Piracy? What Piracy? 2009 Box-Office Overtakes DVD/Blu-ray Sales
IMAX and 3-D help the cause as you open your wallet
Reuters has posted a fascinating story reporting box office receipts boomed to $10.6 billion (including Canadian ticket sales) in 2009 and overtook DVD and Blu-ray sales of $8.73 billion. Just yesterday I was reading in the New York Times how DVD sales declined by some $1 billion in 2009 from the previous year, while sales of Blu-ray discs, according to data from the Digital Entertainment Group, rose by $200 million, partially offsetting the industry downturn. So, while 2009's box-office, without adjusting for inflation, became the biggest box-office year on record — beating 2007's record total of $9.68 billion — it's not as if home video was doing all that bad either, just not as good as it was when consumers rushed to Best Buy every Tuesday and filled their shopping carts with every single new release regardless of quality.
The Reuters article says DVD and Blu-ray sales including films, television shows, concert videos and other content declined about 10 percent to $13 billion in 2009, according to Adams Media. About $1.1 billion of the movie discs bought in 2009 were on Blu-ray, and the number of homes with Blu-ray players grew from 3 million to 8 million. Rentals in 2009 grew to $8.15 billion from $8.11 billion in 2008.
The studios love to talk about how much money they're loosing after they started counting on DVD sales as business peaked in 2004 with U.S. sales of $12.1 billion. And the latest argument is how companies such as Netflix and Redbox are cutting even deeper into their profit margins. Throughout all of last year I started to grow increasingly frustrated as some DVD news sites began reporting Blu-ray sales picking up the slack as a positive. As if consumers making up for an industry gap by purchasing overpriced Blu-rays was actually good news.
In my opinion it's both good and bad news, a good example being my recent review of the 10 Things I Hate about You Blu-ray, a film I like, but could never justify recommending readers spend an additional $7 on the Blu-ray version over the DVD version. At least Criterion, the undeniable leader in the home video market, prices their Blu-rays the same as their DVDs and at the same time offers content and supplementary materials making such purchases worthwhile. As for the bloated 2009 theatrical figures, tactics such as the increased cost of seeing films in 3-D and IMAX obviously helped things out, as if those options are worth the higher price on any film thus far other than The Dark Knight or similar films actually shot in IMAX.
Looking at all these numbers and thinking about how the studios complain piracy is hurting their numbers is ridiculous. Money is obviously being spent and at record rates. However, if we wanted to believe piracy was having any effect and if we wanted to figure out new ways for the studios to make more money in the DVD and Blu-ray realm, I am turning around my opinion, ever so slightly, on the idea of selling the DVD and Blu-ray of some theatrical releases after walking out of the theater.
I still don't think this is a model that works for major blockbusters or any film with a significant marketing campaign, but Devin Faraci's recommendation at CHUD saying the idea of selling the DVD or Blu-ray to audiences after seeing a smaller, indie film could be a goldmine for studios as well as bolster the appeal of indie features. How much more inclined would you be to buy the DVD or Blu-ray of films such as Antichrist or Moon after seeing them in theaters? As long as it was kept to patrons that had just paid to see the movie this could be a revolutionary idea that would keep blockbuster box-office intact and raise the awareness on smaller indie films as some people may be more interested to see them with the added incentive of owning it afterward if they liked it.
What do you think?
Thanks to SlashFilm for the heads up on the Reuters piece.
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Cool article Brad but I don't understand the concept of having exclusive rights to buy an indie movie after seeing it in theaters. If you release a movie in theaters and X amount of people saw that movie, you have to bank on that fact that X will want to buy that movie, whereas you might have people rent a movie and say: "Hey, this movie is awesome I want to own it" and they can't because they didn't see it in theaters? The problem with indie movies is that not everybody has local cinemas that play indie movies so some may have to wait to rent or buy it.
Unless I am misunderstanding the recommendation in the article?
@Roger: No, exclusive to people that saw it during its theatrical run. Certainly it will have a traditional DVD/Blu-ray and rental release after that.
I spend so much money in movie theatres and on DVD/Blurays that I feel no guilt whatsoever in pirating movies.
@Brad Brevet:
Ah ok, thanks I get it now.
It's mentioned in the article that some DVD news sites have reported it as a positive that blu-ray sales, because of their pricing, are "picking up the slack".
Isn't blu-ray pricing potentially the biggest error?
Blu-ray sales are still a fraction of DVD sales. The people buying SD either haven't upgraded their home theaters or they're not interested in spending $30-40 on a blu-ray at Best Buy.
Most of my blu-ray collection has come from the Amazon marketplace or other used outlets that sell discs for cheap. A few companies, like Criterion as you mentioned, or even Disney (you can still get the Up blu-ray for less than $20 just about anywhere), are on the right track. But, once I see a $30 pricetag for The Hangover, I have to sit and think – did I really like it THAT much? I'll wait a few months and pick it up used instead.
I have to agree, DVD sales would increase. Also the studios blaming piracy is rubbish, maybe if they were more original with their films or allowed more indie films they would see an increase in revenue. My Idea for a new business model/ Value chain would be as follows:
Film release/ DVD release same day –> 3-6 Months later the blu-Ray/ Special editions Release
Although my original model is larger you get the gist of the idea.
Does anyone think there will come a day when you go to the movie theater, and are offered the chance to buy the DVD of the movie right afterwards? Or at least they could try this at concerts.
@mfan: yes I do and the concert idea is where it should begin, the problem is editing the concert they would have to do one or two shows that no DVD is available, or it would be an unedited DVD, or you could buy it and it can be mailed to you with in the week
in north america maybe this is already changing, but in asia, particularly in south america & southeast asia, piracy is still a big problem. for one, we have a more lower class people that cannot afford watching it in theaters & resort to pirated DVDs & Blu-ray (converted to DVD viewing). I am also guilty of this because not all movies are shown in the Philippines & i always look for internet sources to see what's new. if i like the buzz or the review of it, i look it up by buying them on pirated form, then if i really really loved it, i order an original blu-ray or DVD copy at amazon or yesasia.com (asia's amazon.com).
but i do agree that people are turning to cinemas now. a little is also felt here in asia because of the IMAX or 3D experience. Im not saying that all movies should then be 3D to keep audiences away from pirated materials. but because of the highlights of 3D coming back to cinemas, people are more curious what it will look like.
another factor in asia is that since the effect of economic recession is still ongoing, people are resorting to less expensive ways to bide their time & enjoy with their families, which is watching movies the proper way instead of travelling to white sandy beaches
The reason is simple. People go to the theater to see movies more because at home they are spending money on PS3, Xbox and Wii games. Sales of video games is something like 10 times the sales of movie tickets and dvd/blu-ray combined. Home video is getting pushed out by the video game industry. Thats why im glad stuff like AVATAR is out there trying to lure people back the the cinema. Can't play Wii at the multiplex.