March 20, 2008 | By Hugh D'Andrade

Hollywood's Record Year Shows MPAA's Piracy Folly

To hear the MPAA tell it, Hollywood faces a mortal threat from something vaguely defined as "piracy." The danger is supposedly so great that the MPAA has been lobbying Congress for help -- all the while inflating their numbers to exaggerate the amount of filesharing on college campuses.

But recent news reports show the movie industry has just had a record-breaking year. The box office brought in $9.63 billion, a 5.4% increase over last year. And that's only box office -- if 2006 numbers are any indication, sales from theatrical showings will amount to just 20% or so of overall revenue.

It seems that the threat of piracy isn't so great after all. As Ars Technica put it: "If piracy is killing the movie business, it's doing so in exactly the same way that home taping killed the music business in the 1980s."

The big picture is that the film industry is bringing in big dollars, and getting a bigger slice of the pie almost every year. In part that may be because movie fans can enjoy movies any number of ways, from video rental to pay-per-view to iTunes downloads to Netflix subscription -- and each of those methods makes money for the film industry.

Compared to the music industry, which has suffered an undeniable decline in revenues over the last few years, the film industry is enjoying record year after record year. The numbers show an upward trend in movie revenue during the same period that saw the rise of P2P filesharing networks.

So why the constant panic messages from the MPAA? Paying customers are forced to watch absurd PSAs bemoaning the evils of piracy before enjoying a legally bought or rented film. The MPAA continues to lobby Congress for protection. And they have even begun arguing against network neutrality legislation on the grounds that it would interfere with P2P filtering by ISPs.

The film industry is doing well because it has given the public what it wants -- DRM aside, they've let fans view movies cheaply and in a variety of forms (in other words, they are succeeding despite DRM, not because of it). Now all they need to do is lay off the heavy-handed rhetoric and enjoy their ever-increasing revenue stream.

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