Once Again, Piracy Is Destroying The Movie Industry… To Ever More Records At The Box Office

from the because-of-course dept

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.

Recent numbers show that the movie industry just broke the magic $11 billion barrier, generating more revenue than ever before at the North American box office. The revenue for 2015 totals $11.3 billion, which is roughly a 9% change compared to last year.

The worldwide grosses also reached an all-time record according to research from Rentrak, which estimates the global grosses at a staggering $38 billion based on data from 25,000 theaters across the globe.

Of course, sometimes people argue back that this is only because tickets are more expensive and that fewer people are actually buying tickets to go to the theater. About that…

Another sign that business is going well, at least for some, is the increase in the number of tickets that were sold. In 2015 theaters increased their ticket sales by more than 5% in North America.

I imagine that some will respond that this was really only because of the desire to see the new Star Wars flick, but isn’t that simply proof that if you deliver what the public wants, they’ll pay to go to the theater?

The other response, then, is that the real problem is that the home video market has declined. Sure, but that’s the same home video market that Hollywood tried desperately to kill, so I’m not sure that’s a legitimate argument if you’re defending Hollywood.

But, even if we accept the question of the home video market, I’ll just point out that, last I checked, Netflix had a valuation over $45 billion. So, at least Wall Street doesn’t seem to be too up in arms about the state of the “home video” market.

Of course, every time we post this kind of thing, we’re left asking if Hollywood will finally recognize that, maybe, just maybe, piracy isn’t the issue they should be focused on. And it never happens. However, let’s be optimistic this year and hope that maybe Hollywood will finally come around to realize that the thing it’s been saying will kill it hasn’t done anything of the sort.

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Comments on “Once Again, Piracy Is Destroying The Movie Industry… To Ever More Records At The Box Office”

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Mason Wheeler (profile) says:

I imagine that some will respond that this was really only because of the desire to see the new Star Wars flick, but isn’t that simply proof that if you deliver what the public wants, they’ll pay to go to the theater?

Perhaps, but that’s not the point of that response. The Force Awakens is a statistical outlier big enough to skew overall aggregate calculations that include it. Remove it from the numbers and what does the rest of the year look like?

Anonymous Coward says:

Re: Re:

Perhaps, but that’s not the point of that response. The Force Awakens is a statistical outlier big enough to skew overall aggregate calculations that include it. Remove it from the numbers and what does the rest of the year look like?

Better, probably. I’m sure that movie will be immensely unprofitable, like Return of the Jedi.

HollywoodElite says:

Re: Re:

Shall we go back and remove Avatar from its year and Titanic from its year, too? Star Wars isn’t a statistical anomaly, it’s a part of the overall data just as much as any given box office bomb was. You include all the data to get a clearer picture. You don’t cherry pick all the ‘middle’ data to just suit an argument.

PaulT (profile) says:

Re: Re:

Quick estimate using the figures here:

http://www.boxofficemojo.com/yearly/chart/?yr=2015&p=.htm

States that the total box office would be $9.805 billion. The figures are skewed as that site shows movies in the year they were released (meaning that it includes Star Wars revenue from 2016 but not 2015 revenue from The Hobbit: Battle Of The Five Armies or American Sniper, for example).

Now, that seems to place the box office lower than any year since 2008. But, if you apply the same logic to all other years where there was an “outlier”, it goes back to the same sort of position (e.g. Avatar in 2009 would remove $750 million from 2009’s box office, making 2015’s adjusted result still beat it easily).

Every year has “outliers”, the only reason to remove them would be to skew the average lower, which misses the entire point – for all the whining about piracy, people are willing to go to the cinema for the right product. People wanted to see the new Star Wars, yes, but much of its success is due to the fact that they made a good movie. That revenue isn’t merely from people going to see the new film, it’s from people seeing it multiple times, even though pirated copies are out there for nothing. People aren’t doing that for a bad movie, and it can be argued that a lot of the piracy is also merely people who cannot afford to pay multiple times waiting out the DVD release.

Anonymous Coward says:

I suspect the home video market is declining because Netflix and other streaming sites have reached a level of quality to be a viable alternative. If people always have a movie or TV series available via their streaming subscription, they have less incentive to purchase DVDs and clutter up their house or apartment with something only occasionally watched.

Anonymous Coward says:

“The other response, then, is that the real problem is that the home video market has declined. Sure, but that’s the same home video market that Hollywood tried desperately to kill, so I’m not sure that’s a legitimate argument if you’re defending Hollywood.”

