Can Former “Pirates” Fix a Broken Movie Market (in Ecuador)?

Reposting a link to this piece in Ars Technica by Evelin Heidel, Ezequiel Martin Acuña, and me.  Here’s how it wraps up:

The combination of wider distribution and lower pricing has also begun to influence practices of financing. “Right now, traders are becoming investors,” Moscoso said. “Large retailers are becoming producers, distributors are making movies, and thus they don’t depend only on the state to produce films. Here, making a movie used to be like climbing the Everest in flip-flops and a T-shirt. You had to be lucky if you wanted to show your movie in the cinema. You had to have contacts or come from a family with a good social position. If you didn’t have any of that, you’d be happy if you managed to get your film shown once at a cultural center. But now you have the option to sell it in markets and shopping centers, where it will continue to sell.” Continue reading “Can Former “Pirates” Fix a Broken Movie Market (in Ecuador)?”

The End of Chinese Cultural Exceptionalism? Part 3 of 3: Forget It, Jack, It’s Chinatown

Cross posted on China Law Blog.

Part 1: The Ancient History of the DVD is here.

Part 2: Who Wants What is here.

I won’t pretend any expertise on Hollywood-China film politics, but it does sound like it would make for a fantastic dark comedy.  The story would certainly include the profit-sharing agreements whereby Chinese firms are the overwhelming beneficiaries of Hollywood’s growing popularity.  It would include the endless, conflicted efforts of government distributors and censors to damage the Hollywood golden goose in the name of Chinese culture, by suddenly yanking Hollywood hits out of theaters, releasing them on the same day, or bowdlerizing them into (even more) incoherent messes.  It would include the endless variety of Hollywood efforts to appease these capricious gods, whether by throwing Chinese actors into weird extra scenes for Chinese releases, stripping films of Chinese bad guys, launching joint ventures with Chinese princelings, or—allegedly—paying bribes for valuable exhibition slots, which the SEC is now investigating.  Although some Chinese players probably benefit by keeping Hollywood guessing, one should assume that such privileges will eventually find their price. Continue reading “The End of Chinese Cultural Exceptionalism? Part 3 of 3: Forget It, Jack, It’s Chinatown”

The End of Chinese Cultural Exceptionalism? Part 2 of 3: What Everyone Wants

Again, this is jointly posted with China Law Blog.

Part 1: ‘The Ancient History of the DVD’ is  here.

Part 3: ‘Forget it, Jack, it’s Chinatown’ is here.

Although we initially approached piracy an intellectual property issue, we ended up spending a lot of time on the determinants of price and availability in legal markets, and so on questions of media ownership and market structure.  And when we looked at these, it was clear that the structural issue that mattered most was the extent to which legal and cultural barriers sheltered domestic studios and distributors from Hollywood.  Outside India and China, there were very few successful domestic film industries.  Once vibrant examples—in Europe of course, but also Mexico, Russia, and Japan—had become marginal in their home markets and inconsequential abroad.  There are many reasons for this decline.  Hollywood’s mastery of widely-accessible spectacle is a big part of it, of course.  But so too is the advantage of operating from a rich home market, with stronger investment infrastructure and the ability to amortize production costs.  So too is its much more effective control of the rest of the system, from saturation advertising, to the control or manipulation of distribution networks, to the capture of legislation, trade negotiations and state subsidy programs, to an ability to capitalize on the economic volatility of developing-world economies, which has periodically decimated local film industries.  The Hollywood studios do all of this better than anyone else.  Whether Transformers 4 is any good or not is very unlikely to matter. Continue reading “The End of Chinese Cultural Exceptionalism? Part 2 of 3: What Everyone Wants”

The End of Chinese Cultural Exceptionalism? Part 1 of 3: The Ancient History of the DVD

Dan Harris at China Law Blog invited me to write a post about the launch of the Chinese translation of Media Piracy in Emerging Economies.  There is no China chapter in the report, but of course there are numerous China connections and parallels.  Here’s an attempt to explore those connections, in three parts.  Part 1 sets up the pricing argument that will be familiar to MPEE aficionados.

Part 2: What Everyone Wants, gets into film exhibition and market protection.

Part 3: Forget it, Jack, it’s Chinatown, discusses the politics and future of Hollywood in China.


Our headline finding is pretty simple: developing-world piracy is driven by high media prices, low incomes, and cheap digital technologies—and has not been significantly impacted by scaled-up enforcement.  This is the sort of statement that’s obvious in most developing countries but that is still off limits in most international IP policy conversations, which are driven by the big copyright trade associations—the MPAA, BSA, IFPI, and so on.  As a result, we have a policy debate focused single-mindedly on strengthening enforcement.  But in our view, if you’re really concerned about piracy, you need to ask which of those other things will change: prices, incomes, or cheap tech?  “Income” is a fine long-term answer in some countries but the realistic short-term answer—the one that rights holders can actually do something about—is “prices.”  Let’s take the example of DVD piracy. Continue reading “The End of Chinese Cultural Exceptionalism? Part 1 of 3: The Ancient History of the DVD”

A Behind the Scenes Look at the Making of ‘Kill the Hobbit Subsidies to Save Regular Earth’

The complete (and more concise) version appears on Bloomberg View.

