U.S. Losing $20.5 Billion to Movie Pirates

[ozymango]

The point is that people DO spend money on bootlegs and if they did not have this capability then that money would have gone somewhere else. Maybe a stick of gum, maybe into their bank accounts, or maybe towards the purchase of some smaller amount of legitimate DVDs.

This reminds me, I can't remember where I read this and it wasn't about DVD bootlegs per se, but the gist of the article was the nature of free-market price setting and how to figure out the "best" price for something that people want. Fr'instance, you sell DVDs for $29.95 and X people buy them, and X+Y people buy counterfeits. So, through some complex economic model, you somehow "interview" the people who would buy counterfeits and determine that they would buy an actual copy of your movie (or whatever) for, say, $19.95. I'm just throwing out numbers here.

Anyway, so you do some more number crunching and you make Z dollars off every DVD at $29.95 and sell Q amount of DVDs and have R amount counterfeited, but if you sell them at $19.95 you sell Q+K number of DVDs and have R minus T counterfeits because the "value threshold" becomes more appealing for people to purchase said copies, versus buying counterfiets.

Now I know it's a heck of a lot more complicated than that, and I'm not trying to excuse pirates, but at the same time I do think it's smart business to look at all these models and see if there are other ways of making $$$ from your products, even in the face of piracy, by being willing -- and smart enough -- to consider all the perspectives.

Like to an extent how Apple is making money off of iTunes by figuring out how much people are willing to spend for a tune, plus other stuff in the "experience" so as to woo over more paying customers.

[hudsonf]

They asked how much money they physically would have spent on movies if they had not obtained illegal copies instead.

And everyone gave a honest answer? I know piracy is wrong and causes them to lose a lot of money. I just don't agree with the amount they quote.

[solarfox]

On those rare occassions I do go to the theater, I take a jacket and put a cold Coke in one pocket and a Wendy's cheeseburger in the other. No $5.00 candy bars for me.

Hate to tell you this, but you're not taking any money out of Hollywood's pocket by doing that... all you're doing is damaging the theater owner who depends on the profits from the concession stands to keep the doors open, the lights lit, and his employees paid.

(But what about all the money from those high ticket prices, you ask? Guess what -- the theater gets to keep almost none of that, especially during the first few weeks of a major release. The distributors and studios take pretty much all of it -- which is one reason why you see those "no discount coupons or passes accepted" disclaimers attached to so many big-budget blockbusters.)

[BJ_M]

if it was made completely imposable to download mp3s and any sort of bootleg videos off the internet -- 250+ million people would not need high speed internet --- and might switch to a slower service at less cost ...

therefore that could be a loss of billions to the cable companies and bell operators ...

of course in china and other asian countries this is not the case -- nor will anyone be able to sell dvds or software there (for the most part) at full pop ....

[adam]

They asked how much money they physically would have spent on movies if they had not obtained illegal copies instead.

And everyone gave a honest answer? I know piracy is wrong and causes them to lose a lot of money. I just don't agree with the amount they quote.

That's one of the reasons why I don't think opinion type surveys are viable for large geographic studies. But most of the surveys were done semi-anonomously by phone or internet so that counts for a little something. But more importantly, dishonesty in this study would result in lower than actual numbers for losses wouldn't you think? People tend to lie on surveys to hide or mitigate illegal or embarrasing conduct, not brag about it. Even of those people that admit downloading movies and such, how often do you hear people justify it by saying that, "oh I never would have paid for that." All of these types of answers would decrease the estimated losses.

As for the final number they got I just have no opinion as to its reasonableness. I think its impossible to predict something like this no matter how impartial you are.

[painkiller]

While I can't say I'm an expert on surveys per se - I do know that, to effectively do it right - one has to have a large enough sample size (population).

And the model used to extract the answers has to discount the examined sample set for a variety of factors - one of which is certainly - expected unfaithful survey responses.

So, given what we (I) don't know about the manner in which this data was collected (meaning that I am referring to the first article mentioned in the first post of this thread and no one elses), there is no way to know just how far from reality these projections reside.

You know the old saying - figures don't lie, but liars figure.

[Nitemare]

Why can't the theater owners demand better deals from the movie studios if they're taking losses during the first week(s) of a movie's run instead of gouging prices at the concession stand? (I'm a food smuggler too)

If these studios had no place to show their films then they'd make a better deal instead of losing millions. Instead, the theater owners piss of their OWN customer base and we either resort to smuggling food in or NOT GOING.

Regarding the crap coming out of Hollywood ... what are they going to do when they've run out of comic books to adapt?

