Mark Gill on the Future of Indie Film
I disagree with Gill when he says that studios need to focus on making fewer movies... but he's right that lower prices for digitally-delivered movies will help goose consumption. In his talk, he touches on the way that prices for DVDs dropped relative to VHS tapes, and that the same will likely happen again for movies in digital form:
When the movie business went from tape to digital, we dropped the wholesale price per unit from $65 to $10. And everyone said: “Oh my god, they’re killing the business. Our profit margins are ruined.” Well, the margin was smaller, but sales exploded. The studios made tens of billions of dollars on the difference. And consumers mostly like what they’re getting. So much so that movies are the second-highest rated consumer value for the money. Behind only chicken. Not so for albums, which are so far down the list you can’t find them.
The next big change will be when we start shooting movies to mobile devices in a big way. The wholesale price will drop again—probably to $3 per unit. But we’ll sell so many more of them that revenue will explode all over again. This has very favorable implications for getting past piracy problems that helped kill the music business: the charge for downloading a film will land on your phone bill. And the moviemakers can hold the phone companies accountable (whereas now internet providers duck and hide when we try to pursue them for what amounts to transfer of stolen goods).