Movie Studios Compete with Free, Even in the Hardest of Times

The New York Times reports today that despite the hard times we're all experiencing, box office ticket sales are up 17.5% this year. That's great, it's clear that people need some entertainment right now and there's a lot of engaging and escapist films out right now. But how does this jive with the lobbying efforts by the MPAA to combat online file trading, like the recent push for copyright filtering as part of the stimulus package or last years PRO-IP enforcement bill? The studios' arguments just don't add up, while studio revenues clearly do.

Maybe we don't say it enough: "There's nothing wrong with making money from creativity!" That's arguably what at least part of copyright is about. But the studios keep arguing to law and policy makers that their lost control over their content equals lost revenue. Thus, they need stronger copyright enforcement laws and tighter reigns on every possible use of their works. Yes, works are being used without their owners' permission. But despite some unauthorized users, in a down-economy, the studios are apparently cleaning up at the movie theaters. The same movies may be freely (though illicitly) available online and people may have less money in their pockets to buy movie theater tickets, but the public is still paying the increasing movie ticket prices to see a flick in the theater.

I suppose there are many arguments why movie ticket sales might be up:

  • Those who have unfortunately been laid-off have more free time and are trying to cheer themselves up or escape reality for a while;

  • Jonas Brothers in 3D is a bargain compared to seeing the dynamic trio live in concert;

  • The next generation of baby-boomer parents are taking the persistent advice of friends and hustling to see as many movies as they can before their babies arrive; or

  • Maybe there are just some really compelling movies in the theater.

To maintain their command and control stance before policy makers, the studios may have to make the uncomfortable argument that the number of ticket sales is actually down, and instead revenues are up because theaters are charging more per ticket. If that is the case, I'd argue it still undercuts the studios' policy arguments promoting copyright filtering and increasing their control over uses of their content. Compelling content, low price, and greater availability are the best combatants of illicit file-sharing--not stronger copyright laws. Right Bob Iger?

Heaven forbid that we even raise the argument that a user's first unauthorized sampling of a movie online could possibly entice them to see it in the theater, rent it on VOD, and buy the BluRay, the inevitable collector's edition, and any and all other associated movie and franchise paraphernalia. The more that studios cater to these user demands (which in the last year, they have been with services like ABC.com, CBS's TV.com, Joost, and Hulu.com to name a few), instead of paying lobbyists to fight to maintain the status quo business models, I believe the more revenue they will see flow.

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