Film studios ... not dead yet.

A few years ago I ran a series of posts (starting with this one) questioning a 60 Minutes piece on online video piracy.  My take was that 60 Minutes was parroting the MPAA's stand on piracy at the time without critically examining it as one might expect from an investigative news program.

I stand by that.

In one segment, director Steven Soderbergh doubted whether films like The Matrix could be made any more, since piracy was putting the studios out of business and keeping them from financing original works from outsiders.  At the time of that interview, Avatar was on its way to grossing an all-time record 2.8 billion dollars on a budget of $237 million.  Granted, James Cameron is not exactly a hollywood outsider (more on that below), but if the studios aren't financing new faces, it doesn't appear to be for lack of money.  Six of the top ten highest-grossing films have been made since that interview, and ten of the top twenty.   Comcast (owners of Universal) has nearly tripled its stock price.  Disney, Time-Warner and Viacom (owner of Paramount) have approximately doubled.

Overal box-office grosses have been basically flat since that interview, which would indeed be bad news for studios, if that were the only way that they made money.  But it isn't.  Video on demand and DVD/Blu-ray releases, with much lower overhead than the box office, have been a standard part of movie releases since before that interview was done.

Home video numbers seem harder to come by than box office grosses, but there's no doubt that, however much illegal copying may be going on, there's plenty of legal rental going on as well.  It doesn't look like the ability to copy bits online is hurting the film industry any more than the ability to copy them on videotape did.

In fact, the folks at South by Southwest seem to think that video on demand is actually helping get original films from outsiders made and seen.  The title of the panel, How I Learned To Stop Worrying and Love VOD, is itself instructive.

Nor do I think anyone seriously sees this as a triumph of the brave heroes at the MPAA against the evil pirates.  Rather, the industry has adjusted to the new technology and figured out how to make money off of it.  Which is their job.