The Movie Industry Is Making the Most Money from the Technologies It Claimed Would KILL Its Profits

The Movie Industry Has Been Screaming for Almost 100 Years that New Technologies Would Kill Profits … And Yet Most of Its Income Comes From the EXACT TECHNOLOGIES It Whined About

Steve Blank makes an important point:

This year the movie industry made $30 billion (1/3 in the U.S.) from box-office revenue.

But the total movie industry revenue was $87 billion. Where did the other $57 billion come from?

From sources that the studios at one time claimed would put them out of business: Pay-per view TV, cable and satellite channels, video rentals, DVD sales, online subscriptions and digital downloads.

The Movie Industry and Technology Progress

The music and movie business has been consistently wrong in its claims that new platforms and channels would be the end of its businesses. In each case, the new technology produced a new market far larger than the impact it had on the existing market.

  • 1920’s – the record business complained about radio. The argument was because radio is free, you can’t compete with free. No one was ever going to buy music again.
  • 1940’s – movie studios had to divest their distribution channel – they owned over 50% of the movie theaters in the U.S. “It’s all over,” complained the studios. In fact, the number of screens went from 17,000 in 1948 to 38,000 today.
  • 1950’s – broadcast television was free; the threat was cable television. Studios argued that their free TV content couldn’t compete with paid.
  • 1970’s – Video Cassette Recorders (VCR’s) were going to be the end of the movie business. The movie businesses and its lobbying arm MPAA fought it with “end of the world” hyperbole. The reality? After the VCR was introduced, studio revenues took off like a rocket. With a new channel of distribution, home movie rentals surpassed movie theater tickets.
  • 1998 – the MPAA got congress to pass the Digital Millennium Copyright Act (DMCA), making it illegal for you to make a digital copy of a DVD that you actually purchased.
  • 2000 – Digital Video Recorders (DVR) like TiVo allowing consumer to skip commercials was going to be the end of the TV business. DVR’s reignite interest in TV.
  • 2006 – broadcasters sued Cablevision (and lost) to prevent the launch of a cloud-based DVR to its customers.
  • Today it’s the Internet that’s going to put the studios out of business. Sound familiar?

Max Keiser alleges that movie and music industry execs are horrible businessmen for trying to protect an outdated business model through SOPA and PIPA:

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  • gmathol

    Problem is – Apple has created the I-diot, a user who is willing to pay for anything, even for advertising. The American movie industry hasn’t produced anything in the last decade we would like to watch, to buy or even to copy. HBO – Disney? Who with the right mind would watch this pieces?

    • Keisha

      HAHAHAHAHA sooo truueeee

  • This is just how the world works, and anyone who tries to hang on is in for a painful realization down the road. Technology changes (at unbelievable rates) and because of that fact companies need to change quickly too.

    Imagine what would happen if the recording industry got behind services like Spotify, and worked exclusively with them. Or if a recording company created their own site for unlimited streaming of their bands for a small monthly price. Or if a production company released an iPhone app with exclusive (and not boring or repetitive) content and charged $1/pop.

    If multi-million dollar businesses can be made from games where you shoot birds at a bunch of boxes, imagine what actual effort behind an idea could do for the entertainment industry.

    “We can’t solve problems by using the same kind of thinking we used when we created them.” – Einstein

  • Nola

    I totally agree with you gmathol!