Monday, March 1, 2010

Why the US film Industry is Going Bankrupt

About 2 years ago, in the January of 08, I started a little project. It was to look at the box office figures put out by the film industry, and look how p2p had impacted them. I did some initial research, which looked at US box office figures for 1996-2007.


Then, in June 07, I published an initial summery of some of my findings, with the aim that I would try and have the full study finished by the end of July 08. That (obviously) didn't happen. A mixture of real-life pressures, and ADD kept me from finishing it (plus work on the Pirate Party US/International).

Studies like this were the reason I stepped down from Pirate Parties International. It's only recently, now that the US Pirate Party has a full board, that I can concentrate once more upon things. So, I've updated the box office figures, and included 2008 and 2009 as well as 1990-95 (although some of the 09 films are still showing, so shouldn't be taken as 'final').

One thing I did notice when collecting the figures, were the figures for 2005. This is the year, let's not forget, where Hollywood claimed to lose $6.1Billion, to “Piracy” (meaning 'copyright infringement')

The thing is that while the box office figures for the US were down a bit, they weren't down by much, especially not when compared to the 90s (before 'piracy') What's more, while they may have lost a claimed $6.1Billion worldwide (1.3Billion of that in the US); the top ten films, of the 547 or so released that year, took in over $5.7B worldwide (and $2.4B in the US).

They never mention their income in the same press release as their claimed losses, and now you know why. They also never include the costs of the films, and there's another reason. The top 10 in 1990 cost around $316.5Million in 1990 dollars (521.5Million in 08 dollars), which included films like Ghost, Total Recall, and Due Hard 2.

2005's top 10 films cost a whopping $1.307 BILLION to make by contrast ($1.441Billion in 08 dollars) – 2.7x more. In fact, only two of 2005's films cost less to make than the most expensive film (in the 1990 top ten, Die Hard 2 ($70M in 1990, $104M in 05 dollars). Those were Wedding Crashers ($40M) and Madagascar ($75M)

When you want to look at a reason Hollywood, and the MPAA feel they're losing money, it's the budgets that should be looked at. People are still going, but it's the expense that drives the profits down.
Many thanks to BoxofficeMojo for lots of lovely data to work with.
Part1 - US Box Office Top10 from 1990-2009

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