DreamWorks CEO: Movie downloaders should pay by screen size Jeffrey Katzenberg, CEO of film studio DreamWorks, has suggested that Hollywood should move to a new pay-per-screen-inch pricing model as movie downloads become more popular. Speaking at the Milken Global Conference in Los Angeles, Katzenberg said that in the next ten years he would like to see the movie industry move to the …
Remember the "rouge" MP3 site that sold tunes by the data volume, in the format of your choosing, and DRM-free? Much easier to mange as no device type info needed, just let consumers choose the image size/quality and price it accordingly.
Oh and the industry might make more money if they turned out better films and less crap remakes. Just my opinion of course...
I'm all for finding new pricing models but the movie industry do need to get a grip of themselves.
A movie from google play can cost 6.99 for SD and 9.99 for HD. What I don't get is its the same film - the actors did no more work, they had to film it in the highest resolution anyway. In fact, surely then going on to make a SD version costs money! The actors/directors/etc got paid the same, the distribution cost difference is negligible and I don't believe the royalties are different either. If they can sell the SD for 6.99 then the HD should be 6.99 and the SD version should not exist. Its this 'taking the piss' that consumers don't like. Plus DRM is a pain in the arse.
If they bothered to look at the music industry and the fact they have on the whole grown up and got over the fact that the odd person pirates stuff, now they sell without DRM because enough people buy it. Its cheap, so taking a chance on an album isn't that much of a problem. Plus I can put it on all my devices with little resistance.
So, if they made films DRM free (happy with some hidden watermark as long as it doesn't infringe on me playing it on anything I choose) and cheap then I'd buy more. If films were all £5 I'd buy 10 times the movies I buy now, because when a film costs me £10+ I don't buy that often.
And thats the strange rub, maybe, just maybe selling them cheaper and giving more flexibility they'd sell a lot more and make a *lot* more money. Stack em high, sell em cheap.
I can't help but think a lot of people pirate because it offers more flexibility and a cheap price point. Its not that people won't pay something - I truly believe they will - but if it becomes a real pain to watch it because of your hardware then of course they will take the path of least resistance.
I really thought the movie companies would have got this by now.......seems we are in for a long wait.
"What I don't get is its the same film - the actors did no more work, they had to film it in the highest resolution anyway."
They're not preparing for that. They're preparing for the ultra-HD crap that will be sold soon. Yes, they do lose out on the $1.99 very heavily compressed phone video streams, but, no-one in their right mind is going to watch a full-feature film on a fucking two inch screen. Not without losing a good part of their eyesight anyway. Their majority market is the high-def consumers.
I've seen them do it on the train.
I've done it myself, albeit on one occasion about four or five years ago.
Found myself stuck on a train which had performed the old British Rail chestnut of stopping between two stations for no apparent reason. All I had to entertain me were vistas of driech, Scottish weather, a set of headphones and a Sony-Ericsson, two inch screened 'phone loaded with only a couple of mp3s, a solitaire game and a few movie files (which I had been transferring between computers using my 'phone's SD card).
I eventually started watching Valkyrie and, despite featuring Tom Cruise, I have to confess that it made the delay a lot less boring.
> What I don't get is its the same film - the actors did no more work, they had to film it in the highest resolution anyway. ... The actors/directors/etc got paid the same, the distribution cost difference is negligible and I don't believe the royalties are different either. If they can sell the SD for 6.99 then the HD should be 6.99 and the SD version should not exist. Its this 'taking the piss' that consumers don't like.
It's not taking the piss; it's price segmentation. I thoroughly recommend Joel Spolsky's explanation of it -- it's a long read, but entertaining and funny. The short version is that the price of a product is not really a function of its cost of production. Everyone thinks it is, yes, but it isn't. (If its price can't cover its cost of production, then the product will simply not be made at all, not sold at a lower price.)
A lot of industries have this problem: small cars cost about the same as large cars to manufacture; children's clothes cost about the same as adult clothes to manufacture; but these products have to be priced differently because of what customers are willing to pay. Katzenberg has identified (correctly, I think) an area in which customers will be willing to pay different prices for the same movie. Seems like a sensible move.
