New York Times writers By BRIAN STELTER and BRAD STONE (full disclosure: Brad interviewed and quoted me for his article on $200 netbooks and I think he seems like a real nice guy) seem to have been drinking a bit too much of the movie industry’s KoolAid.
In an article in today’s paper they write the following:
But if media companies are winning the battle against illegal video clips, they are losing the battle over illicit copies of full-length TV episodes and films. The Motion Picture Association of America says that illegal downloads and streams are now responsible for about 40 percent of the revenue the industry loses annually as a result of piracy.
The problem here is that this 40% figure is completely mythical and the reporters neither back up this outrageous claim or offer any subtantive basis for it being made.
The truth is that Hollywood revenue was up year-to-year and there is little true corellation between rates of piracy and Hollywood profits. The concept that every “pirated” viewing is lost revenue is simply absurd. It is wrong to assume that people who watch something for free would be willing to pay instead if the free version were gone.
I might watch “Paul Blart: Mall Cop” on a pirate stream for a few minutes but I will not pay $12.50 to go see it on a big screen. If the pirated version isn’t available I just won’t see the movie at all. However, if it is a great movie I want to see on a big screen I will cough up the coin.
The overall tone of this article makes it seem like this piracy is a massive crimewave instead of a rational response to an industry that refuses to evolve with the times. There is a reason that the studios are losing this war: they aren’t changing to meet their customer’s needs and so their customers are going elsewhere:
But many industry experts say the practice is becoming much more prevalent. “Streaming has gotten efficient and cheap enough and it gives users more control than downloads do. This is where piracy is headed,” said James L. McQuivey, an analyst at Forrester Research. “Consumers are under the impression that everything they want to watch should be easily streamable.”
Of course they are under that impression – it’s true. Where studios and TV networks are losing money is by not finding ways to offer a similar service at a reasonable price.
When they do make the effort, like with Hulu.com, they see great results. Viewership goes up immediately.
Why they don’t simply release copies to torrent sites with ads embedded is completely beyond my comprehension. With what they waste each year trying to “fight” piracy, they could develop and distribute a new business model that would make pirating basically obsolete.
Instead, they risk going the way of the music industry and suing their way right out of business.
Meanwhile, I am baffled as to why the New York Times seems to be siding so heavily with “Big Hollywood.”