With only re-makes and recycled TV to offer us, why do they expect us to go to the movies anyway? If you want my money ...EARN IT!

[Rich86]

Let's see - today I had my car repaired for $110 at a local independant (aka NOT the dealer). I did this because the dealer wanted to charge me $400 for the very same repair.
So - this must be a $300 loss by the car manufacturer due to "piracy", right?
By the way - the car is now repaired and functioning just fine.

If there was even the most remote chance that the MPAA (or the RIAA who spreads similar nonsense around to serve their political purposes) actually commissioned and presented results based on objective data gathering or analysis, I might pay attention.

But, as long as these self serving political organizations count everything but the kitchen sink as a lost sale, and use inflated prices of these nonsense lost sales to boot, no one with any sense will believe them.

Of course that does not include various governmental bodies, whose idea of "sense" is spelled "cents" . . and dollars . . and lots of them . . .

[lordsmurf]

what are they going to do when they've run out of comic books to adapt?

American Idol the Movie
Survivor the Movie
Big Brother the Movie
The Amazing Race the Movie
Fox News the Movie

[pchan]

Why not have the UN pass a law... all new born and living human pay $1 for "movies subscription or royalty" per month. That should work out to about $72B per year.

[FulciLives]

Why not have the UN pass a law... all new born and living human pay $1 for "movies subscription or royalty" per month. That should work out to about $72B per year.

Nice idea but the USA tends to ignore the UN but then again they might "abide" by this particular resolution LOL

- John "FulciLives" Coleman

[dvdguy4]

what are they going to do when they've run out of comic books to adapt?

American Idol the Movie
Survivor the Movie
Big Brother the Movie
The Amazing Race the Movie
Fox News the Movie

Thats funny as hell. Just dont give them any ideas.

[SingSing]

what are they going to do when they've run out of comic books to adapt?

American Idol the Movie
Survivor the Movie
Big Brother the Movie
The Amazing Race the Movie
Fox News the Movie

LOL, you are out doing yourself.

[normcar]

If these studios had no place to show their films then they'd make a better deal instead of losing millions. Instead, the theater owners piss of their OWN customer base and we either resort to smuggling food in or NOT GOING.

Regarding the crap coming out of Hollywood ... what are they going to do when they've run out of comic books to adapt?

The studios spend too much money on stupid stuff to keep their "stars" happy. Like huge trailers, food, and other stuff that does not make it on film. They have a problem with their internal costs, and they have to pass it on. Then they blame pirates for not making money. As with most companies that lose money, they need to look at themselves first before blaming everyone else.

As for TV remakes, the funny thing is TV does a better job on a weekly basis than the movie studios with millions to spend on 2 hrs of time. Most remakes of TV are soooo bad, no one wants to see them. Some of them are among the worst movies of all time.

[hudsonf]

what are they going to do when they've run out of comic books to adapt?

American Idol the Movie
Survivor the Movie
Big Brother the Movie
The Amazing Race the Movie
Fox News the Movie

Throw in The Simple Life the Movie and I'm off to the movies.

[Nilfennasion]

They are going entirely the wrong way about combatting the problem. If it even is a problem - especially given the quality of new release films of late, the chances of getting me to pay money to see something sight unseen is a lot less than getting me to pay money to see something that I might have experienced a pirate version of. And I am not alone in thinking that.

Eightball magazine's author once wrote about going by a record store and seeing a CD marked "SALE" and $18.99, his comment being that if $18.99 is the sale price, the regular price must be his soul. For a company that stamps this crap out in the tens of thousands and pays less than a dollar for every individual copy you see in stores, this kind of charge is ludicrous. And before you ask, the amount the stores that aren't merely fronts for the record companies get is around 27% of the price you pay at their counter. By the way, theatres generally get half of the ticket price, the studios do not have the muscle to give them almost nothing.

So in a country like Australia, which used to pay the highest price in the world for prerecorded music, piracy is rampant. With monopolistic stores charging forty or more dollars for the PAL equivalent of something an educated consumer can import from the USA for the same price, maybe less, it is no wonder the local retail market there is a shambles. Which brings me to the point here. If you want potential consumers to buy the legitimate product instead of bootlegs (or pirate it themselves), you have to make the legitimate product competitive with that. This means that studios have to stop charging retailers markups in the thousands of percent, and theatres have to take more responsibility for the ability of patrons to enjoy their product. Which means actually policing the usage of cell phones and other disruptive idiocy, as has already been suggested. Contrary to what Hollywood and other segments of American industry seem to think, the people will not just buy whatever is made. They want a return on their investment that is comparable to their investment. The novelty factor of DVD has worn off, so the price has to come down, simple as that.

