In 1948, with studios earning all their revenues from the box office, that audience was moviegoers. Even as late as 1980, when the audience had television sets and video players, studios still earned 55 percent of their money from people who actually went to movie theaters. In 2005, however, those moviegoers provided the studios with less than 15 percent of their worldwide revenues, while couch potatoes provided it with 85.8 percent.I had naturally assumed that the rapid adoption of DVDs had changed the movie business, but I hadn't dreamed that things had swung that far. Obviously this has been a long-term trend - beginning with the introduction of TV in the 1950s - but to think that studios now lose money on their box-office releases is astonishing. Congratulations, technology: You've made the traditional movie theatre essentially a marketing device for the DVD market.
You should really read Epstein's entire piece - and his others on Slate too. But let's take a moment to realize what bullshit the movie studio's anti-piracy campaign has been. After much wailing an gnashing of teeth over the declining box-office take, and worries about a slowdown in DVD sales, Epstein lays this on us:
Instead of a box-office decline, the studios actually took in more from the U.S. box office in the first quarter of 2005 ($870.2 million) than they did in the similar period of 2004 ($797.1 million). So even though the total audience at movie theaters declined during this period, this came mainly at the expense of independent, foreign, and documentary movies. For the Hollywood studios (and their subsidaries), in fact, there was no slump at all....Well first off, I'd like to say I'm an idiot for buying the hype about the alleged movie "slowdown". Once again - you listen to the studios, and you're being lied to.
The numbers tell the story. In the first three months of 2005, the studios earned $5.67 billion dollars from DVD sales, compared to $4.375 billion in the same period in 2004. DVD sales were up $1.29 billion, an incredible rise of 28 percent, which exceeded last year's increase. So there was hardly a slowdown in DVD sales. Indeed, DVDs alone now provide 59 percent of the feature film revenues of the studios, as opposed to 48 percent in 2004.
Secondly, look at the second part of the DVD story - not only do they now make up 85% of a studio's revenues, but they even make up almost 60% of an individual new release's revenues. And that figure is up more than 10% in a single year. Hate to say it, but it looks like the movie chains are doomed - DOOMED, I SAY! Actually, I don't hate to say it too much - going to the theatre these days usually fills me with equal parts of dread and apprehension. Don't buy the fear-mongering, either. Actors will continue to get paid, films will continue to be made. But the increasingly irrelevant theatres will probably be shuttered. But as Wired tells us today, they won't go down without a fight.
Representatives of Hollywood's top movie studios say they have agreed on technical specifications that will make it easier to distribute and display movies digitally....Fascinating, and it might even staunch the hemmoraging of the audience - for a time. But I doubt it. Frankly, the "experience" of going to a movie just isn't worth it anymore - I haven't left a movie theatre without feeling at least slightly ripped off since Fellowship of the Ring came out. I don't know about others, but even the best movies don't make up for a $40+ expense, especially when the DVD will be out for $25 in 6 months, and I own a microwave for popcorn.
Studios spent more than $631 million in 2003 on film prints for the North American market alone, according to the Motion Picture Association of America. Subtracting reels from that equation could reduce total distribution costs by as much as 90 percent, according to U.K. digital cinema analyst Patrick von Sychowski. Add in costs for overseas distribution and exhibition, and the move from prints to digital files could mean an eventual annual savings of up to $900 million.
Advocates of the shift to digital exhibition say theater owners also would benefit from new flexibility: If a movie sells out in one theater, an owner can quickly switch other screens to that feature to accommodate the unexpected demand. And if a supposed blockbuster turns out to be a bomb, it can be yanked from screens just as instantly -- no new prints from the studio, no reel swaps.
So: The movies are dead! Long live the movies!