So lobby right alongside the. As noted (but ignored) earlier this week, Mark Zuckerberg is in the process of setting up a Tech PAC. http://online.wsj.com/article/SB1000142412788732410520457838...

Do I believe that the major studios would have a honest to goodness discussion regarding copyright and piracy antagonism? No. The studios would rather pay for laws like the Sonny Bono copyright extension act, or slip the US a SOPA.

I'm offering you a communication channel to studio executives right now. I post regularly about these topics on HN. How about telling me what you think might be a better business model than the existing one? right now, film studios depend on DVD sales to make their investment back, because relatively few films break even at the box office; when you see those big numbers for weekend grosses you have to recall that over half of that revenue stays within the theater chains (film studios are forbidden by law to operate their own chains [1]), and up to half half of the cost of producing a film is in the marketing campaign, which has to be spent before knowing how the film will perform. So rare are box-office profits, in fact, that there's a saying within the film industry that a theatrical run is basically the marketing campaign for the DVD - people are much more likely to take a chance on renting or buying a movie that they know was in theaters (even if they didn't go to see it in a theater). The difficulty and expense of promoting a theatrical run is what distinguishes a film as a 'real movie' in the eyes of consumers. You could make the most awesome little film ever, but if you launch it straight to video your chances of finding an audience are pathetically low - not quite zero, but close enough that you'll have a hard time raising any money.

So there's the problem: you need a strong brand to be perceived as a 'movie' and make your money back in the secondary market (DVD sales and streaming), but it's hard to get that strong brand without spending a lot of money up front on marketing or waiting years and years on the off-chance that you'll build an audience through word-of-mouth. If you finance the production of multiple films, your winners are going to subsidize the losses of the underperformers, even after all the 'Hollywood accounting' tricks. It's a pretty tough industry, which is one reason that every Oscar ceremony includes multiple speeches about never giving up no matter how long it takes.

Now the problem for Hollywood is that piracy is almost all downside risk; you can offer your film for free on the torrents and use that to build an audience, but that only works if your production costs are very very low. Past a few thousand dollars, you'd better have a plan for how you're going to recoup the money. In the music industry, the new model is that you give away the music or sell it very cheaply, and make the money back on live performance, because people will pay a lot of money to see their idols perform in person. (This kinda sucks if you are the sort of musician who doesn't want to or can't easily play live, but that's who arts grants are for.)

Unfortunately, that model doesn't work for movies because the vast majority of films do not translate well to stage performance; and it is also true that very few people will pay to buy a movie theater ticket or purchase a DVD of a film they've already seen for free. Within the industry, this is a particular problem for actors: an actor who does to many TV shows stats to see a decline in his/her bookability for film roles, because many years' worth or aggregated data suggests that people are reluctant to buy tickets for actors that they're used to seeing for nothing on TV - Tina Fey is the latest victim of this phenomenon. To quote an entertainment writer [2] 'Hollywood Boulevard is littered with the corpses of TV actor careers that almost were.' TV is a ghetto, and I promise you that the Internet is even more of a ghetto.

Because the barriers to entry are so low on the Internet, the residual income prospects for film producers are also very low - much worse than for musicians, because the cost of producing a film is much higher than the cost of producing a music recording. The most expensive album ever produced was Guns'n'Roses Chinese Democracy, which took 15 years and the breakup of the band before making it to store shelves in 2008 [3]. Total cost? $13 million. That's the worst fiscal trainwreck in music industry history, but by Hollywood standards that's a typical budget for an Indie hit with a famous lead and two character actors. Big Hollywood projects routinely risk 10 times that amount.

Now when you consider that even conservative estimates of industry income lost to piracy are measured in billions, there's a lot of pressure on the MPAA from producers to stem those losses. Now I hate Disney's copyright lobbying just as much as you do, if not more, but that is not the fault of the individual movie producers whose movies fail to break even. But tech people don't like legislative approaches, don't like DRM, and frequently refuse to give the film industry the time of day when invited to do so.

If you won't even attempt to engage, why should they? If you could get over your disbelief that the industry would like to discover a solution that works for both producers and consumers, then what would you suggest?

1. http://en.wikipedia.org/wiki/United_States_v._Paramount_Pict....

2. http://www.pajiba.com/seriously_random_lists/9-tv-actors-who...

3. http://en.wikipedia.org/wiki/Chinese_Democracy

4. http://www.the-numbers.com/movies/records/allbudgets.php

You should take inflation into account here as well; a discount rate of about 5%/year is a good rule of thumb.