[normcar]

Nilfennasion, HaaaHaaaHaaa, you are soooo funny too!

[celtic_druid]

$40+ AUD for a DVD? Newer releases are closer to $30 and you can get a lot of stuff for ~$10. Don't think I have ever paid more than $20 not including box sets.

[Nilfennasion]

I have been to places outside of the capitals (read: where there is no competition on a retail level) where prices start to approach $50. Not surprisingly, piracy is even more rampant in those areas.

[lordsmurf]

I've never seen a $AUD price less than $15-20 range on DVDs. Many approach the $25-35 range. At best, I've seen $7-10 AUD on things you typically see for $1 USD in the USA, in the bargain bins. You guys are getting bent over and screwed. Importing from Australia is expensive. They beat you up on the DVDs, and then you get beat up again on shipping. The last time I bought a movie, it cost around $40 USD to import, shipped. It was a favorite of mine, and it was the only release version in the world that was uncensored. On the other hand, box sets in Australia are much less. Why is it only the single DVDs that are so ridiculously high? Quite a few stores refuse to ship outside Australia too, so I have to use friends as proxies.

[celtic_druid]

I got Heat special ed for $10 AUD. It's listed as $18.99 on Amazon so I don't think I got that bad a deal and that is just one example.

[TBoneit]

I thought I had heard that the movie theatres more or less bid for releases based on what percentage of ticket price the studio gets as well as factors like number & size of screens. Hoping on a sure to be popular movie to make money on the refreshments.

Which would explain why the bargain theatres can charge a lower price by waiting until the movie has been out a while.

[Nelson37]

I thought they basically rented the films at a set price for a set period of time, varying on the popularity of the film.

As for the food, I make no agreement with the theater to eat their other products, and there is no prohibition I have seen against bringing in my own. For that matter, what about diabetics, people who keep kosher, or vegetarian, or organic, or for medical reasons cannot consume popcorn? Or what if you just do not like JuJu B's or whatever they are called? If the theater has constructed their economic model to make their profit on these items, that is their right but they can't force me to eat.

I agree that the multiple distractions which are not prevented by management make going to the theater something that is really not enjoyable anymore, not to mention the rare movie worth paying to see.

Now if I could figure a way to input their projector into my ATI card.....

[Nilfennasion]

First of all, Australia has long been an example of the true effect of remaining silent, or at least not complaining enough, about an uncompetitive market. Whereas in the capitals such as Sydney or Melbourne, one can literally walk to another store in less than a minute (at least in some areas), going from say, Big W to Harvey Norman can take more than half an hour in such parts as I am stuck in lately. They know this, and both the pricing as well as the level of customer service reflects it. As a result, shopping is far less enthusiastic, and sales tend to be lethargic. Which makes one wonder where anyone gets the idea that a monopoly can be efficient.

The rental of films from studios to theatres is part of an archaic business model that dates back to when studios owned theatres. Nowadays, studios and distributors merely print up release prints of the film, ship them to theatres, and they split the proceeds down the middle (this varies according to agreements on certain films). The main reason this model was agreed on after an antitrust trial forced the breakup of studio-theatre economics is because the two parties mainly agreed that their costs to show the films to the public were about equal. Shipping film prints in trucks is just as costly as employing ushers to sweep up a theatre. Part of the reason why some enlightened types are so excited about digital is that an all-digital system will allow cheaper shipping, which will mark the first time in decades that the cost of distributing a film has gone down.

Nelson makes an excellent point about the concession stand. I have diabetes myself, and even though I pay about as much attention to the prescribed diet as I do the manner in which diabetes is portrayed in most films, the fact is that bringing my own food still gives me a level of control that I may in fact need in order to stay healthy. An interesting thing happens to the human brain when it is receiving less glucose than it needs for long enough. Namely, in extreme cases, it dies. My brain consumes glucose at variable speeds that can get much faster than those that even other diabetics experience, for reasons that are too complex to get into here, but the end result is that when I go anywhere with a bag of Skittles in my backpack, it is because I could really need them at any time. And being that I have monetary problems aplenty to boot, paying exorbitant prices for smaller portions can also put my health at risk.

