OLIVER: Film industry must stomach smaller profits to survive

Eric Oliver

eric oliverThe Internet has crippled the movie industry, but it wasn’t really trying to defend itself either.

So who’s taking down this multimillion-dollar industry that simply got too greedy? You could say it was Netflix or piracy or even incredibly high prices. I’m going to say it was a mix of all three. 2002 was the last year that profits rose in Hollywood, since then they decreased annually.

In an earlier column, I talked the economics of Netflix, the world’s most popular streaming service, and the fact that Hollywood and the movie industry are staying away from the online giant because they don’t feel like they’re getting their fair share. The industry wants more money for its movies, and it isn’t taking no for an answer, which is evident in the current movie catalogue that is devoid of new and old blockbusters with a few gems mixed in.

Think of Netflix as the first punch. The second is piracy or illegal streaming.

When you can get something for free, why pay for it? Yes, the free copy is low quality, and you don’t get the theatrical experience, but it’s still free – and illegal.

There is no online coast guard patrolling the digital sea trying to stop piracy, and the Internet is too massive to ensure the effective enforcement of such an agency anytime soon.

So why should we stop pirating or streaming movies? It’s simple. When you steal a movie from the Internet, the actors get nothing. No one involved with the movie gets anything because you downloaded their movie from the Internet for free.

Couple million views on the Internet isn’t a problem for some, but not everyone in the industry is rich. Particularly for independent movies, piracy takes hard work and gives it away for free, and that’s unacceptable. Actors aren’t monkeys trained to perform for our every whim and desire; it’s a job, and an incredibly hard one too. Everyone in Hollywood deserves to get paid for their work, but because it’s too expensive to police piracy, it goes relatively untouched.

The final one-two punch is that the movie industry wasn’t doing much to help itself anyway. Netflix, Redbox and piracy sprung up because going to the theater became incredibly expensive.

Who thought two tickets, popcorn and a soda could total up to $40, considering I can buy the same things from Target for about $20?

The thing that makes me scratch my head and ask why is that movie theaters know they are ripping you off.

Marcus Theaters has a promotion every Tuesday, when every movie is $5 all day. It’s a great idea that should’ve happened a long time ago. Since its introduction, Marcus saw rampant growth – but only on Tuesdays.

People love this deal, and Marcus is making a lot of money on it. It really makes me wonder why every day can’t be $5 movie day. They’re going to run the movie whether the theater is full or not, so why not make the price lower to make more money from a packed theater?

Hollywood can still produce blockbusters that earn millions of dollars easily (see any of the thousands of comic book movies or the Hunger Games series), but unless everything gets cheaper, the Internet is going to keep eating away at profits.

The industry needs to fight back with a cheaper business model by accepting smaller profit margins and pulling people back into the theater, much like what Marcus is trying to do.