An article in the LA Times discussed the MPAA’s new tactics against piracy: delaying it, not preventing it. I’m just going to take an amateur’s shot at exposing some of its lunacy.
If the movie’s a stinker, the word will travel at the speed of a mouse click, ruining chances of making back money. And if the movie’s popular, piracy can rob ticket sales and cut into revenue.
If the movie is a stinker… it may make less money, because of word of mouth. Boggles my mind. Marketers always talk about the value of word of mouth. Oftentimes, we choose to ignore that it cuts both ways. If the product sucks, word of mouth will sink you. To expect anything less is idiotic.
The Batman sequel’s core audience of superhero geeks is the same group of young men who gravitate to online file-sharing communities. Fear that pirated copies would pop up on the Internet during the film’s crucial opening weekend prompted Warner to devote six months to an unprecedented anti-piracy strategy, painstakingly locking down the movie as it moved from production to post-production to movie theaters.
The article later states that this helped delay privacy for a whole 38 hours. I’ll get to that point later. But here they’re making a blanket demographic argument. Hardcore fans = young male geeks = pirates. So anti-piracy measures were necessary to prevent losing $ among this group. However, they completely dismiss or ignore the psychological argument. You will always have your hardcore audience in your pocket. The “geek” who orders tickets to an opening weekend show, most likely in advance due to the tremendous amount of pre-launch buzz, did not make that purchase because he couldn’t find a bootleg in advance or because he wasn’t confident that he’d be able to find a suitable replacement on opening day. He made that purchase, because as a hardcore fan, there was no suitable alternative to purchasing a ticket. Let’s not forget, while pirating speed may have increased due to the Internet, quality still sucks. A cam source and even a telesync source does not come close to providing the same experience as the theater experience. I’ve never come across anyone, in my life, online or offline, who was so amped up about a movie, say, “I can’t wait to download the CAM-rip as soon as its posted Thursday night.” Until bootleggers are pumping out HD quality rips (which – ironically – probably won’t happen until the MPAA moves to an all-digital distribution method) you will not lose the hardcore crowd.
Warner Bros. executives said the extra vigilance paid off, helping to prevent camcorded copies of the reported $180-million film from reaching Internet file-sharing sites for about 38 hours. Although that doesn’t sound like much progress, it was enough time to keep bootleg DVDs off the streets…"One of the reasons why it’s so important to try to protect the first weekend is that it prevents the pirate supply chain from starting," said Darcy Antonellis, president of Warner’s distribution and technical operations. "A day or two becomes really, really significant. You’ve delayed disc manufacturing that then delays distribution, which then delays those discs from ending up on street corners for sale."
The MPAA has spent most of their legal efforts at trying to curtail online piracy. But then why is Darcy Antonellis talking about the physical supply chain? 38 hours may have been a difference between bootleggers not getting discs out on the streets in the early 90s, but in the world of the Internet, it’s the difference between a Thursday/Friday 12AM showing and a Saturday matinee. Essentially, it means nothing. And last I checked, MPAA was spending millions to prosecute the file-sharers that studios were worried about. Not the handful of copies that street peddlers pawn. So ultimately, a day or two is not “really, really” significant. In the Internet world, it means close to nothing.
Studios fear a reprise of the "Hulk" piracy debacle. A rough, early version of Ang Lee’s 2003 summer movie made its way to the Internet two weeks before the film’s scheduled premiere, provoking negative reactions from the comic-book film’s devoted fans, whose opinion carries far more weight in determining the success of this film genre than that of mainstream film critics.
"Hulk" still had an impressive opening, grossing $62 million in its first weekend. But by the second week, mediocre reviews and corrosive word of mouth pushed grosses down 70%. The studios aren’t eager to give the audience advance — and uncontrolled — viewings of its tent-pole films.
If you look at the following NYT graph, you’ll see an increasing trend where movies are making an significantly higher percentage of their revenue in an early burst and show relatively poor longetivity, whereas in the past, movies lacked the initial burst but had better longetivity. If pre-opening and opening day piracy leaks were really an issue, you wouldn’t expect to see that trend. If movie-goers could get pirate copies in their hands (computers) before the movie opened, or on the day the movie opened, you should expect to see the opening weekend burst to trend lower. But that hasn’t been the case. Even in the case of the Hulk, there’s 62 million reasons for why that wasn’t the case.
So what’s going on there? Well, let’s go back to an earlier point in the article:
Executives at Warner Bros. knew they didn’t have to worry about the first scenario: Buzz had been building for months about late actor Heath Ledger’s performance as the Joker and director Christopher Nolan’s dark rendition of the Batman legend. And marketing surveys pointed to a record-smashing opening weekend for "The Dark Knight" at the box office.
Buzz had been building for months. Months. This is a relatively new phenomenon. And something marketers love about the Internet. You can drum up an unprecedented level of buzz these days. You can make that bubble grow bigger and quicker than it ever has before. Whereas in the pre-Internet days, how the heck would they blow that bubble up? No E! No US weekly. No non-stop cable and Internet coverage. So it make sense that there was a more gradual curve of sales and decline in the old days. Word of mouth that’s based on one-to-one letter or a phone call conversations is infinitely slower at spreading than an email blast or a newsgroup posting or a blog post.
So now in the post-Internet days, you’ve got the hardcore lined up from day 1. They’re all riled up and ready to go after months of waiting. And go they do. First week sales are explosive. New opening day records are broken every year (never mind inflation for a moment).
So what happens in week 2? Of course, big bubbles pop quicker and more explosively. Like I mentioned word of mouth cuts both ways. And now just as quickly as marketers can build up a (good) movie. Reviewers, viewers and the like can tear it down just as quickly. Hulk’s 2nd week decline of 70% was largely a result of word of mouth, not piracy as they infer. You don’t need to download a movie to know it sucks and isn’t worth watching. You’ll know that the very next day.
However, I’m willing to give the MPAA some benefit of the doubt. I stated my hypothesis that movies will always have the hardcore in their pockets; that advance and opening day piracy does little to impact opening weekend sales (which the numbers seem to show). But I’m willing to consider that perhaps piracy hurts sales most in the 2nd, 3rd and 4th weeks, when you’re moving past most of the hardcore and reaching into the interested and the interested-but-somewhat-ambivalent crowds (I suppose you’d consider this the early majority and a piece of the late majority). So what would I consider “extra vigilance paying off”? Preventing piracy for a full month. That is what I’d consider a victory. Do that, then start talking about how much piracy is hurting box office revenues. Because then you can compare the weekly percentage drop off, with piracy and without piracy (comparing year-to-year box office numbers is always a bit arbitrary due to the quality of movies that are released year-to-year), and you can compare the longetivity trails as well. Note, that you can’t compare those numbers from 2008 to say, 2003 when the Internet was present, but piracy wasn’t as huge, since the technologies that have been a boon for piracy, have equally been a boon for creating buzz.
Finally, I leave you with a couple pieces of genius:
“A lot of people decided not to go near it [the Hulk]. Hollywood argued, correctly, that many more people would have gone to see it, had online buzz not been so critical of the movie," said Eric Garland, chief executive of BigChampagne Online Media Measurement, which monitors file-sharing networks and is a consultant to the entertainment industry.
Perhaps they should outlaw negative buzz. And while they’re at it, perhaps they can outlaw suck-ass movies.
"If the movie’s a stiff, and word gets out too early that it’s a stiff, it’s devastating to the business model," Garland said.
This is the stuff they teach in business school. If the product sucks, you will not make money (unless you’re able to deceive the consumer). It’s nuggets of wisdom like these that explain why this dude is making much more money than me.
Ouch. My head hurts.