Incidentally, your claim that the actors all get paid the same regardless doesn't quite hold. Actors' contracts include clauses that specify what their work may be used for, how it may be released. So, for instance, my father started getting royalty cheques when the BBC's version of The Forsyte Saga was released on VHS, and then more cheques when it was released on DVD, because my late grandfather was in it and it was made before either format had been invented, so his contract and payment only covered analogue BBC broadcasts, so further releases on new formats required further payment. One of the reasons film actors get such huge payments is that film studios don't want to be landed with any such future liabilities, so their contracts specify that their actors' performances, once recorded, may be used for absolutely anything the studio ever thinks of in the future. So, as studios come up with more pricing and release models like this one, actors' agents and managers will take that into account during negotiations and the actors' fees will increase. The existence of higher definition formats that enable people to have home cinema screens certainly does increase the cost of hiring actors.
What's wrong with remakes? I know there's this popular myth that Hollywood has gone downhill since they started churning out remakes, but it's bollocks: they've always done it. His Girl Friday was a remake. The Philadelphia Story was a remake. West Side Story's a remake. A big chunk of Hollywood's golden age was them just remaking old silent films now they had sound. As for the popular idea that they do it to increase guaranteed profits, that simply doesn't hold up to financial analysis: remakes have higher up-front costs than original films (buying one untried script off a writer versus buying licenses for something that has already succeeded) and are far from guaranteed to be hits. Filmmakers -- hard though this is to believe when you see some of the resultant output -- generally make remakes because they genuinely think they can improve on the original. And sometimes they're right: The Next Three Days is one of the best thrillers of the last decade, and The Thomas Crowne Affair and The Talented Mr Ripley are both far superior to the originals.
All that aside, can anyone remind me of the many remakes that Dreamworks SKG have been churning out? Because I can't think of a single one.
This reminds me of ad execs throughout the last few decades who claim that we should be forced by law to watch adverts and that skipping past them during a recording or ignoring them in any way was somehow criminal.
Corporate Communist Capitalism©®™
Gotta love it.
I thought it was funny how W Bush gave some speech in Europe some time ago where he was trying to soothe the European audience by talking about how they would avoid crass consumerism in some bilateral agreement/action. The speech was obviously not meant for domestic consumption as American culture is built on crass consumerism. It also was ironic in that few families in the world are probably more in love of said consumerism. And to head off any partisan battles Obama is probably even worse because he openly lies about not being the corporate Wall St. whore he is.
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I once tried to watch a catch up programme on the Itv player, all I ended up with was the ***** adverts and never tried the cr*ap option again. If I cannot fast forward through adverts for junk, rubbish or straight false hoods that I will never ever have any interest is buying or seeing again, then I will delist the channel.
Sorry Mr Dream works, I do not know what you are smoking, injecting or drinking but I suggest you go to rehab as soon as possible.
Your output is rubbish and fails to sell due to its lack of merits, I have not been to suffer a cinema experience in more than 10 years, Frankly watching the cr*p at home would take more effort that it could ever possibly justify.
"I once tried to watch a catch up programme on the Itv player, all I ended up with was the ***** adverts and never tried the cr*ap option again"
This happens everywhere. I did the same with TenPlay, which is the online catchup for our Channel-10 free-to-air network here in Australia. I had just missed a segment at the end of current affairs type show, so thought I could see it online.
I could certainly fast forward through the program material, but not the ads. And since what I wanted was right at the end, I would have had to sit through 15 minutes worth of ads, just to watch a five minute segment.
I didn't. I would have sat through one ad break, but 15 mintues straight for a five minute segment? Fuck you Channel 10. And the horse you rode on.
Now I record everying on the PVR, and watch at my own leasure. Skipping the ads of course. NOW they know why they're losing money hand over fist.
Oh ITV player is crap....
4OD, and iPlayer (and thank you iPlayer for finally letting my listen to radio with the screen off, took you long enough!) are pretty much the only two catch up services I use, other than that I recored of FTA Satellite and transfer to my devices!
Its a good thing that those that make our hardware don't make our media content for the most part. There is Sony but look what happened to their hardware sales after they start letting the media division set the terms. 15 years ago Sony was where Samsung is today. A cautionary tale.
I don't know about the rest of the world, but here in the US, the money paid for Movie Tickets goes pretty much 100% to the Studio and the Distribution chain.
