MPAA: “2006 was a bullish year for the film business” ????

So does this mean that all of the gloom and doom about illegal P2P and file-sharing services is a bunch of “bull” as well?.

According to a new MPAA press release, 2006 was a great time to be in the movie biz, domestically, and in particular, internationally, thereby heaping a ton of skepticism upon all of their claims that illegal P2P and file-sharing services will be the death knell of their industry.

Compared to $8.99 billion USD in 2005, the U.S. box office raked in some $9.49 billion in revenues in 2006 for an increase of some 5.5%. The new results show an end to a nearly 3 year-long decline in ticket sales, the number sold of which increased to 1.45 billion. To note, the record for domestic box office revenue was 2004′s $9.54 billion USD.

Global box office sales reached an all-time high of nearly $25.8 billion USD, and increase of nearly 11% from the $23 .3 billion they earned in 2005.

“Last year film audiences around the world demonstrated through strong ticket sales that they love going to the movies,” said Dan Glickman, Chairman and CEO of the MPAA. “Technologies are emerging at a fast pace challenging our industry – filmmakers and exhibitors alike – to work harder and smarter to keep moviegoers coming back for more and I think we are well on our way.”

Yet, is this really the case? Is what he’s saying true?

I’d argue that like any other service it’s a combination of CONTENT and PRICE that determines a customer’s desire to make a purchase. If you put out lousy content and then try to charge your audience $10 bucks a ticket then don’t be amazed if the audience doesn’t show up to fill your theaters. Instead of keeping an eye on what kinds of movies they’re producing, they instead try to blame the evils of P2P and illegal file-sharing for their own failures and shortcomings.

People go to the movies to see a GOOD MOVIE period. I mean it’s not some secret locked away in a Freemason’s safe somewhere that people will buy a movie ticket to see a quality movie. If you have to wonder why ticket sales are down all the while you’re plastering “Legally Blonde 2″ billboards all over town then I think you’re probably in the wrong line of work.

So what movies that have been released over the last couple of years that can give us a hint as to what has occurred in terms of quality of content and box office drawing power?

In looking at the movie titles that were released in each of the last 3 years, as shown below, you can see just why 2004 was a record breaking year in box office sales. Shrek 2, Harry Potter and The Prisoner of Azkaban, Spider-Man 2, The Incredibles, The Passion of the Christ, and Meet the Fockers lured tons of people into theaters because they were movies that the audience felt were actually WORTH SEEING.

2005 was of year of dubious releases that weren’t very good. Sure people showed up for Star Wars III and Batman Begins, myself included but, the rest were duds that were just as overpriced as the $7 dollar tub of popcorn they try to sell you on your way in.

2006 wasn’t anything spectacular either, and I would go so far as to say that ticket sales pretty much road the coattails on the success of one movie alone – the Pirates of the Caribbean sequel “Dead Man’s Chest.

So what about all of the MPAA’s claims that illegal P2P and file-sharing services like BitTorrent are slowly killing their industry? I guess these new figures can finally put that argument to rest.

It’s eerily reminiscent of a study done back in June of 2005 by Felix Oberholzer-Gee and Koleman Strumpf called “The Effect of File Sharing on Record Sales – An Empirical Analysis” that effectively argued that contrary to the claims of the recording industry illegal music downloads have had no noticeable effects on music sales.

The study notes:

Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample. Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album’s weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero.

Furthermore, it reports that 803 million CDs were sold in 2002, which was a decrease of about 80 million from 2001. The RIAA continues to places the blame for any decrease in album sales on the rampant use of P2P and illegal file-sharing services but, the study argues that this could have been responsible for no more than a 6 million album total decline in 2002, leaving no explanation for the remaining 74 million CDs that went unsold.

The point here is that just as the RIAA fails to take in account the quality and the value of the content they are producing and expecting consumers to purchase, so too is the MPAA guilty of the same trappings.

Instead of them both blaming the John Q. BitTorrent user for any decline in revenue, I wish each of them would look in the mirror for a change and try remembering that their successes and failures will be determined by the quality of the content they create and the price they charge you and I for it. Delivery models aside, it comes down to the product and its price.

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SOULXTC: “walkin’ the streets of P2P”