J201Introduction to mass commLecture: Filmwhat’s the top film of all time?how would you determine the “top film of all time”?how would you determine the“top film of all time”?•US box office revenue•global box office revenue (including US)•US box office revenue, adjusted for inflation•critical acclaim•ratings by movie fans (IMdB)imdb.com(as of Feb 2008; not adjusted for inflation)(as of Feb 2008; not adjusted for inflation)http://www.the-movie-times.com/(as of Feb 2008)American Film Institute criticstop 10 US films of all timewww.afi.combut what about ...•VHS and DVD rentals•VHS and DVD sales•sale of rights for PPV, cable, and TV exhibition•spin-off products and licensing fees•should sequels be considered the same movie?... and ... You Tube?•1880s: Edison’s kinetoscope films in penny arcades•1890s: Lumière Brothers’ Cinematographe•1900s: Méliès one-reel nickelodeon films•1910s: Griffith’s multiple-reel Birth of a Nation•1920s: From silents to talkiesfilm as a mass medium seems to be coming full circle ...... get ready for a movie that will BLOW YOUR MIND•1960: 90% of US homes had television•1960: average patron went to movies 7 times/year (down from 30 times/year in 1950)•1960: half as many films made as in 1950•1968: MPAA rating system (more sex)1960s: the threat from television•roughly $10 billion US box-office revenue•nearly $18 billion more in home sales/rentals•typical film has six-week lifespan in theaters•typical film costs $50 million to produce, $25 million to advertise, $25 million to screen•film production back to 1950s levels of 500/yearToday: television no longer a threatMPAABut who goes to the movies?MPA Worldwide Market Research & Analysis2005 US Movie Attendance StudyMoviegoers12-2429%25-3928%40-5932%60+11%Moviegoers by Age Group2004Moviegoers by Age Group20052! 12-29 year-olds account for 57% of total moviegoers, though there was a slight shift toward the younger 12-24 year-olds.! Moviegoers over 60 years of age represent the smallest portion of all moviegoers.12-2428%25-3929%40-5931%60+12%MPAAMPA Worldwide Market Research & Analysis2005 US Movie Attendance Study46.6%41.2%36.4%31.3%27.7%23.5%0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%18-20 21-24 25-29 30-39 40-49 50+Frequent Moviegoers by Age Group*2005FrequencyFrequent = at least once per month (12x/year)* These figures represent the percent of frequent moviegoers among the moviegoing population per age group 7! There are more frequent moviegoers in the 18-20 year old age group than in any other group.•the “star system”•8 companies controlled 95% of film production•vertical integration•“block booking”early concentration in the film industry•1960s: diagonal integration or “conglomerates”•1980s: deregulation (studios can own theaters)•10,000 “independents” (digital filmmaking)•7 largest studios produce under 50% of all movies but gross over 80% of all box-office revenuesconcentration in the film industry todaytop six film studios(Oct 2007)economic power of the film (and TV) production industry•$30 billion in wages•$10 billion in taxes•more than 400,000 jobs•a trade surplus of $9.5 billion•“really made up of middle-class guild and union members who often live hand to mouth”Motion Picture Association of AmericaThe DVD turns 10 years old•format introduced in 1997; now in 88 million HH•2005: $16 billion DVD sales, $7 billion DVD rentals•2005: VHS total spending only $1.5 billion•studios make ... $12 revenue from a $20 DVD $5 revenue from a $10 theater ticket almost nothing from a video rental•films now proposed with DVD in mind•DVDs through mail (Netflix) and Internet (WalMart)Hollywood ReporterBiggest threat to the big studios?2&The Cost of Movie Piracy!"#$%#$&! Overview! Major Findings! MPA Member Company* Losses! Piracy Rates by Country! Dollar Losses by Country! Worldwide Motion Picture Industry Losses! Pirate Profile! Methodology*MPA Members: Buena Vista Pictures Distribution; Metro-Goldwyn-Mayer Studios Inc.; Paramount Pictures; Sony Pictures Entertainment Inc.; Twentieth Century Fox Film Corporation; Universal City Studios, LLP; and Warner Bros. Entertainment Inc. 5&The Cost of Movie Piracy!"##$ #%&"%'()%'$*+$ , %-"*./01$#MPA Member Company Revenue Loss by Source of Piracy* $447$864$1,859$2,906Internet Piracy Hard Goods PiracyInternationalUSThe major U.S. motion picture studios lost $6.1 billion to piracy in 2005. $4.8 billion, or 80 percent, resulted from piracy in other countries and $1.3 billion, or 20 percent, resulted from losses in the U.S. $3.8 billion was lost to hard goods piracy, defined as obtaining movies by either purchasing or acquiring an illegally produced VHS/DVD/VCD through a commercial source, or making illegal copies for oneself or receiving from a personal source (friend or family) an illegal copy of a legitimate VHS/DVD/VCD.$2.3 billion was lost to internet piracy, defined as obtaining movies by either downloading them from the Internet without paying or acquiring hard copies of illegally downloaded movies from friends or family.$2,306 $3,769 *All figures throughout shown in $U.S. Millions4&The Cost of Movie Piracy!"#$%&'()*()+,! The major U.S motion picture studios lost $6.1 billion in 2005 to piracy worldwide.! 80 percent of those losses resulted from piracy overseas, 20 percent from piracy in the U.S. ! 62 percent of the $6.1 billion loss result from piracy of hard goods such as DVDs, 38 percent from internet piracy.! Piracy rates* are highest in China (90 percent), Russia (79 percent) and Thailand (79 percent).! The worldwide motion picture industry, including foreign and domestic producers, distributors, theaters, video stores and pay-per-view operators, lost $18.2 billion in 2005 as a result of piracy. ! The typical pirate is age 16-24 and male. 44 percent of MPA company losses in the U.S. are attributable to college students.* See page 6 for definition of piracy rates.6&The Cost of Movie Piracy!"#$#%&'%("#%)&$*+,%$*(#%"&-"#'(.China, Russia and Thailand have the highest piracy rates*. By comparison, the piracy rate in the U.S. is 7 percent. Percent of Potential Market Lost to Piracy *90%79% 79%76%65%61%54%32%29%25%China Russia Thailand Hungary Poland Mexico Taiwan Spain India Italy*Piracy rates are derived from MPA member company legitimate revenue plus estimated revenue lost to piracy in each market. They are a static snapshot of the percentage of the
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