And if Hollywood did manage to kill off the home video market then Hollywood will never be shouting that piracy is costing them millions in lost revenue from the home video market because there wouldn’t be any home video market at all due to Hollywood killing it off in the first place.

David says:

Re: Re: Re:

It’s much worse than that. The Netflix valuation over $45 billion indicates a market potential of $45 billion of ticket sales along with $30 billion of popcorn sales that could have been acquired at a cost of about $80 million (if that much) on the world markets without needing Hollywood accounting acrobatics for denying percentages to movie actors etc, suitable for bribing enough politicians for prolonging copyrights another 50 years, worth hundreds of billions. More if they invest the surplus in private prison capacities for copyright infringers escaping the death penalty.

Anonymous Coward says:

Big corporations have to claim piracy is widespread
in order to pass more laws to shut down websites ,block
websites and reduce the rights of internet users as in the
TTP trade agreement,
Netflix proves that people will pay for a service if its priced at a reasonable rate .
There,s a much wider range of programs and films avaidable from netflix or other streaming service,s than could be found in any video rental store .
People always buy dvds, bluerays from amazon and other websites , so of course the rental dvd market is declining .
Even the music industry has moved on,
by working with more music streaming service,s
as they know many people have switched to streaming
rather than buying cd,s or buying music from the itunes store .

Anonymous Coward says:

Of course Star Wars broke box office records, it wasn’t on pirate sites. People had to go to the theater.

Netflix was going down the drain until they switched gears and started producing original content, instead of just showing other people’s works.

Content and its creators are King. And that’s the way it should be.

PaulT (profile) says:

Re: Re:

“Of course Star Wars broke box office records, it wasn’t on pirate sites. “

Bullshit, there were pirate copies available in several languages within a weak, despite a huge amount of effort being spent by Disney on “protecting” it.

Why you people lie so much when a 2 second Google search shows how much full of crap you are is beyond me.

“Netflix was going down the drain until they switched gears and started producing original content”

Citation? Unless you are actually allergic to facts, of course.

“Content and its creators are King”

Content means nothing if you fail at the presentation, distribution, marketing and pricing aspects. If nobody sees it, it doesn’t matter how good the film is. This attitude is why Netflix have prospered – they actually succeeded at the distribution, while others were too busy working out how to best restrict their own customers.

Ninja (profile) says:

Re: Re:

Of course Star Wars broke box office records, it wasn’t on pirate sites. People had to go to the theater.

Hmmm, no? I went to the cinema after the movie was highly recommended by friends. And it is quite well made. And PaulT is right, there are plenty of available copies online. Pirates don’t mind waiting a week or two.

Netflix was going down the drain

Stop. Netflix has been getting bigger and bigger ever since they started delivering what people want. First it was DVDs at home without having to bother with going to the local video rental store then by delivering direct streaming to our homes. As a matter of fact, people have been asking for this kind of delivery model for a while, before Netflix. The fact that Netflix is investing in their own content is because the MAFIAA is a bunch of greedy assholes and are using copyright to restrict access to Netflix while giving their own shitty services a nice discount. Pandora would have a thing or two to teach you about this sort of assfuckery.

Content and its creators are King. And that’s the way it should be.

Actually you can have the best content in the world but it means nothing if nobody is seeing it. Youtube is hugely successful because it’s a major channel to user generated content. Netflix is a huge success because it delivers content in a quite simple and available way. The MAFIAA titles are successful because of all the marketing and advertisement around there. They know it and they can even make money from total shit if they invest enough in advertising it.

DeathWoks (profile) says:

Laws and Influence....

The intent of copyright has been perverted.
We need a reset, all previous law, abolished and thrown out and a new basic 20 year copyright law passed.

You have 20 years from creation to make your money, no inherited rights to works – only value on current contacts entered into before the death of the creator!

After 20 years, everything becomes public domain – you want to make a new copyright start – edit it, remix – NEW!!

Music, movies, books – Oh and keep large corporations out of legislatures. We are in the mess we are in because big money has waxed the ears of politicians to much. Causing them to ignore the cries of those who know better and the public.

Then again, any government created and run by men, when a small number control a large group with legislation – unfairness will prevail. We just have to try and minimize the number of victims. That though is not currently happening at all – Hollywood is playing a victim – but what do you expect they are good at acting!!