The Theater is already making all it's profit on sales of Candy, Drinks & Popcorn.
And, theater attendance is already suffering from poor attendance because too many people cannot afford the costs. There's not much room for any sort of price increases there.
Yep in general outside the theaters sugary water is pretty much cheaper in the US than anywhere else in the developed world (and a major source of the fatty epidemic) and the popcorn as well due to the taxpayer subsidizing massive production of corn (and corn sugar) which grows very well here.
Most varieties of corn aren't popping compliant. There are just a few varieties that will do it. Regular corn combusts rather quickly if exposed to popcorn corn popping conditions.
There are most certainly lots of corn subsidies here but those are pretty much for all types of corn except popcorn. A farm can certainly receive subsidies for growing popcorn if they want to, but the economics are all screwy. You can make a shit ton more money selling non popcorn corn. The popping corn supply chain is perpetually packed to capacity, so there's no room for new popcorn corn farms. Just thought I would share.
Yeah that sounds right. Knew all about popcorn being a special variety as well (in addition to sweet corn we eat being different than the field corn we feed the cattle) growing up like I did in Iowa and Illinois (house like a mile away from giant Delmonte packing plant lol) just not as much about popcorn economics. I think most popcorn is grown by a handful of giant corporate ag food companies as well (ConAgra, etc). Still it has traditionally stayed a fairly inexpensive treat but yeah the economics I am sure are screwy like everything else in our weird corporate welfare and socialism but only for corporations economic system.
Similar here in the UK, we have a small luxury (i.e. leather seats and a well stocked bar) cinema near me I frequent, and one of their 'adverts' before the show starts points out most of the money from the ticket prices goes to the movie makers and they run the cinema with profits from bar sales..
After that I promptly did my duty and brought another pint of beer and packet of pork scratchings!
Seriously they could rise the price at this cinema by £3 and still get people through the door, their prices are lower than the local multiplex, which I always feel like needing a shower after visiting!
They post losses because they use Hollywood accounting. By any other standard, they're making more money than ever.
...we can countercharge for when the movie turns out to be derivative formulaic bollocks, with an additional penalty for all the drip-feeding to rabid press droolers who fawn over every snippet (especially "character posters" and casting rumours) and who would declare a polished turd to be the best thing ever.
"My smart phone has a Micro-HDMI port"
The DRM will require that this be turned off.
There will be a different player for each of the studios that go for it. Each will only work with a different set of 5 devices. Like 'Plays for Sure" it will be killed after a couple years and anyone dumb enough to buy anything will be SOL.
They come up with crap like this, UltraViolet, digital copy... remember the DIVX DVD phone home player? The self destructing DVD? From the same people who think putting the "you wouldn't steal a car" ad on a DVD (unskippable) that someone just bought is a good idea.
And they moan when we tell them to pull the other one and mock their great ideas.
Tell them we want DRM free, just like music and they act like we ask them to do something impossible.
I'm guessing by 'screen size' he actually means pixel resolution of the video file. I can see where he's coming from, I wouldn't really want to pay the same for an SD movie I'm watching on a 7" tablet whilst travelling as I would for an Ultra HD movie I'm watching at home. However this value analysis depends upon a tiered pricing model. I suspect the movie industry would make a lot more money if they offered a 'buy once at a reasonable price, download at any resolution whenever you like' option.
Smells worse than a month old dead crab to me. Presumably Jeff will soon be back to explain that TVs will need to incorporate a "tamper-proof" way of ensuring that a film bought at one size can't be simply upscaled. Because otherwise home-taping torrenting upscaling will mean the end of Hollywood.
Although I'd rather not see DRM get any worse, this notion is actually not too surprising.
It falls in line with standard market segmentation practices; it does stand to reason that someone who was going to watch a movie on a smartphone wouldn't be willing to pay as much for it as someone wanting to watch the same movie on a fancy home theater. In the former case, a cheap price makes sense - in the latter case, the price for a download should be about the same as the price for a DVD.
But will monitors have to be redesigned to report their sizes to the computer they're attached to? So if anyone wants a discount for having just a 15-inch monitor, it would only apply if the monitor was bought after 2017? In that case, the notion becomes ridiculous.
