Inside Popcorn Time, the Piracy Party Hollywood Can't Stop

You're also significantly overestimating the number of folks who actually installed Windows themselves, let alone who did so with a pirated version. Most Windows installations are OEM preinstallations, and Microsoft has been well aware of this (and actively encouraged this, albeit being dinged in the process for violating the Sherman Antitrust Act).

This might happen at some point but they certainly haven't reached that point yet. Apple revenue is still growing tremendously YoY in China. [0]

[0] http://techcrunch.com/2015/04/27/apples-revenues-in-china-so...

It is easier to do a feature film and a whole TV series, because while your props, costumes, sets etc. can be reused and things do speed up a bit with familiarity you're still looking at spending maybe $200,000/week in salaries and overhead. Drop me a line if you really want to know more about the production side. I'm thinking of writing up an e-book or something, partly in anticipation of the SEC opening up proper investment-style crowdfunding and partly to put together cash money for a film I want to do.

On smaller films, yes and no. What you'll see is more of a bimodal distribution - the big megastar films like the Avengers or anything with an A-list cast (eg 2 big stars and a few small ones) are not going away - those people know what they are doing in terms of story, production, marketing and so on and the people that work on them are the cream of the industry. Even when the results feel forced (eg some of the Star Wars prequels) they still make their money back many many times over.

And there will still be lots of small budget films, partly because it's more accessible due to technology, partly because people need some way to get onto the industry ladder, and partly because it's addictive. But times are tough budgetarily; to quote on industry exec overheard at the last Sundance, 'what used to be a $10m film is now $5m, what used to be $5m is now $3m, $1m is the new $3m....').

It's important to remember that costs don't scale linearly, but they go up in fits and starts, depending on which guilds and unions the production company has signed contracts with. So if I'm doing my first feature film, I can pay some writer a few thousand for a screenplay, or better, write it myself. But if I want a budget above a certain size I'd be better off with a Writer's Guild of America member (not least to tempt investors, who don't actually know from reading a script and a budget whether a film is going to be any good), and the minimum price for a WGA to turn in a feature script is $92,000. That's even if you write it yourself, eg Quentin Tarantino gets paid to write the script, direct the film, and produce the movie (as he should, because each of those is a full-time job in its own way). So when you make films in the tens or hundreds of thousands budget range, it's OK to ask people to work for free or pay minimum wage and buy worker's comp insurance, but once your budget is over a million your crew costs jump substantially because now the unions want a piece. And while I'm not that big a fan of unions it's mainly because they bring a lot of extra administrative bullshit and some obstructive work rules. The jump in expenses because of extra pay is just what people deserve, because of the inherently unsteady nature of the work, the very long hours and elevated physical risks, and the fact that virtually everyone in the industry does a huge amount of work for free or stupid cheap.

The basic problem from internet distribution, legal and illegal, is not so much the actual downloads in many cases as the fact that it makes revenue very unpredictable for producers and investors, and so the lower end of the market faces constant economic pressure because investors are understandably wary. I expect this to stabilize a bit as Netflix, Amazon, and others start doing more global buys, and equity crowdfunding is finally allowed to take place. But the practical reality for people in the industry has been that internet distribution and the culture of working for free that goes with it have broken a lot of the lower rungs on the ladder. I expect to see demographics within the film industry skew a bit older over the next decade because of this.

And the makers of those films can still monetize by licensing broadcast/distribution rights (i.e. to Netflix or to a non-profit for its "Movie Night" or what have you); from there, one can still get a very good estimate of an earning potential that's actually reliable, rather than one that's entirely dependent on an obsolete business model that's crumbling right before everyone's eyes thanks to the Internet.

That's a nice idea, but you're putting the cart before the horse. You can't license a film that hasn't been made yet unless you have a very bankable package(of stars and other talent), and you can't easily get estimates of earning potential for other films because Netflix and other digital distributors don't publish that stuff - it's much harder to get information about the home video market compared to box office data. Licensing to broadcast or other distribution channels isn't something that just happens automatically - there's a huge, exacting, and expensive list of deliverables requirements, and it costs money to go to a film market or work through a sales agent. Even when everything goes smoothly, it usually takes a small picture a couple of years from when it starts looking for money to when it gets sold, and the sale often simply covers the costs of production.

Frankly, I don't think you grasp the economics here very well at all. Everyone knows the existing industry paradigm is on the way out, and has known that for a good long while. The problem from the industry standpoint is that the internet/tech sector loves disrupting things but is not that smart about monetizing them - witness the large number of tech companies that don't make a profit, and the fact that the main revenue stream for internet companies that do make a profit is from advertising. You know who has taken that to heart and uses that business model in the movie world? Adam Sandler. His films involve a bunch of highly-paid famous people, very cheap production, and crappy wrote-in-a-weekend stories with massive product placement opportunities, for which he takes a salary of about $20m a picture. Unlimited distribution works fine there because the film is basically an elaborate commercial, but it's hardly a good industry model.