David says:

Re: Laws and Influence....

You have 20 years from creation to make your money, no inherited rights to works – only value on current contacts entered into before the death of the creator!

Disagree. Even old/sick creators should be able to negotiate for 20 years of publishing rights or they will get turned down in favor of the young even when having to offer more.

That way each party knows exactly what it is bargaining for. Someone who sold the rights to some work in 1965 would have had no idea that he was selling the proceeds for 95 years or whatever. He is being robbed of his posthumous fame, sinking into oblivion while people dying a few years before him are becoming household names due to their works’ public domain status.

Andy says:

Re: Laws and Influence....

With the ability to distribute being absolutely zero cost and everyone in the world having access if the infrastructure is there, i believe if they cannot make decent profits from content within 3 years of its release they should not be allowed to have copyright to that content. Damn i would even go so far as to say that any video should lose all copyright after 2 years of being available on any platform.

Gezzer says:

Priacy and Hollywood

It’s really simple.

No matter how much they scream that piracy is hurting the bottom line, it’s not about the bottom line, it’s about control. If eliminating piracy even cost the content providers money they’d still be trying to eliminate it.

Because some country that is slated to have the content be available at a certain chosen time get’s it two months before it’s supposed due to piracy they lose their shit. If people use proxies to access another countries Netflix content they again lose their shit. It’s the common dog in a manger attitude that greedy people have.

Even if in truth piracy doesn’t hurt their bottom line and in fact helps promote movies they don’t care. All they care about is it’s their movie/s and they don’t want you to have it except through approved channels, which in the end they can manipulate to squeeze more money from the consumer.

crade (profile) says:

Re: Priacy and Hollywood

It’s not about control, it’s about legislative capture. It’s about money for nothing. Notice for all the raving they do about piracy, the laws they buy are never actually to fight piracy, they are to give them longer copyrights, more things that copyright covers, less freedom for people to reuse content they already bought, etc. Piracy doesn’t just “not hurt their bottom line”, it’s the golden goose.

orangenine says:

A great example of why people are pirating is content delivery, netflix is easy and convenient so it makes a bunch of money.

The reason people pirate movies is usually easier to download and watch it then go and buy a dvd/wait for shipping.
Even buying bootleg copy’s is easier then going to the movie theater sometimes because you are minding your own business and someone sells you the movie for a cheap price.

Sometimes people like the movie enough to download it and already viewed it in theaters, it’s a lost dvd sale but isn’t as bad as people think.

Jack says:

Well, there is actually quite a simple solution...

You now, with 3D printing, the “piracy” could be ended easily, actually… there could be a legal channel where EVERYTHING that is “media”, from games to any book or everything that is “information” is provided for FREE, fully free, BUT, it works kind of like a bitcoin mining server, for every person watching a stream or downloading a game, or even playing the game a cloud gaming service, a kind of “cryptocoin” is generated for the creators and detentors of royalties. This coin can be bought for money from a kind of mega-internet store that can also be bought by “media coins” that the users also get for watching and they can use to buy 3D printed merchandise from a show, like a 3D printed shirt (it’s possible to print cloth) or other kind of 3D printing for toys, miniatures or replicas of anything from the show, coins that can also be purchased or sold back by users, so people can start their own channel and receive media coins. That way you create a market of production of media where the watcher can possibly make a bit of money by watching enough which he can use to buy a certain object, clothing or miniature from the show or exchange for money. If you have your own channel or produce your own show, you also get your share for being a creator of content. No one will have the need to pirate content because every content will actually be for free, but people will receive a cryptocoin they can use to by goods of the story or exchange for money even for being a viewer, but in really small amounts (depending on how strong is your machine)… You get your money because people watched and receive more later when they purchase goods of your show, any goods will be produced by a company that gets their share of profit from selling the coin back to the bank just as any coin of a country would.
While people watch or play they are mining for the contents creator profit, or if someone uses your footage for their own content, part of the profits in criptocoins are also directed to you, so channels get their share for divulging your content but you also get a slice of it (y)

Play enough of a game with twitch on and enough viewers, you can pay for something to eat and twitch also got a small amount because you, used its server, but it gets from every user every day so it’s actually a pretty huge amount when combined.
You watching expending time in a website will generate a small amount to the owner and to you…

I tried to get in contact with a few companies because of this, already, but none of them gave a return, but it really solves the problem…

klaus (profile) says:

“…a staggering $38 billion…”

It’s worth clarifying that that figure reflects just gross sales. Taken as a whole, the global industry takes even greater revenue.
http://www.statista.com/statistics/259985/global-filmed-entertainment-revenue/

I have dim recollections from “The Tech Wars” in the nineties, when Hollywood was trying to strong-arm hardware makers into accepting more and more crap like DVD regionalization, someone somewhere made the observation that Hollywood brought $38B to the US economy, whereas Silicon Valley brought $600B. Hollywood lost the argument.