"It falls in line with standard market segmentation practices"
Declaring a crook still a crook does not mean it's an improvement, or a thing we should embrace.
Though thankfully, some do still produce good content for a good price and no chase down all potential customers as criminals (those left are diminishingly small now though).
Totally in agreement. If you have a 90inch TV and want to ruin your experience by watching a 480x320 video the choice should be yours. You may have a valid reason for watching content at reduced resolution (say in a window) while viewing something else that fills the rest of your 4K screen.
Likewise if you are total dork and want to dowload 4K video to watch on your 800x600 phone screen so you can boast to your mates, then more fool you.
Payment should be by the resolution you receive not how big you can make individual pixels.
Mines the coat with a phone with built in projector in the pocket.
No, you're not the only one, although there do seem to be very few of us.
Note to angry readers: the bit you're getting angry with is this:
> Katzenberg's plans would require some kind of hardware identifier
... and Katzenberg simply didn't say that at all; El Reg did. And they're wrong: his plans could be achieved very easily via number of pixels, so his plans don't require hardware identification at all. I'm prepared to be proven wrong about this (Hollywood having a good track record of stupidity), but which is more likely? Option A: roll out a cheap and easy plan that involves inventing no new technology whatsoever, is practically unhackable, and will probably be popular and profitable; or option B: the technically tricky screen-size-detection nonsense that has to allow for multiple different manufacturers and standards and situations, will be unpopular because it'll have to impose unreasonable restrictions on customers, and will be hacked inside a week?
Unfortunately, the Hollywood's choice will always be Option B because:
- it includes a mandatory proprietary device/software that will require licensing (= automatic fees)
- it keeps them in the access control chain - the consumer has to ask their permission to play the content (by device or every time - "granularity" may vary) which can be withheld and additional payments demanded
- it provides an excuse to demand mandatory internet connectivity for playback devices (thus allowing system renewability and imposition of new restriction if desired)
- it gives them the tools to legally suppress innovation and competition and to take their sweet time to decide whether and how any newly invented ways of playing their content should be used and charged for.
You could be right of course.
I doubt that you're right about "probably be popular". With Netflix, HBO, Youtube and Auntie Elizas vacation films all being available in Full HD provided your internet connection can handle it, I don't see how this could become too popular. Not before ISPs have ruined Net Neutrality and now Netflix et. al. are forced to implement something similar or be completely fucked by providers.
Oh what am I saying! The free market always leads to the best consequences for the consumers. Never mind me - it's 2pm and I haven't had a single cup of coffee yet!
I'm suprised no-one mentioned this before.
It most likely priced by res.
Given he's looking 10 years forward.
small screen = 1080p = $2
Big TV = 4K = $4
Cinema screen = 8K = $15
Tell you what, I think thats fair. At $4 i'd be buying a lot more films.
But iId want to OWN them, be able to have them downloaded not just streamed from some cloud.
How is he planning to tell if I move my Projector a little further away from the wall in my living room because I've still got about 4 feet of wall space that isn't part of the picture?
Is he going to require Projector manufacturers to monitor the Lens setting to report how large the Room is and how far away the Wall is?
Would we start seeing people buying "Lens Mods" to replace the Factory Lenses?
Maybe measure the responses from our brain cells and neuron pleasure receptors, and charge per pleasurable moments given to us by a particular movie/clip. (By making us Bionics).
Or maybe levy charges on our though processes too and time spent on thinking about a Hollywood movie.
"charge per pleasurable moments"
Hey, that could work - what's more, if they did the inverse and credited your account for moments of revulstion, boredom, and disgust, my wife's and my viewing of 'Watchmen' would have been enough to pay for the next ten years of new releases on its own...
Also expect 50% discounts for one-eyed pirates and up to 20% for short-sighted, color-blind and 10% for those suffering from photosensitivity.
Cheating and pirate viewing will be prevented by DRM chips in glasses and obligatory curtains in viewing room. Contact lenses will be considered DMCA-infringing and their production and sale will be prohibited. Same goes for binoculars.
Looking at what Dreamworks apparently released in the first quarter of 2014 it's not really surprising.
