Hollywood Keeps Breaking Box Office Records... While Still Insisting That The Internet Is Killing Movies

from the because-if-the-story-sounds-good,-why-bother-with-the-facts dept

Hollywood is still 100% focused on trying to blame the internet for any of its woes, mostly with bogus attacks on internet companies it doesn't like. And yet... it seems to keep on setting box office records. The latest is that Universal Pictures has broken a new record in bringing in $2 billion in box office revenue faster than any other studio in history, pushed over the top by the successful opening weekend of "Straight Outta Compton" (a movie that seems to have some big fans in Silicon Valley).
Thanks to the overperformance of N.W.A biopic “Straight Outta Compton,” Universal Pictures is tracking to cross the $2 billion mark at the domestic box office on Saturday, setting a new speed record in doing so.

Universal’s historic climb will break Warner Bros.’ previous record of reaching $2 billion by December 25, 2009. The studio is also extremely likely to break the record for all-time domestic box office high, which was set by WB in 2009 with $2.1 billion.
That does not sound like an industry that is having a problem getting people into the theaters, even if the movies are available via infringement. But, people will argue, these services are actually harming the "home video" revenue stream. But that's questionable as well. First off, it was Hollywood that angrily fought against ever allowing a home video market in the first place (remember that?). And, more to the point, we've seen over and over again that when the industry actually adapts and offers content in a reasonable format at a reasonable fee, people will pay at home, just like they do in theaters.

But, of course, due to continued Hollywood confusion and jealousy, it's still holding back lots of movies from Netflix streaming -- one successful service that has shown that it's totally possible to "compete" with infringing content.

So, again, it's confusing as to what Hollywood's real complaint is. It's shown that if it makes good films, people will go out to the theaters to see them, rather than just watch them online. And if it offers them in a reasonable manner for a reasonable price online, people will pay for that as well. And yet, it doesn't do a very good job of this and then blames the internet for its own failures to adapt. Seems like a weird strategy. If I were an investor in those companies, I'd wonder why they've spent the better part of two decades so focused on "stopping piracy" rather than doing a better job delivering what the public wants.

Filed Under: adapting, box office, business models, hollywood, internet, movies, records
Companies: netflix, universal pictures


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  1. icon
    Seegras (profile), 19 Aug 2015 @ 4:58am

    Damage calculations

    Now to calculate damages correctly, we can apply several models.

    Suppose somebody has put a song illegally onto the internet, and some other people might have downloaded it.

    a) We calculate damages from the actual amount of people who downloaded it, and multiply it with the sales price. Yes, the people who had downloaded it might also put it onto the internet illegally, but then these people violate copyright, and not that somebody that put it initially there. So these need to be sued separately. This has a further problem that it's very hard to quantify if using peer2peer technology, but we could divide the outgoing peer2peer traffic of the file by the size of it, and get a number. Probably something like 20, multiplied by $1.

    b) We deem the first person to put it up illegally to be responsible for all the infringement that might arise further down. Since we don't sue everyone else, we don't have any numbers who might have re-published it, and whether they've even republished it. With peer2peer, we can at least assume they've republished it illegally. So we could take the above figure and assume that everyone republished it 20 times. So this would end up at something around $400 for the above example. Now, since bandwidth is finite, sharing multiple songs and other materials would probably lead to smaller amounts of the work being sent out illegally, so a whole album might be sent out only 5 times at all, so this still wouldn't amount to a lot, maybe 5x5x$12 = $300 for the above example.


    Obviously, it's rather difficult to even get exact traffic stats, and they also could be inflated artificially by the rights holder himself, this is probably not the right way to do it.

    We could instead base the whole damages upon something else:

    c) The amount of people that could have bought the song, if it hadn't been made available illegally. As it happens, the number is 0. Because those people spent their money somewhere else in the economy: The bought coffee, computer games, went to the movies, etc. So that's not really a good number, and we can't discern people who didn't buy the song but a cup of coffee instead, from the people who didn't buy it because they bought a weeks food instead.

    d) The amount of people who would have bought it, if it hadn't been made available illegally. This is more interesting, but also hard to figure out. Obviously all fans would have bought it. You might get a ballpark figure of how many there are from homepages, social media and concerts. But it will probably be lower than the amount of songs already sold. You might use past sales, but then, you already have illegal copies in there, so these will be less than the possible amount. Probably the only way to find out is a survey and do statistics. Just ask a random set of people, worldwide, and ask them if they already bought, or would buy the song for $1. Which would be a huge effort.

    But there still might be another way: Statistics on economy and spending.

    e) Since the money not spent on paying for the song, the money was spent on something else. That "something else" is totally uninteresting if it's food or housing or other necessities. It's only interesting if money was spent on entertainment, and the amount happens to be known for a lot of countries. From this we can actually figure out the percentages for the different kinds of entertainment (in the US it's around $1000 a year for audio, but including equipment), so we need the number spent for audio recordings alone. If we divide that number by the average total amount of audio recordings acquired within a year (from sources published legally and illegaly both, as well as free/open content/commons/public domain; probably needs a survey), this will give us a price somebody will actually pay for a song. (And now I've gotten lost on the damages part, but that price is in itself interesting, because it's the price you want to sell your songs at).
    Ah yes, we need to know what percentage of the population, on average, has a certain song. This will be rather low. Multiply that with the population times the price somebody will pay, you've got your damages.

    Needed for (e) are surveys on the amount of songs acquired in a year, on average; and on the chance a song has to be among them, on average. But this actually sounds doable, at least in certain countries.

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