Hollywood accounting and Piracy

Why do people pirate films and television shows? It is the burning question that has Hollywood executives and producers alike trying to figure out (despite really knowing why). But is there more to this topic than just accessibility to content, and it’s immediacy? We might as well delve right into this, because you’re going to be shitting bricks.

In the recent article on Kotaku the author Mark Serrels explains how he went about trying to legally obtain a copy of Game of Thrones. And by obtain, I mean watch it through the legal broadcast service in Australia – Foxtel. I mean this guy goes well above and beyond, that it draws you back to an old The Oatmeal comic about accessing the first episode of Game of Thrones.

I too struggled to get access to the episode and I already have Foxtel, it was just really unusable at the only time I really did want to use it. While I was on my conquest to figure out how I was going to turn my ways and watch the new episode legally, the thought of just torrenting the file (and even the three other leaked episodes) crossed my mind.

But why? Why in a world where we do have things accessible to us are we even still contemplating torrenting files?

There is no denying that after the many years, it is embedded in many of our DNA. But honestly it is a representation of what the public want. Immediate access to new content. This is the reason why web series and streaming platforms like Netflix boom so dramatically. The users really like the fact they have the power over when to watch their programmes.

But more on that in a minute. First I want to just take the Hollywood reaction to the notion of piracy as an “industry killer”. Just to be clear, piracy isn’t killing the industry it is in fact showing the perfect business model to adopt which users would actually use.

However, more pressing is why doesn’t anyone talk about how Hollywood is killing Hollywood? Nearly every film ever to be spat out of that crying baby of an industry dabbles in Hollywood Accounting practises whether they use the term directly or not.

Hold up! What is Hollywood Accounting? Rather than rehash another story, here’s Mike Masnick’s explanation from techdirt,

Here’s a hypothetical example of how this could work in practice, using round numbers just to make the point (these aren’t directly accurate numbers, but the concept is). A studio funds A Movie with a production budget of $100 million. It sets up AMovieCo Inc. and gives it the production budget money. The studio then spends another $50 million on marketing and puts that down as an expense as well — though, with some of the big studios, some of this money involves paying itself for advertising on its own properties. Still, even if we assume that’s real money spent, you might think that AMovieCo now needs to make back $150 million to be profitable. But… the studio (which, again, controls AMovieCo completely) then tacks onto all of that, say, a $250 million “distribution fee.” Now, while there may be some money spent on actually distributing the film, the number is almost completely bogus, and much higher than the actual expense for the studio. Very little actual money needs to change hands here — it’s just a fee on the books (a fee they are effectively charging to themselves). And it’s not just “distribution” but a variety of additional charges. On top of that, the studio may then charge “interest” on that money, even though it’s really just lending money to itself. What it all means is that rather than becoming profitable at ~$150 million (the actual money spent), AMovieCo now needs to earn over $400 million before anyone with a cut of the profits sees an additional dime from the movie, thanks to completely imaginary accounting entries on the books.

So here’s an industry that complains that piracy is killing them, and at the same time are shifting money from one pocket to another. Which when you think about it is really unfair to blame pirates for something they are doing to themselves.

How do we fix this problem? Well global releases for starters: release a television show all around the world and have it accessible to everyone without geoblocks. What?! Without geoblocks! Yes, make it available to people who are willing to pay.

Start to streamline services: we’ve seen YouTube rentals, iTunes Store, Amazon Instant, and Netflix all work for content when it hits the shelves. We’ve also seen how hungry people are for new releases like House of Cards or Orange is the New Black when full seasons release at once. So let the consumer have the advantage of seeing the new release in their own home.

Now I’n not saying everything has to be direct to home but open up the idea of delayed releases. Have the cinema have it for a month, and then have it available digitally after that. I would be more inclined to view it while it’s still fresh than six months later when I don’t care anymore. With television, have your app available globally or have access to the file where people have control over when they want to watch it.

If I want to watch it after washing that dishes and it happens to be 7:53pm let me do it when I’m ready, not the current rush everything to be ready by 8:30pm exactly. You can still have your adverts, I think people will be okay with that if the level of advertising is comparable to the price. Let me pause it, pick it up a day later on another device, pretty much just do whatever Netflix is doing because they seemed switched on.

Bottom line on this is don’t play games with the consumer. We will always get what we want. For every takedown notice you issue, another 1000 tutorials on VPNs or DNS bypass companies are being made. Don’t fight the people, just provide them with a usable service – you never know, you may actually get nice things said about you like Netflix does!

Further resources