Sorry, I can’t recall where I read that…

AC720 (profile) says:

Hollywood Accounting

Look, this is coming from the businesses that use their Hollywood Account to make every film and TV show look like it loses money. Everything loses money. The studios are always almost bankrupt.

Somehow Disney WILL find a way to declare the new Star Wars film a total loss and a failure even as it brings in $2bn even before home video is counted or revenue from any of the co-branded crap that came with it. It’s going to lose way more than it earns. They’ll make it happen.

So of course they see piracy as a loss area. Every damn thing is a loss area. Sure they lost millions of dollars on stolen copies of the Star Wars Christmas Special on DVD, which then never actually made and nobody ever pirated. But if they HAD made those DVDs, they’d have lost money on it, so claim a loss against something that never existed but would have been pirated or lost money if it had existed.

Hollywood accounting IS that full of bullshit. Just wait and watch as Disney simultaneously talks up Lucasfilm results to their shareholders AND declares the whole thing and the movie as terrible, awful, no good lousy losses.

Whatever (profile) says:

The question that remains out there, unanswered, is what would the box office be like without piracy? How many people choose the comfort of home over the theater experience?

Inflation adjusted, when you compare 2002 (a particularly up year) to 2015, the box office should have been 12 billion. ticket sales are way down from those peak levels (1.5 billion tickets in 2002, only 1.3 billion in 2015) which means once again, the gross is helped by higher ticket prices and not public demand. From 2012 to 2015, public demand is down 15% or so, even with a billion more people on the planet. It’s nowhere near as rosy as you might want to paint it.

So yeah, the numbers are pretty good, but to have a declining numbers of customers in a marketplace that grows nearly 2% a year is not a good thing.

PaulT (profile) says:

Re: Re:

“The question that remains out there, unanswered, is what would the box office be like without piracy?”

It’s unanswered because it’s impossible to answer with any accuracy, no matter which “side” you’re on. If anyone claims to know, they’re a liar.

Would some people go to the cinema instead of pirating? Maybe. But, other people who pirated have already watched the movie at the cinema and are downloading because the legal Blu isn’t available yet, or for smaller films because the title they want to watch is literally not showing anywhere near them since the distribution model is so biased toward large cities and studio tentpoles. Removing piracy, even if this were objectively and realistically possible, may not change these figures at all.

The point is – I don’t know and neither do you, but you seem to only blame one thing at the exclusion of all other factors.

“Inflation adjusted, when you compare 2002 (a particularly up year) to 2015, the box office should have been 12 billion.”

“Should have?” By which standards? If you’re assuming a steady number of customers, you’re missing a huge recession and huge growth in competing entertainment options over that timescale, just to mention 2 factors that have nothing to do with piracy, but which affect the market fundamentally. The figures you’re concerned about might have as much to do with unemployed people or new parents choosing a videogame or Netflix over their previous cinema visits as anything else.

Given that, the industry looks very healthy, especially as some of the highest grossing movies of all time have been released in that period (and Star Wars is already the 15th domestically highest grossing film of all time – after just 24 days of release – it will end up in the top 10, guaranteed).

But, yeah, it’s you so the nearest convenient fantasy is preferable to the complexities of reality, as long as it adheres to your predetermined conclusions.

“It’s nowhere near as rosy as you might want to paint it.”

Nor is it anywhere near as bleak as the people you relentlessly support wish to paint it.

” From 2012 to 2015, public demand is down 15% or so, even with a billion more people on the planet.”

There was a billion more people in what period? 2012 – 2015? Ridiculous. 2002 – 2015? I’d like to see your cited numbers, especially since some markets such as China and India were nowhere near as well serviced in 2002 as they are now. Plus, if you are addressing those countries, I find it notable that you don’t include their homegrown movie industries in the figures you’re looking at. I wonder why that would be? Would those industries be making enough money locally to offset the “losses” experienced by Hollywood, by any chance?