So how much taxpayer money, would you guess, did Warner Bros. Entertainment Inc. need to produce the films based on the J.R.R. Tolkien book? The answer is zero. The studios are investment companies, and the films are almost certain to be immensely profitable.

But now you aren’t thinking like a studio. The real question is: How much taxpayer money can Warner Bros. demand from the government of New Zealand to keep production there (rather than, say, in Australia or the Czech Republic)? That answer turns out to be about $120 million, plus the revision of New Zealand’s labor laws to forbid collective bargaining among film-production contractors, plus the passage of three-strikes Internet-disconnection laws for online copyright infringement, plus enthusiastic and, it turns out, illegal cooperation in the shutdown of the pirate-friendly digital storage site Megaupload and the arrest of its owner, Kim Dotcom.

For keeping Warner Bros. happy, Prime Minister John Key, a former Merrill Lynch currency trader, got a replica magic Hobbit sword from U.S. President Barack Obama and a chance to hang New Zealand’s fortunes on becoming the tourist destination for Middle Earth enthusiasts. What could go wrong?

For the KHS2SRE completists out there, we’ve assembled some outtakes and extras: Continue reading “A Behind the Scenes Look at the Making of ‘Kill the Hobbit Subsidies to Save Regular Earth’”

Crime Inc. Inc.

Growing up in Chicago in the 1970s and 1980s, I have fond memories of watching Bill Kurtis on Channel 2 news. He was sort of a local Walter Cronkite–a personification of the news. At our house, he was on every night.

So I felt some nostalgia when I got a call from a staffer on Kurtis’ current show, Crime Inc., about an episode they wanted to do on media piracy. And also some apprehension, since we’ve been pretty adamant in our work that criminality–and especially organized crime–is the wrong way to look at piracy. But since I’m a regular complainer about press coverage of these issues and an optimist that the debate can be changed, I agreed to help. Continue reading “Crime Inc. Inc.”

The Tree of Life Must Be Watered With the Money of Patriots

In support of The Tree of Life‘s Oscar campaign, and in an effort to explain the broader rent seeking practices behind SOPA/PIPA , and in recognition of all the new visitors to the site because of Meganomics, and finally in the hope that we can collectively beat back the the threat of a publicly-subsidized Warhorse sequel…

We are re-releasing the underappreciated The War Between the States (to Subsidize Hollywood) Tetralogy, featuring:

Followed by deeper explorations of the growth of public subsidies for Hollywood in:

Many consider The Revenge of Swamp Shark, starring Brad Pitt, to be the most moving of the series.

And for those looking for solutions (to the problem of public funding of blockbusters), a modest proposal from a prior trilogy:



The War Between the States (to Subsidize Hollywood), Part 4: Tower Heist Heist

A mini update: A.O. Scott has a nice review of Tower Heist in which he comments on the fake populism of a bunch of extremely rich guys standing to make a fortune by producing a movie about a bunch of blue collar guys scheming to steal $20 million from a Bernie Madoff stand-in.  And he’s right to note further that the $20 million is chump change in this league.

But unfortunately this isn’t just about symbolism.  Let’s put some numbers on it.

  • Tower Heist cost an estimated $85 million to make.
  • Ben Stiller was paid $15 million.
  • Eddie Murphy was paid $7.5 million.

New York City and state tax payers contributed $10 million, via (overlapping) tax credits.

To pick a totally random example for some perspective, New York City schools just laid off 777 staff, including 438 teacher’s aides.

Ben Stiller is a New Yorker by birth and is involved in a bunch of charitable causes–including  rebuilding Haiti and saving the dolphins.  I wonder how he feels about this? Continue reading “The War Between the States (to Subsidize Hollywood), Part 4: Tower Heist Heist”

The War Between the States (to Subsidize Hollywood), Part 3: The Revenge of Swamp Shark

I know you want to hear about Swamp Shark, but let’s stay highbrow for a minute. I promise a shocking revelation if you make it to the end.

A couple months ago I was leaving the wonderful State Theater in Traverse City after seeing Terrence Malick’s The Tree of Life. And I was thinking, yes, Malick is a national treasure, but Brad Pitt is beginning to make a decent case for that too! His filmography is full of strong performances in good and/or ambitious movies–at least from the mid-1990s on. He has been in relatively few turkeys and a number of great films. And he’s now producing ambitious movies like The Tree of Life and the upcoming Twelve Years a Slave (and some zombie apocalypse thing).  He has also done a lot of charity work and taken on post-Katrina New Orleans as a personal cause.   All told, it’s not a bad answer to the question of what to do with fame and fortune.

So far so good.  But…. Continue reading “The War Between the States (to Subsidize Hollywood), Part 3: The Revenge of Swamp Shark”

The War Between the States (to Subsidize Hollywood), Part Two: Wisconsin’s Public Enemies

Expanding on the last post about the growth of US state subsidies for film production, this awesome 2009 powerpoint presentation from the Wisconsin Department of Commerce did not get the attention it deserved!  Here are some highlights:

The Wisconsin tax credit program for films went into effect in 2008. The Johnny Depp film Public Enemies was one of the first beneficiaries. Continue reading “The War Between the States (to Subsidize Hollywood), Part Two: Wisconsin’s Public Enemies”