Tuesday, July 11, 2006

Movie Industry Doing Just Fine

Constant stories appear in the press about "flat" movie sales, as if every year should set a new record in attendance and grosses or it's a disaster. Guess what, with the US maxed out on screens, maybe movies are right where they should be -- with attendance blipping up and down and grosses at about $10 billion. Not to worry -- there's still a lot of growth left in the overseas market (especially China). Plus DVD rentals and sales (along with on-demand, downloaded files, etc.) will grow slightly in the next few years as next-generation DVD players take hold. So look for $30 billion a year in "home entertainment" sales of movies and TV shows. Did you get that? Home video sales barely existed in 1980 and now 25 years later it's a massive source of virtually free income that quadruples the intake of movies from $10 billion to $40 billion. Even if movies cost three times as much to make and market (and they certainly do) the rewards are now four times as big. Oh wait, total box office in 1980 was probably more like $5 billion and the overseas market was much smaller. So the rewards today are probably TEN times larger.

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