I just bought two DVDs for a relative as a birthday present. One, a new release of Stripes, was on fire sale at ten dollars. It was being used as a loss leader. I also bought The Transporter at twenty-five that day. But the new releases of the Star Wars trilogy, in which the transfers of the versions people actually want to see aren't even 16:9 enhanced, were selling at forty-three dollars per film. When I watch a DVD that has a 4:3 transfer and is selling at forty-three dollars, I am not paying for it. Especially since by the time I am George Lucas' present age, the only place one will even be able to look at 4:3 televisions will be junk shops or museums. Since he is treating his established customer base so disrespectfully, my feeling is that you can bootleg Lucas without the slightest twinge of guilt.

[classfour]

I only take the family to the movie theater for exceptional showings (in short - the films my son bugs me to insanity until I agree to see), and usually have an okay time. I'd rather watch at home, where I can kick back, stop the movie when I want to get a snack or whatever, and can control the volume. Most of the theaters blast you out, and the peripheral annoyances (cell phones, people talking, people getting up, etc.) detract from the experience.

Since I now own nearly all of the movies to date that I want to watch (about 600 or so), and have paid full retail for many (before they hit th $5 bin at WalMart), I feel Hollywood has taken their fair share of my money.

That said, I wish they'd quit their whining about their losses; come to terms with the Chinese government (good luck!), and start producing movies that are worth watching.

Since you can't believe the trailers they put out, I usually wait until the movie is out for rental; rent it, watch it - and, if it's worth buying: Buy It.

Based on that thinking, I rarely buy more than a few DVDs a month anymore, most are older movies of "known" quality.

I do know that I've rented a few stinkers lately that were hyped as being great. These will not be added to my collection.

[Nilfennasion]

I like a good stinker. BloodRayne was so utterly funny by accident that I could not help but add it to my collection of "films you need to be bent to really enjoy". Hollywood's current habit of spending hundreds of millions of dollars to make, distribute, and publicise films is partly responsible for the preponderance of films that are neither good enough to be good nor bad enough to be funny. Everything has to be safe, calculated, and most importantly, boring. That is why I thank the fates when a director like Courtney Solomon comes around. Solomon can make the death of a major character either funny or the object of celebration. ("Snaaaaaaails!")

That said, some truly awesome films come out from time to time in the modern system. Fight Club is my favourite example, closely followed by The Squid And The Whale or Bad Santa. Not coincidentally, these are the times when Hollywood throws away its graphs and tin ears, and really tries to give more than just four year olds something to be entertained by. I wish they would learn their lesson from the fact that RoboCop grossed more than six times its production budget in theatrical release alone.

Are they seriously thinking of prosecuting me for not watching drivel like Fantastic Four or X-Men 3 in theatres? I've got news for them - they would have a fight on their hands if they think they can hold a gun to my head and force me to defray the costs of making that kind of drivel. X-Men 3 in particular is insulting to me for the exact same reasons I was doing backflips and cheering during parts of X-Men 2 (not literally, but you get the idea). I feel compelled to bootleg X-Men 3 because of who/what I am, that is how badly the reverse King Midas touch Brett Ratner brought to the film stuffed it all up. Perhaps they should take a look at the films made in Europe and England, and take special note of the fact that many of them are intended for adult audiences. Some of the most adult-oriented films from there (Turks Fruit, Trainspotting, and so forth) are also the most successful.

I never like to pay for things I haven't already seen first. Hollywood has nobody to blame but its own bosses for that. They want to know who to blame for losing whateverfigurewewanttopulloutofourbutt a year? Give them a mirror.

[ViRaL1]

When they calculate these numbers, are they also factoring in the GAINS?

DVD / CD burners?
Blank Media?
Jewel / DVD Cases?
Printer Consumables for Inserts?
CD Labels?

At least THESE are tangible.

[adam]

When they calculate these numbers, are they also factoring in the GAINS?

DVD / CD burners?
Blank Media?
Jewel / DVD Cases?
Printer Consumables for Inserts?
CD Labels?

At least THESE are tangible.

Yes. The losses to US economy were calculated using the RIMS II model which does take into consideration both losses and gains of related industries. The model was developed, and is maintained, by the US Government.

[normcar]

Yes. The losses to US economy were calculated using the RIMS II model which does take into consideration both losses and gains of related industries. The model was developed, and is maintained, by the US Government.

And we know if the US Gov created the model, it must be right on, so now I believe the 20.5 billion number is absolutely correct.

HaHaHa, Sorry I couldn't type that with a straight face.

[adam]

I didn't mention the fact that the model is administered by the US government to suggest that it is perfectly accurate, I did so to point out that it is the same model and criteria that all statistical studies of this type must use.