Mr. Peabody & Sherman (Didn't even know what this was till I wikied it)
Need for Speed (because video game movies are always the best. Especially when released 4 months after the latest game)
Then of course there's sales of old film and what not. And surely they'll be going in to the green once How To Train Your Dragon 2 comes out on June 13. Granted it's a sequel, but the first one wasn't bad, so surely people will flock to it - especially them folks with kids.
For an industry named as creative, the executives seem rather poorly placed....
Here is my proposal that will help Hollywood get what it deserves...
1) All cinema releases give the ticket holder a coupon towards the DVD/Bluray copy.
2) 2 viewings, free DVD/Bluray, or online download.
This is already sort of practised with music, in that seeing a band means I can buy their CD outside...
Yeah, you see the problem?
Seriously, if I had the time, money and inclination I would be trying to find ways of suing for psychological distress for some of the awful content foisted upon us.....
Perhaps that is the perfect model? Movie companies "bet" how good their movie is by putting a box office cap on it. Say $10 mill in 4 weeks. You pay price X and get a refund when only Y people*X<10 mill pay for it. Hence if a really popular movie comes out you get no discount they get more cash, and crap movies you will get a discount and them less cash. This should make the movie companies a bit more honest on their promises, although for tardy folks like me who only see movies on planes and Netflix....
Anyone else want to refine this model....? ;-)
P.
"But Katzenberg said the pricing model was essential to ensure that Hollywood keeps on making big bucks from its films, something he sees becoming more and more of an issue."
Well, maybe if the drivel coming out of Hollywood wasn't such a steaming heap of crap, with remakes,and sequels, and prequels and the like simply because there aren't any good writers (or perhaps "failsafe scripts") left, movies might be a growth industry.
Oh, and if you intend it to be a "global" platform, perhaps you could do something about your artificial division of the world into regions, and your gouging of everyone outside of region one (OK, probably gouging them too....but not as much).
Thought you would have learned from your (mis)adventures at Disney, but, oh well....greed wins out....
I don’t actually see something like this being that bad. Why not let the movie be at the cinema for a few weeks then distribute it over services like Netflix? I went off the cinema the day it cost me 30+ pounds to pay for 2 tickets, 2 Juices and a popcorn. Its daylight robbery at cinemas, i want freedom to watch movies but not a year after they have been at the cinema!
Nothing. Or even workable.
Even if they do it on resolution, instead of screen size, all it will do is mean that poorer families watch nothing but 480p on their 1080p TV's, ruining the experience.
This dude shouldn't be working for a movie company if this is his thinking.
...I mean seriously, they blame Mr Peabody that it ONLY MADE $261M worldwide... hello? It's a *&^%$ ANIMATED MOVIE, cost a LOT LESS than a movie an AQ-lister, how come it suddenly made $57M loss??? A DreamWorks animated movie costs $318 MILLION...???
Classic Hollywood tax evasion: http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-dreamworks-animation-earnings-20140430,0,1571191.story
No thanks, I will keep to buying blu-ray or whatever physical medium replaces it for 4K,
I like to OWN my films, not rent them...
I want to be able to pass on my movie/tv collections to my children, so they can enjoy the classics of our era.
And for certain I will never rely on the cloud... Sure I have a UV account, it is handy, but I also have a physical copy of every UV film I have, the Physical copy is much higher quality...
Ok... so this guy is animation CEO....
2012 his salary was $5.24 million with a further $5 million in Dreamworks stock.
He must be crying into his cornflakes every morning. I'm not advocating piracy here by any means, but PLEASE!? If Dreamworks.... (and I'm sure other studios are the same) are concerned about profits or lack thereof, maybe not pay the CEO (and other highly paid staff) in 1 year what would take me more than 200 years to earn?... I'm no 'going to Vegas and counting cards' maths 'wizard', but I don't think it takes a genius to work out why perhaps they might have made a bit of a financial loss in one particular branch of Dreamworks for one year.
No wonder he wants to introduce another pricing model..... it's in his interests to!
THE END
Stupidest thing I've ever heard come out of Dreamworks.
It sounds like Ted Stephens is their think tank go to guy.
Here's an idea, how about I don't pay for any of your films? Hmm, I wonder how that would affect their "profit margins"? These "hollywood execs" seem to forget it's entertainment and we CAN live without it if we choose.
I don't think my life will be diminished if I don't get to see Toy Story 17.
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