Movie spending on the rise despite piracy fears

Despite widespread concerns in the film industry of a decline, it appears overall, celluloid spending is set to increase.

According to a report released by IHS, global consumer spending is expected to continue to rise over the coming years, with a jump from $61.4 billion in 2010 to $68.9 billion by 2015.

Testament to the bewildering amount of film consumption includes areas such as DVD rentals, Blu-ray sales, cinema tickets and streaming services among others.

The growth arguably jars with the message set out by the film industry itself.

According to IHS, the overall spending on films shot up last year to a record $62.6 billion, a 2.1 percent increase from the preceding year.  A 2.6 percent rise is expected for 2012, with viewers splashing out $64.2 billion in the North America Western Europe, Central and Eastern Europe, Asia-Pacific and Latin America markets.

The research suggests the industry is perhaps not in quite as bad shape as groups such as the MPAA claim.

However, it is clear that the increases are predominantly in the emerging regions. While movie spending is set to increase by a compound annual growth rate of 8.9 percent from 2010 to 2015 in Eastern and Central Europe, in the West the industry will grow just 1.1 percent.

A lower CAGR rate is expected for the US market, which is likely to attain only 0.2 percent growth over five years.

This shows a growing shift from spending in mature and developing markets, and points to some of the problems faced in the UK or US.

The report says there is a continued resistance to the consumption of films online. Digital rentals accounted for just two percent of movie spending in the US, and even less in Western Europe.

It seems that while the industry laments the continued threat of film piracy, online streaming services are struggling to provide an alternative through video on demand services.

Spending on cinema tickets is doing well, though, again, this appears to be more inclined towards developing markets.

The rampant growth in China over the past few years can also be seen in the amount of cinemas that have opened – eight new screens opened every day last year.

Growth in developed countries is also up, with Western audiences still willing to shell out for expensive seats and stale popcorn.

According to PirateParty UK leader Loz Kaye, the increase in spending conflicts with the message given out by the industry, which attacks piracy as a debilitating force on film revenues.

“We have been told all the time that there is a crisis of internet piracy, blighting the creative industries at the moment,” he told TechEye.  “This shows once again that there is no crisis.”

“There has been a huge over-exaggeration on behalf of quite a narrow group of lobbyists,” Kaye said. “We already knew that we hit the £1 billion box office revenues in the UK last year. The film industry is in rude health.

“But still groups like the MPAA are pressing for anti-internet legislation like SOPA and supporting site blocking here in the United Kingdom.  This report shows that the justification for this has no basis.”

He believes that more should be done in mature economies to ensure that growth rates can continue to increase by offering improved services for online viewers.

“Time and time again consumers are expressing a real frustration about how difficult it is to access content, with regional locks,” Kaye said. “That drives people towards illegal downloads.”

“Consequently, the industry has been missing a trick. We can see growth in sales in the music industry is being powered digital outlets.  The government should be encouraging this in their policies,” he said.