Here’s a recent report on Blue Ray sales vs DVD:

http://nobosh.com/sr/sales-of-blue-ray-digital-downloads-up-big-in-q109/216949/

Blue Ray sales doubled in the 1st Q of 2009 while DVD sales dropped 14% over the same period last year. That seems like there’s more than an offset until you look at the real numbers quoted in the article. Blue-Ray doubled to $230 million. That means an increase of $115 million over the year. DVD sales dropped 14% to $2.9 billion, which works out to a decrease of about $334 million. In the aggregate, there was still a decrease of over $200 million in sales of physical product. The precarious state of the economy is slowing the consumer’s transition to Blue Ray, and the availability of digital downloads is making inroads, too. Download revenue was more than twice the amount from Blue Ray for the quarter.

Let’s get some of the terminology straight, too. There’s no such thing as “box office profit.” What has gone up is box office “revenue” – the amount of money made from ticket sales, before deducting any costs. You only get profit after deducting your costs from your revenue. The revenue has gone up, but the number of tickets sold has remained steady, and, recently, shows signs of starting to decline over the past year’s numbers. This means that the record breaking revenue is more a function of ticket inflation than anything else. Keep in mind that half the box office revenue doesn’t make it back to the producer; half goes to the distributor and the exhibitor. It has been many years since Hollywood depended on box office revenue alone to make a profit. Home sales (tape, disc and download) and TV licensing revenue has become critical for the studios to show a profit.

There’s no doubt that the industry is using filesharing as a scapegoat, but there’s a real reason they’re looking for a scapegoat; the projection on the numbers isn’t good. The Motion Picture Association of America is in the same as boat as the Record Industry Association of America; all the laws in the world aren’t going to prevent filesharing. All the DRM schemes aren’t going to stop filesharing. All attempts at restricting access through “throttling” aren’t going to stop filesharing. They both have business models based upon creating demand through artificial scarcity for their product (limiting how and when you can access it). Copyright laws gave control of access through control of distribution, which only made sense as long as you could control distribution. Copyright no longer works as a functioning part of the business model when you can’t control distribution. As the record industry learned, you end up spending more time and energy enforicing your rights than you do actually making money, and that’s not good for business.

But the industry believes it cannot abandon copyright because they have so much invested in it. Imagine the successful anvil salesman who books a ticket on the Titanic as a reward for years of successful selling. When the ship starts to sink, he faces a dilemma. He can jump overboard without carrying anything and maybe save himself, or he can jump overboard carrying his suitcase full of sample anvils because they have made him a big success in the past and most certainly drown from the burden carrying him down. You and I can see the wisdom of going empty-handed, but we haven’t made a penny from holding onto copyrights. We have nothing invested in copyrights, so their presence, and the knowledge of their cost, doesn’t affect our thinking. We know how the story has to end. They think they can get somebody to declare a new ending in which they live happily ever after. They’ve got as much chance of getting Congress to repeal the law of gravity that is going to send that suitcase of anvils to the bottom of the sea.

Here’s a recent example that demonstrates the difference:

Viacom owns Paramount Pictures. In April, Viacom announced that, in the first quarter of 2009, “filmed entertainment revenue” fell 5%, while the box office receipts, which are only PART of “filmed entertainment revenue” rose 15%.

You can find the press release here: http://www.huffingtonpost.com/2009/04/30/viacom-earnings-fall-34_n_193489.html

That article also notes a 9% drop in “home entertainment” (DVD) sales, which was the second element I noted.

It got worse for Paramount. In the second quarter of 2009, they lost $25 million for Viacom.

Columbia Tristar made money for Sony in the second quarter only because they sold assets, including their share of the Game Show Network. The movie division itself lost money.

You can Google the names of studios and the word “profit” and the year 2009 for more of the same bad news for just about everyone.

So, you can see, there’s no misleading going on. When the studios crow about record box office receipts, they’re telling the truth. They just tend to overlook the fact that ticket price inflation has contributed a lot to the high numbers. And they really don’t mention that production costs have skyrocketed on the biggest film draws, which reduces profit marging immensely, but certainly, there are record receipts just the same (although only half that money reaches the studios, with the rest going to distributors and exhibitors.)

But the numbers cut the other way, too. Ticket sales are up (although the number of fannies in the seats haven’t grown), but so are those costs, and people aren’t buying DVDs like they used to. DVD sales dropped 5.5% last year, according to one study. Sales numbers were flat in the first quarter, 2009, but actual revenue was down another 5.3%.

http://www.dvdinformation.com/pressreleases%5C2009%5Cfinal_1Q09%20release.pdf

There’s plenty more in the way of support for the things I said in the first post. You ought to be able to find a lot of it for yourself. You don’t have to take what I say as fact, but I expect you to do more than just doubt me. Find out for yourself.

I am not happy to take much of what your stating as fact.

I’m betting “we’re hurting from filesharing” really means “we’re paying too much to actors, and going over the top with violence, explosions, special effects, nudity, etc… and rather than say it costs to much to give you shock and awe or eye candy, we’ll blame it on filesharing”

This needs really to be proven. Studios have the last three years anounced that they had records sales, year after year… Who is misleading here?