[yellowapple]

And the hand-over-fist profits from box office earnings, merchandising deals, content/trademark licensing, etc. have been insufficient since... when, exactly?

Those are the places that the Internet Age hasn't really usurped yet. The old "record a theater showing with a camera" trick is nowhere near desirable quality for most people, and piracy does nothing for those hoping to use a particular trademark in order to make money on some product based on Elsa the Snow Queen or Luke Skywalker or Winnie the Pooh or whatever other character one wants to plaster on a backpack or notebook or turn into an action figure. Those are the realms where the future of capitalist film production lies (TV is a slightly different story; merchandising is still an effective monetization strategy, but box office earnings are nonexistent unless you make movie spinoffs (se also: My Little Pony), yet are replaceable with ad revenues in both online streaming and conventional broadcasting, both of which are incredibly popular).

[anigbrowl]

Hand-over-fist profits? Only at the very top of the market. If you're producer of one of the top 50 or so films, yes people are shoving money at you. In the top 100, you probably broke even and people will be shoving money at you when it hits the home video market. In the top 101-200 films, You'll most likely make your money back and enjoy a modest profit.

Outside of the top 200 films? Then your box office takings were certainly under $1 million (except for about 10 films), and more to the point most people haven't heard of your film. Have a look at yearly box office #s on a site like boxofficemojo, and look at some of the other 6-800 films that get a US theatrical release each year. Many good films have box office numbers that are measured in thousands, and remember that box office numbers are gross - as a rule of thumb, only 1/3 of the box office goes back to the distributor, the rest stays in the theater.

What you seem to be overlooking here is that while some films do indeed make money hand over fist, for the many more than don't, piracy is just as big a problem - not because so many people are pirating an obscure or somewhat unpopular film who would otherwise have paid for it (although this is a problem for quite a few films, eg Terry Gilliam's last film had dreadful box office because they didn't have much money to advertise, but was very popular on file-sharing sites), but because piracy makes it increasingly difficult to come up with any kind of meaningful estimate about a film's long-term earning potential. that in turn makes it much harder to raise financing for a film. It's definitely tougher than it was 10 years ago when I got into the business.

http://www.boxofficemojo.com/yearly/chart/?page=1&view=relea...

[yellowapple]

Right, but it's the makers of the big, top-50 films that are the ones that are ridiculously vocal about piracy, not the ones making the small top-200 (or less) films (unless they're flops by the big filmmakers). 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.

[anigbrowl]

OF course it is, they're the ones with the big platform to tell people about it.

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.