class notes for friday, november 5, 2010

What is the “movie business?”

So what are they afraid of?

Becoming the next music biz

Don’t follow the money

Revenues are UP

Attendance is DOWN

Don’t follow the money

Summer 2010 Revenue:$4.35 billion

(+$100 million compared to 2009)

Don’t follow the money

Summer 2010 Attendance:

552 million

(lowest count since 2005)

So what’s the problem?

• $15: LA/NYC ticket prices

• $10: Coke & Popcorn/candy

• $4: Parking

For two people to go to the movies it can easily cost $50+

Netflix: The New Normal

• Accounts for 20% of ALLdownstream internet traffic inNorth America during peakhome usage hours.

• Bittorrent only accounts for8%.

• Only 2% of Netflix subs. are streaming.

It’s not just Netflix

Netflix: The New Normal

• Entertainment accounts for 43% of peak period traffic• 50% of that traffic is used by JUST Netflix!

What about the pirates?

• P2P traffic is falling rapidly.

• By 2009, BT traffic was down 25%.

Watch now

vs.

download now, watch later

The new piracy

CONCLUSION

The movie industry is facing the same challenges as other publishers:

Monetize through distribution innovation