Sony CEO Pleads Poverty But The Movie Industry is Loaded

In a piece today in The Times, Sony boss Michael Lynton yet again champions 3 strikes for alleged pirates and states that combating piracy could add millions to the economy. He also says that due to piracy, in 2008 Hollywood made the lowest number of movies in the last decade. So where did its record earnings go?

Michael Lynton, chairman and CEO of Sony Pictures Entertainment, is becoming a confusing guy. Back in May this year, millions of people looked on in disbelief as he labeled one of the world’s greatest technological and communications achievements – the Internet – as a mechanism from which nothing good had come, period.

Then, a little later, Lynton hit back at his critics. He pointed to the leak of an unfinished copy of Wolverine, which appeared on the Internet (from a movie studio source who has never been identified) a month before its official release. As Techdirt pointed out, none of this hurt the movie.

Despite terrible reviews and this “devastating” leak, Wolverine still did very well at the box office, taking $35 million on its first day, beating both X:Men ($20.8m) and X2: X-Men United ($31.2m).

In a guest piece in The Times today, Lynton is complaining again. “Internet piracy means less money to make movies,” warns the headline.

Lynton begins by plugging Sony’s launch tomorrow of Michael Jackson’s This Is It, noting the importance of releasing it simultaneously worldwide.

“If Sony released it only in the US on Wednesday, by late Thursday it would be camcorded, uploaded on to the internet and available free to anyone with a broadband connection,” he said.

While absolutely correct, everyone also knows that the following is also true. The quality would be absolutely dire, Jackson’s singing would be punctuated by the rattling of candy packets and accompanied by a myriad of noisy cinema-goers singing their own version of his songs, probably all in D-Minor. The video would undoubtedly bring a whole new dimension to Black or White. People download this garbage but no-one enjoys it, and for good movies sales are not affected – but I digress.

“Online theft siphons billions of dollars out of the marketplace. That means less money to make movies. Projects get scaled back and others dropped. Some potential blockbusters won’t get made. Some new writers, actors and film-makers won’t get discovered,” writes Lynton, adding;

“Last year the leading Hollywood studios made 162 films — more than 40 fewer than in 2006, and the lowest number in a decade.”

But of course, just counting the “leading” studios doesn’t give the full picture. Even the MPAA’s own stats reveal a slightly different picture;

“The total number of films released domestically in 2008 was up 1.8%, to 610 films.”

So, if one casts the net slightly wider (yes, there is a world outside Universal, Warner, Paramount, Sony and Twentieth Century Fox), things look slightly different.

2004 Total Movies Released: 567 Total Combined Gross: $9,327,315,935
2005 Total Movies Released: 594 Total Combined Gross: $8,825,324,278
2006 Total Movies Released: 808 Total Combined Gross: $9,225,689,414
2007 Total Movies Released: 1022 Total Combined Gross: $9,665,661,126
2008 Total Movies Released: 1037 Total Combined Gross: $9,705,677,862
2009 Total Movies Released: 1177 Total Combined Gross: $7,596,626,766
(2009 figures incomplete, total movies scheduled to be released, gross to date)

Admittedly less money seems to be being made per movie, but that hasn’t resulted in less being made – movie releases are set to almost double from 2004 to 2009.

But in the end, Lynton is arguing that more piracy means that less money goes into the studios’ pockets. But in an Ars Technica piece ‘What piracy crisis? MPAA touts record box office for 2007‘, the stats speak for themselves;

“..data that shows the US box office doing its biggest year of business ever in 2007, growing 5.4 percent over 2006 and bringing in $9.63 billion.”

So maybe 2008 was a disaster? Not quite. In another Ars piece ‘What piracy? Movie biz sees record box office in 2008‘, the stats also speak loud and clear;

“Domestic film box offices broke multiple records this year [2008], grossing an estimated $9.78 billion.”

Even the MPAA’s own stats reveal that the “Worldwide box office reached another all-time high in 2008 at $28.1 billion, an increase of 5.2% over 2007.”

I’m absolutely no statistician, but I simply find Lynton’s claims confusing. I can’t imagine that I’m on my own.

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