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  • Memo to the Entertainment Industry: It’s the Product, Stupid!

    August 31st, 2006

    Sometimes I think that certain entertainment and tech journalists are simply lazy. I mean, they just repeat what a movie or music industry flack says without bothering to question the fundamental logic, or at least providing an opposing point of view.

    If you believe the stuff they tell you, and I’ll avoid the more graphic description of their spiel, there are a number of reasons why the movie box office figures have stalled, and CD sales are down. I’m going to evaluate the fundamental claims, and try to test them against simple logic to see if they hold water.

    People aren’t buying CDs because they are stealing their music from the Internet: I suppose that’s a convenient excuse, that teens are busy downloading their songs from their favorite peer-to-peer network software of the week, that they share their bogus merchandise among their friends, and so don’t buy the genuine versions in the stores. In fact, I think it’s partly true, but it’s not the entire picture.

    As you know, the iTunes Music Store has become one of the largest music retailers in the world, and those figures for CD sales don’t include digital music. Sure, it’s fair to say that you don’t get the same sonic fidelity when you play a relatively low bit-rate file instead of the “lossless” version. But for most of you, I bet that’s not terribly important. Apple’s AAC codec sounds good enough, and it actually sounds decent even on a classy car radio. Yes, there are some instruments, such as acoustic piano, which might reveal deficiencies, but it probably won’t make that much of a difference on a pair of $20 earbuds.

    So when you factor in the legitimate online sales, well maybe music sales are down, but not quite as much as the music industry’s ax bearer, the RIAA, would have you believe. They still hope that harassing innocent senior citizens will somehow reveal a treasure trove of pirated goods.

    In the end, though, how much of today’s music is even worth buying? There’s always a lot of junk, but it seems that the corporations have somehow managed to squeeze creativity out of even the most ambitious recordings. This happened before, of course, but in those days, the Beatles arrived to set the music world afire again. Is there a 21st century alternative? Inquiring minds want to know, because when those artists arrive, assuming the industry allows their creativity to flow freely, they won’t be complaining about falling sales.

    Movie box office receipts are stagnant because people would rather stay home and watch the DVD or the cable and satellite alternative: That’s also partly true. But it doesn’t cover the whole picture, which is that going to the neighborhood multiplex with your family in tow can get mighty expensive.

    If you don’t go to the matinee or are not eligible for a child’s, student’s or senior citizen’s discount, you can pay upwards of $10.00 per ticket. A bowl of popcorn is $5.00, and your favored soft drink is another $4.00 a cup. The average American family of two adults and two children can spend more than $60 plus $3.00-a-gallon gas and lunch on an outing to see a movie.

    As far as the exhorbitant prices for snacks are concerned, it’s not just a matter of price gouging. The multiplex has to return 55% of its first week’s gross from a flick to the movie studios, so it has to make a profit somehow, and some of these theater chains are finding those profits hard to come by. Well, maybe if they cut the prices of those extras, maybe more families would attend.

    Moreover, just compare those figures to the $15 you pay for the DVD, or the comparable amount you might pay every month to rent a bunch of them via Netflix. With the proliferation of flat-screen TV sets, which are slowly becoming affordable, and a decent sound system, the home movie experience is looking almost comparable.

    In the end, though, it’s still a matter of product. Even though the critics weren’t too impressed, the sequel to “Pirates of the Caribbean” was a huge crowd-pleaser. It has earned hundreds of millions of dollars, and the final box office figures are yet to be tallied.

    As with music, it all goes to show that if you deliver a truly entertaining motion picture, and give it a decent level of promotion, it will often find an audience. When that happens, the entertainment industry will, once again, run out of excuses and come to realize that, in the end, it’s still the product that counts!



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    4 Responses to “Memo to the Entertainment Industry: It’s the Product, Stupid!”

    1. brent lee says:

      Here here!

    2. John Austin says:

      It still amazes me that people are even still BUYING music after the heavy handed RIAA sues the hell out of people…and most of them are people who CANT defend themselves, or are dead, or 80+ years old. and when you Consider the price of a normal music cd these days is upwards of $20 for a cd, and sometimes only half or less of those songs are really interesting to me.

      Do I download music from P2P? yes. and I’ve discovered music I’d never even considered was there. I’d say 90% of my music library consists of cd’s of music I’d previously downloaded and liked so much that I had to buy the CD. The RIAA will tell you that illegal filesharing is cutting down their profits, but honestly how many people want to buy CD’s from the 80 lb gorilla bashing the lives of the very people they depend on for those “profits”

      Now days, I’m happier to support artists who DONT support the RIAA.

    3. Richard Taylor says:

      This past year has been one of the worst in terms of quality and diversity of subject matter the movie industry has ever seen. My wife and I are avid movie fans, but even so we’ve gone out to see a movie only a handfull of times, and what we’ve seen hasn’t been worth the effort. I fell asleep in the middle of Pirates 2.

      Make good movies and the people will come.

    4. -hh says:

      On Music,

      I’ve found that the digital medium has re-invigorated my interest in buying the product. For the ~10 years before I discovered iTunes, I bought maybe 3 CD’s. But in the past 2 years, I’ve probably around 8. Doing the math, I went from 0.3 CD’s per year to around 4/year – – a full order of magnitude upturn in sales.

      Of course, because of my hatred of the RIAA’s duplicity and heavy-handed tactics, I now prefer to buy used.

      On Movies,

      I used to work at a local movie theater. The ticket for an adult (prime time) was $3.50 and a kid was $1.75 Popcorn and soda were the profitable items for the local theater, as the bulk of the box office gross got sent to Hollywood. Overall, a lot of our demographic customers were high school kids on dates, and the reality is that since they get hit with the adult ticket prices, going to the movies is no longer an affordable date. Once they can’t afford to come to the theater once per week (or 2x/month), they get out of the habit and go find other things to be entertained by.

      FWIW, what would be really telling is if the weekly box office reports weren’t reported in terms of Gross ticket sales in dollars ($$), but in actual seats sold – – and then normalized across all of those past ‘Blockbuster’ movies: yeah, some 2006 box office hit brought in $100M, but at $10 a pop, that’s only 10M customers…compare that to, say “Rocky” (1976) .. it made $117M at $3 per ticket, which means that 39M (roughly 4x more) people saw that film!

      As the saying goes, there’s lies, damn lies, and then there’s statistics. It applies to both of these industries.

      -hh

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