Posted on 10/21/2009 10:44:28 AM PDT by ShadowAce
To: Charlize Theron, Hugh Jackman, Seth Rogen, Tina Fey, Steven Spielberg, Michael Mann, every actor, actress, screenwriter, costumer, best boy, cameraman, set designer, makeup artist, and agent--plus anyone else who makes their living in the film industry.
From: Greg Sandoval, CNET media reporter and film fan.
Re: Your livelihood
Cut your spending. Save your money. Many of the revenue streams that have gushed into your industry for decades, some for nearly a century, are about to dry up. This will likely mean a period of belt tightening like you've never seen before.
The end is coming for DVDs, traditional movie rentals, and yes, much of your cable money will likely disappear.
The news isn't entirely bad; you still have iTunes and Netflix--places where people spend money to buy or rent movies. You still have Hulu, Crackle.com, and YouTube, which are generating ad revenue by streaming full-length films and TV shows online. But the reality is that the amount of money that these legal operations generate is far less than the returns your industry is used to making. Unless some dramatic technological breakthrough occurs that can defeat file sharing, then you are staring at checkmate. Your business is headed for the same meat grinder that has chewed up the recorded music sector and print publishing. What will come out the other side is still uncertain but will likely be much smaller.
I'm sure many of you will write this off as the apocalyptic rantings of Silicon Valley propeller heads. But I urge you to pay attention to recent events.
Over the past five days I've been in Los Angeles talking to entertainment attorneys, studio executives, and some of the tech vendors who do business with the studios. I've been covering the sector three years now and I've never seen people in the film industry so dejected. DVD sales are falling, the number of upcoming film releases is expected to drop. Some big shots have even acknowledged the bleak situation in public. The past weekend, at a conference on the USC campus, Disney CEO Bob Iger said the "business model that formed the motion picture business...is changing profoundly before our eyes."
Iger warned that studios must make profound changes, "or you will no longer have a business."
Earlier this month, Francis Ford Coppola, the director of "The Godfather" said at the Beirut Film Festival that "the cinema as we know it is falling apart." He also predicted several of the studios would go out of business.
Of course, not all of your industry's problems were caused by the Web. Hollywood has paid creators handsomely over the years and costs have skyrocketed. Then there's the problem with Blu-ray. Iger noted that consumers aren't upgrading their DVD collections with Blu-ray discs to the degree that the industry had hoped.
But if you're really inclined to wag a finger, there is nothing disrupting your business more than the Internet. The MPAA has worked hard to force file-sharing sites out of business or push them to the Web's fringes. At first, the studios tried to kill file sharing with lawsuits. Then they hired security firms, such as MediaDefender and MediaSentry, which promised to discourage file sharers by blocking or slowing the sharing process. None of that worked.
Maybe that's one reason the MPAA overhauled its "antipiracy" operations three weeks ago. CNET reported on Friday that the studios' trade group decided to change the name of the "antipiracy" unit to "content protection" and fired three leaders, including the MPAA's general counsel.
And now, snatching a pirated film or TV show doesn't require knowledge of torrents. There are scores of sites that stream movies and TV shows over the Web and a viewer doesn't have to actually download the movie to their hard drive. I spoke to someone at the studios last week who said these sites are tougher to fight because they can crop up anywhere and many are based overseas. Often, said the source, "We don't know where they are."
What is happening is that the consumption of unauthorized content appears to be moving out of dorm rooms and into the living rooms of average Americans. Here is what you're up against:
A 28-year-old woman I'll call Alexandra (she asked for anonymity) grew up in Missouri, graduated from college, attends church every Sunday, and told me that she watches episodes of the hit cable show "Mad Men" at least twice a week at Surfthechannel.com, a site that hosts links to many unauthorized clips. She gleefully said that visitors can find almost any TV show they want and not pay a dime.
Alexandra said a friend told her about Surfthechannel.com a year or two ago and she watches shows there because she doesn't want to pay for a cable subscription, or a TV and because it's so easy.
She explained that she is not a bad person and that "everybody is doing this." She says one of her professors told her "he and his wife sit at home on the weekends and enjoyed movies they downloaded (illegally) off the Web."
I ask her if she has tried Hulu, the popular video site created by News Corp. and NBC Universal. The site offers a few feature films and lots of TV shows free to viewers and pays for them by serving ads. She said she had visited Hulu but added that "there's more of the stuff I want at Surfthechannel.com."
Alexandra's statements about Hulu come at a time when the site's backers are mulling whether to build a pay wall around some of its content. Alexandra and people like her aren't even accepting Hollywood's offer of free content because unauthorized sites offer better selection.
What do you think will happen if Hulu begins charging?
Don't get me wrong. I understand that the returns at Hulu are probably much smaller than what the studios are accustomed to getting. There's also the problem of growing dissatisfaction among the cable operators. How long will they continue to pay big bucks if more of their customers dump their subscriptions in favor of sites such as Hulu? Leaving a business that generated billions for one that makes far less would be hard for anyone.
But the possibility that studio chiefs must consider is what if the money offered by iTunes, Hulu, and Netflix is all that a digitally ravaged media world offers.
Eric Garland, CEO of Big Champagne, a company that tracks file-sharing usage and sells the data to the studios and major record labels said: "Hulu may be doing immediate harm to elements of your business, but waiting right behind Hulu in the shadows, are things that do so much more harm."
I rent my wonderful old films.
I agree. If it’s OK to steal intellectual property, is it OK to transmit a virus to such idiots to reformat their hard drives?
If that step is met with dismay, imagine the dismay of copyright holders looking over your shoulder as you watch their work for free while you toss back, “Everybody’s doing it, right?”
