The Future of Video Competition and Regulation

Joel Waldfogel October 9, 2015

“Digitization and media industries…”

• Usually a tale of woe. Or impending woe.

In video: obstacles to more revenue

piracy  

Trade  restric-ons  

Reality in video is less depressing

Not only no decline. Substantial growth in revenue

1015

2025

reve

nue

(bil)

2000 2005 2010 2015year

US-Origin Box Office Revenue

And  this  doesn’t  count  the  revenue  we  can’t  easily  see:  home  video,  television  

But wait. There’s more.

• Costs have fallen, leading to huge growth in production

Movies  with  IMDb  pages  as  of  August  2013  

No growth in wide-release movies 0

200

400

600

800

1990 1995 2000 2005 2010year/vintage

MPAA movies 500+ screenstheatrical releases reviewed at Metacritic

Theatrical Release

Sources:  MPAA,  Box  Office  Mojo,  Metacri-c  

But  produc-on  outstrips  theatrical  distribu-on  capacity  

Big growth in limited-release movies

How many 2010 vintage movies distributed by channel • Theaters: 550 • Google Play: 620 • Vudu: 811 • Amazon Instant: 1648

From  Instantwatcher.com,  October  8,  2015  

Growing importance of digital distribution

Curated  plaPorm:  4,236  movies  in  US    

Open  plaPorm:    ≈32,000  movie  -tles  

16,566  

590  

A  range  of  models  

Exclusivity

0  

5000  

10000  

15000  

20000  

25000  

30000  

35000  

Movies  and  Exclusivity  

duplicated   exclusive  

Challenges going forward

• Will China open up? •  Interesting effects on product mix & US investment

• Will a distribution platform emerge as a bottleneck? • Data availability for analysis and policy making is a real issue

•  box office is observable, but increasingly important sources are not •  what we can see – production - is great news •  should pleadings require disclosure?

We are living in interesting times