friends. They treat the activity as an event, maybe as a ‘night out’, which may also include dinner or drinks at a bar before or after the movie with friends and/or family.

You don’t need anything big or prohibitively expensive or be in the company of others to enjoy music, it’s an activity one does while at home, in a car, while walking etc. This is why piracy is destroying the music industry but not the movie industry.

Ashley says:

My experience....

This is a couple years late, but honestly? I don’t go to the movie theater or buy movies as much as I used to, but I DON’T pirate content either. I have a Netflix. I only watch shows/movies online if they’re old and no longer being sold.

I don’t like many modern movies or television shows, I just don’t. If I hear that a movie was a remarkable masterpiece, I’ll go see it. Otherwise? No. I’ve walked into too many movie theaters in the past, watched the movie, and thought “This is bad, this is so bad. The computer graphics and sound are Phenomenal, but the story is seriously lacking.”

It seems that, in many cases, the graphics have made them lazy writers. Remember when you had to be creative with the story and the set to be a good movie? That is challenging.

Most things have just fallen into a formula, and try to distract you with that fact by throwing a bunch of special effects at you. And now Disney is re-releasing their old movies in theaters because they can’t come up with anything better. I’m beginning to hate Disney and Disney princesses.

But no, I’m not a pirate. I’ve just lost interest. I’ve lost interest in music too, its all becoming stupid dance music bullshit. That kind of music has a place, in clubs, not on my radio. Why should I listen to the radio when I can buy all my MP3s on Amazon?

Technology is changing, netflix, itunes, youtube, and many like them have adapted to the Technology, while there are others who have not, and would blame piracy.

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