Funny how you count “the planet” for some figures yet only domestic US figures for others. Seems… inconsistent, if not outright dishonest to me. If you’re talking about “losses” for the movie market and including the Chinese population in that equation (for example), it seems intellectually dishonest to exclude the Chinese industry and only talk about the American one…

filmmaker6 (profile) says:

If half the people who ate food simply walked into a supermarket and took the food, then the supermarket wold make less money. If doesn’t matter if the supermarket still makes money – the fact is that they make less money, and so do the farmers, and the food distributors. You guys are like people who walk into a market and take food, but you call yourselves “borrowers” of the food and not stealers. But you are selfish thieves and you are stealing and there is no way of putting that nicely.

MrTroy (profile) says:

If half the people who ate food simply walked into their back yard and grew their own food, then the supermarket would make less money. It doesn’t matter if the supermarket still makes money – the fact is that they make less money, and so do the farmers, and the food distributors. You guys are like people who walk into a market and take food, but the food is technically still on the shelves and available to be bought by anyone else who is willing to pay what the supermarket is asking. But you are selfish thieves because you’re not giving the supermarket any money. And don’t even get me started on people who cook their own food rather than eating at restaurants…

Terrible analogy, but subjectively not any worse than yours.

But your conclusion is based on a faulty premise. Not only is a pirated copy not equivalent to a lost sale, but study after study[1][2][3][4][5] has found that pirates spend more on entertainment content than non-pirates. Why hate your biggest customers?

[1] https://www.techdirt.com/articles/20150722/06502731723/aussie-study-infringers-spend-more-content-than-non-infringers.shtml
[2] https://www.techdirt.com/articles/20110727/16233815292/another-day-another-study-that-says-pirates-are-best-customers-this-time-hadopi.shtml
[3] https://www.techdirt.com/articles/20130513/11270823061/once-again-top-downloaders-are-top-spenders-according-to-uk-govt-study.shtml
[4] https://www.techdirt.com/articles/20110721/04092915191/industry-suppressed-report-showing-users-shuttered-pirate-site-probably-helped-movie-industry.shtml
[5] https://www.techdirt.com/articles/20121126/00590921141/dear-riaa-pirates-buy-more-full-stop-deal-with-it.shtml

MrTroy (profile) says:

Re: Re:

The first paragraph of the article:

Expendables 3 may not have won over critics but producer Avi Lerner is convinced that is not why the movie starring Sylvester Stallone and a dozen other stars underperformed at the box office — and he is still angry about what happened.

Translated: Yes, my movie was bad, but people go to see bad movies all the time, so why not mine? I had stars!

Other movies that were leaked prior to cinema release:

* Star Wars: The Force Awakens (http://www.idigitaltimes.com/star-wars-force-awakens-leaked-piracy-sites-hardly-made-dent-record-weekend-box-499111)
* The Revenant (http://www.boxofficemojo.com/news/?id=4143&p=.htm)
* Hateful Eight (http://www.hollywoodreporter.com/news/box-office-hateful-eight-70mm-853090)

So the real story is… people pay to see movies they like?

w. russell says:

Hollywood's loss of ticket sales. Boo Hoo.

I would just like to point out that the powers that be in Hollywood are missing something. They assume that every pirated movie is a lost ticket purchase. There are many many people that for whatever reason go to movies in the theater very rarely. If they cannot pirate a movie, they will just not see it. I am one of those people. I work odd hours for little pay. Unless the movie is on netflix or is owned by someone I know, I do not see movies in the theater. I also do not own a tv. Sometimes, seeing a movie by one of these means makes me want to see a sequel in the theater.

Also, going to a theater and seeing the movie at home are two entirely different experiences. I think that many people would see a movie more than once if the group they hang with wanted to make a night of it and see it in the theater, especially if they didn’t have to pay to see it the first time.

Jan says:

Record breaking years for movies?

As a teen through 30 something I spent every weekend at the movies and sometimes even saw 2 or 3. As a 40 plus seeing movie tickets at over $15 has left me at home watching stuff on line. I might go to a movie once a month or so if I can see a discount matinee but I’m hesitant to spend that kind of money on the movies. If there were no internet options I still wouldn’t spend that much on the movies. The local library and most of my friends have extensive DVD and Blu-ray collections so why waste so much money going out to movies?

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