If Piracy Is Such A Scourge, Why Are Cinema Profits Soaring?

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It's only been a few weeks since we leaned Village Roadshow donated millions of dollars to Labor and the LNP as new piracy laws were passed. And a few months ago, a number of studios worked together to force additional block on a bunch of piracy-related websites.

If cinema revenues were suffering we might be even be a little sympathetic. But it turns out that's not the case with 2018 a record year at the box office once again.

The Hollywood Reporter says this year's box office, for the US alone is likely to break the 2016 record of $11.4 billion and could hit $12 billion by year's end. Spider-Man: Into the Spider-Verse, Mary Poppins Returns, Aquaman and Bumblebee are likely to finish the year strongly.

Looking a little deeper into the numbers in the US, the story isn't just about increased revenues. The number of tickets fell from last year but ticket prices are up and fewer movies have been released so far this year. But with pre-Christmas releases coming, the numbers should end up fairly even when it comes to the number of movies. The big news is that the studios are pushing ticket prices up thorough premium seating and other extras.

So, while studios are crying poor over piracy, they're jacking up the prices for a night at the movies. According to data from Box Office Mojo the number of movies released has increased from fewer than 500 in the year 2000 and is now closing in on 750 releases. At the same time, the average ticket price has increased from $US5.39 to over $US9.

Movie studios have been fighting against unauthorised distribution of their content since the days of Limewire, before BitTorrent was established as the protocol of choice for distributing large files. But at the same time, revenues have climbed year on year with ticket prices rising. It's little wonder that fewer tickets are being sold.

The other story that's not told in the box office numbers is the revenue studios generate through digital and other media sales after the cinema release. I'm sure Netflix, Stan and others are paying a pretty penny to distribute those movies.


Comments

    I very rarely go to the movies these days. For the price of admission for two, I can buy a blu ray or rent digitally and get a whole bunch of not overpriced food and sit on a reclining couch.

    Exceptions are the really big Marvel movies, mainline Star Wars, Quentin Tarantino and the occasional social outing to something at least decent that friends organise.

    My local cinema dropped their ticket prices to essentially their 'cheap Tuesday' prices every day of the week. Now the cinema is always packed full and they've had to introduce assigned seating to cope.
    People are more than willing to go to the movies if the price is right.

      Exactly. They changed the reward card at my local cinema so it offered cheaper movies (about $9) and I'll happily got to see twice as many movies now. And when I do I inevitably buy their super overpriced popcorn and coke. So ultimately they've making far more money than charging full price for the tickets.

      I still wouldn't bother going to see a more character driven drama at the cinema, I feel like they work just as well at home. But a spectacle movie, like the big super hero flicks and a lot of comedy movies work better in a cinema with a crowd.

    And the studios still fight for region protections to help people stop paying for product. Whoever came up with region-free BluRay players that still enforce DVD regions should be taken out and shot.

    Village Roadshow CEO was screaming about piracy so much, that the mum and pop investors didn't notice that the only revenue stream for his company that was down, was theme parks and entertainment centres (ie arcades). If you cry wolf, no one will notice that the farm crops are dying.

    because the average person has no brains and takes their family to see those realistic disney movie abominations

    I've actually been watching these stats for awhile (yay spreadsheets and boxofficemojo). Some fun stats (if you're the sort of person who likes stats):

    Generally speaking the average take per movie has been dropping. Over 20 years (1996-2017) it declined from 18 million per movie to 15 million pre movie. There have been a couple blips in that decline, like 2009 where it spiked up to 20 million thanks largely to the numbers of releases that year being quite low and a little movie called Avatar.

    Over the same time though the amount of money the top 10 movies have earned has increased dramatically. So there's heavier weighting towards the big blockbusters. The average take for the top 10 has gone from 165 million to 380 million! While inflation does contribute to that, it certainly doesn't account for the fact it's over double.

    Interestingly the grosses and averages over the last 10 years have been pretty consistent. The grosses have "only" grown from 10 billion to 11 billion. Compare that to the previous 10 where they grew from just under 6 billion to just under 10 billion. And apart from the spike in 2009 the average gross over the last ten years has hovered around the 15 million mark.

    So that might indicate that maybe piracy has had some effect, at least initially. However, over the past decade the effect stablised so it's not taking more money from the industry. Of course there are other potential reasons like global financial crisis or just shit movies being released.

    It could also show that because there are far more movies being released there's just more competition for the limited amount of money that viewers have available. the fact the top ten movies are making far more money would imply that people *are* spending money on movies, but because there are more than twice as many movies released people just can't see as many.

    Take 2017 as an example, the lowest movie on the list earned $422. The bottom 10 movies combined earned about $10k. That drives the averages down. In contrast in 1996 the worst movie still earned nearly $2k and the bottom 10 earned about $34k. More movies doesn't necessarily equal more money, but it does mean more movies earn less.

      It's worth noting that the number of movies has also increased significantly in the period you looked at. So, while $/movie is down - isn't it possible that the market is diluting things?

        It possibly is, and yes the number of movies has grown drastically (or at least the number of movies being recorded at Boxofficemojo). I'm thinking of doing some more tinkering with the stats to get more information on the low performers.

        Initially I thought that the volume of movies was causing a cannibalism effect. Like Star Wars stealing sales from Justice League or similar. I suspect though, that while there are a ton of movies being released it's having less effect on the top movies. There may be some cannibalism but the top 10 grosses are quite stable over the last ten years and in fact the top 10 have been steadily increasing in share.

        In contrast the bottom movies, the small releases and indies are earning less. 2018's worst movie (gross wise) is "Realms" and it made $147. I suspect a lot of these movies aren't really competing in the cinemas. They're actually small releases that may only be on one screen in one theatre for one session. It's done purely for tax and grant purposes. There is a requirement to be displayed in a cinema in order to get financial assistance for the production, but there is no stipulation that it needs to be a broad release. So they release it for a day or a week in one cinema then it goes to dvd/streaming.

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