Blu-ray was a dud before the economy tanked. After the entertainment industry convinced everyone to trade their LPs for CDs and their VHS tapes for DVDs. they couldn't convince them to replace their DVDs with other DVDs that look a little better.
Like many businesses, the entertainment industry is constantly focused on making the biggest returns possible in the near term, with little thought to the long term.
Hollywood will be seeking access to the next captive audience.
I’ve always thought cable TV should go to a download format of unlimited movies, say all movies between 1930’s to present, and have them for a cheap price—maybe 99 cents.
Hollywood films are often moral pit-holes and not worth seeing. But if I’m in the mood for a clean, decent movie, it would be great to pick any one I wanted from a list on Comcast...ones like “The Winslow Boy” or “What’s Up Doc” —— I’d gladyly pay the 99 cents.
But let's not sound taps quite yet. "Free" sites that show advertising aren't free. Margins are certainly going to go down, no doubt about that. But technology does move on. I'd pay money to see a movie in IMAX that I could just as easily steal and watch on a 20" monitor, for example.
And business models tend to catch up as well. When cable television was new there were concerns expressed that there'd be no more need for commercials because you'd be covering all necessary fees by paying for your cable. For anyone younger than 40, I swear I'm not making that up. ;-)
Dear Hollywood,
First, and foremost, your revenue is falling due to the content of your product. YOU...Hollywood...opened the door and left it open, wide open, when you became a political mouthpiece and advocate.
And your revenue exited stage right.
I haven’t been to a movie theater in about 5 years. I haven’t rented a movie in about the same time frame. I have only watched a movie on cable about 4 times in the last 3-4 years. And I WILL NOT watch a made for TV movie anymore, at all.
Nor will I buy from your advertisers or sponsors.
I DO NOT want to sit through a movie and see a political advocate, and I WILL NOT do it.
Now, let’s talk about cable/satellite providers. Push has come to shove. The average American, which I consider myself to be, cannot afford upwards of $2000.00 a year for television. Even if we could, most of us can think of much better ways to find entertainment for less or for free, and much better ways to spend $2000.00.
So, now you know why DVD’s aren’t selling/renting, and why the cables are showing less and less of your product.
Hey, that’s free insight, use it to your advantage. I hope to see you again, after you wake the “F” up.
Sincerely,
Your former number 1 fan.
Less income means less output. There will be fewer movies to view.
Hmmm. Given the quality of Hollyweird’s output lately, I still don’t see a down side...
Excellent observation.
We’ve cut WAY back on our Dishnetwork bill - because most of the crap on TV just isn’t worth watching. The HDTV channels for the most part just re-broadcast the same low resolution shows, and charge you $10/month for having a HD appear next to the channel number.
I’ve become a huge fan of Netflix; I pay $9/month and have a selection of thousands of movies I can stream to my PC, or to my home theater through my XBox. If I watch the DVD the day I get it, and mail it back the next day, I can reliably count on getting 6-8 movies a month via the mail; plus the steaming content changes regularily.
The few shows I watch on TV are all on Fox. Lost (yeah, I’m addicted), the news and Glen Beck are about the only thing that interests me anymore.
I can drop $1 and watch a movie courtesy of the plentiful supply of Redbox stands in the area. I have my own home theater (1080p, 110 inch screen, 7.1 THX system) so I don’t have to put up with undisciplined punks who make cell phone calls during movies, talk during the movies or kick the seats.
Part of the problem, is that the younger generation has no idea how to behave in public. Heaven forbid that discipling them when they act up when they are younger, as that might hurt their precious self-esteem.
“So we have dumped our Directv that was going to 60.00 a month.”
Only $60.00?
My cable bill went to $168.35. Then, when i tried to cut some stuff out they told me I’d have to sign a 2 year contract. I told ‘em to shove it (my wife had a coniption fit-LOL).
Two months later they sent one of those smarmy “We want you back” postcards, offering no contract renewals. So, now I’m back and I pay $71.80. :O)
Gee, I can’t believe that I’m happy about paying for television.
What do you get for nearly 80.00 a month?
They’ve been pricing themselves out of business. $10 for a movie ticket? $4 for a soda? I think not!
With the economy the way it is, it will be no problem for people to drop that luxury.
Though I plan to see a movie this weekend- at the $3.75 matinee.
Agree about stealing intellectual property rights being wrong. Also agree that hollyweird etc. have long been over priced. Many of them are obnoxious, addicts etc. as well.
There should be some middle ground between property rights being stolen and these people being compensated astronomically.
Here’s a story that will warm your heart.
Our electricity went out one day so we headed to a movie theater. We were seeing “Kung Fu Panda”. Behind us were three of the most obnoxious girls who talked and texted all through the film. We even moved to get away from them but they were so loud we could hear them at the bottom of the theater.
At the end of the movie, we went to Petland. In walks the three loud girls. They were just as obnoxious there, grabbing bunnies and scaring the birds. Finally one scoops up a dwarf hamster then screams. Here the little buggar bit her so hard that she was dripping blood all over the floor. I’d be surprised if she didn’t need stitches.
Sometimes even nasty little hamsters can teach a lesson.
Extended basic cable (I call that the oxymoron package), Lifetime, Oxygen, Soap (wife), Speed, (me), and all the news channels. The “extended” portion gives us TNT, USA, and a couple of other unimportant ones.
That’s it. Plus, I bought a tv that I didn’t know about, but has built in HD and digital converter. So, I took back all of their boxes, and made them refund me the monthly fine, I mean rental on those, too. I tried to get them to give me only Foxnews, but they wouldn’t. :O)
That’s the whole package, not much, huh?
They have us coming and going.
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