They're also the ones squawking loudest now that the value of their capital investment in the machines needed to copy media is essentially 0. Being forced to provide services and be a broker is SO much harder than extracting rent on a piece of equipment.
Publishers generally outsource the business of media duplication and have little or no capital investment in that. The cost of physical reproduction is a small fraction of the launch cost. The marginal cost of a 35mm movie screen print is about $1000. So if you open wide (on 3000 screeens across the US, say) and tack on a bit for promo stuff in each theater (posters, cardboard cutouts of the movie stars to stand in the lobby or whatever) it costs $3-5 million. By far the largest single expense of a launch is advertising, which is typically 50-95% of the production cost. And the largest component of production cost is salaries for big-name actors, which are typically derived from a rolling average of their recent pictures by regressive analysis, and negotiated from there - in other words, the point of having big stars is because of their proven ability to attract film consumers, so their participation serves an advertising as well as an artistic function.
90% of what publishers do is services and brokerage. Your imagination is not at all anchored in reality.
It only a moderate surprise that I'm wrong on this, especially since it was a short and poorly thought out comment. Are you aware of a good source that could familiarize me with some of these things so I can be less dependant on my imagination and more dependant on facts?
To summarize my thoughts from other comments here, I'm unconvinced that creators have a moral right to control the ways people use something that they've put out there, and I have a pretty strong idea(which given this comment and a few more of yours elsewhere I seem to need to review), that Publishers(which includes Studios, Labels, Producers & so on), add very little value, which I agree is in marketing and other services.
My impression was that what a Publisher does is largely extract rent from various investments they have made in various kinds of connections, or physical facilities, and that they maintain this position by excluding people who don't buy into their particular way of doing things. While this isn't "bad" or "wrong", that impression makes it pretty difficult to sympathize with what I perceive to be a sudden increase of market discipline and pressure for them.
It's really hard to identify a single work that sums a whole industrial sector. Even my line of work, in film, is hard to sum up - not least because the entertainment industry glamorizes and celebrates success as a part of making its own output desirable, leading to a distorted public perception.
In a nutshell, it works like this: producer commissions or finds a great script, makes a lot of phone calls, tries to get talented actors/directors involved by signing loose contractual obligations ('letters of intent' to participate if production elements and finace meet certain targets by certain dates), then tries to raise money by pitching the 'package' of great script + bankable talent. Producers partner with production companies who partner with studios; the production company typically finances the creation of the film and the studio typically finances commercial launch (as well as some internally produced projects). Less popular fare is often sold in advance to international distributors on the strength of the package in order to underwrite the production finance, more popular stuff is sold as a function of its box-office performance.
Studios quapublishers do extract rents, but the packaging, production, and launch of a film is a combination of very high-risk financing, very aggressive contractual negotations, and huge logistical problems, and it's hyper-meritocratic for all but the very top executives (ie the heads of the studio conglomerates, who are running multibillion corporations doing everything from films to theme parks to action figures to...).
what I perceive to be a sudden increase of market discipline and pressure for them
Well let's face it, producers of other goods and services don't have to deal with zero marginal cost piracy - of course they have a lot of competition but manufacturing or delivering a good or service in most fields has a bunch of minimal physical costs, compared to a perfect digital copy that can be produced for essentially $0.
Besides that, they're already subject to a great deal of market discipline - the film market is massively, massively competitive. think about it, there are hundreds of new products launched every year and they're largely judged on the first few weeks of their sales performance. Take a look at this: http://boxofficemojo.com/yearly/chart/?page=1&view=releaseda...
Out of 665 films released in 2012 you'll recognize most of the top 100 from seeing them advertised, maybe 10 or 20 of the second 200, and virtually none of the other 465. A few make megabucks, the top 100 all make at least $25 million (so more likely than not they broke even or better), but outside the top 200 very few make even $1 million (that's revenue, not profit). I mention this price point because $1m is about the minimum production budget to get a theatrical release in the first place. If your film cost less than that then it's not happening without very hefty amounts of both talent and luck. About half of films don't even break $100,000 in revenue; the theatrical release is to make them eligible for award nominations and establish a minimum quality threshold to attract the attention of a secondary (video, streaming, maybe TV) market distributor.
Most films, like 80% or more, lose money. It's not necessarily because they're crap (although many of them are), but often they have limited or specialist appeal. Most distribution deals are for packages of films, in which the revenue from a marketable film outweighs the inevitable losses made by other films in the package, but helps to recoup their production costs. Yes, this is a drag on the economic performance of the more marketable films, but everyone accepts it because if every film had to be sold on its individual merits most would never succeed and fr fewer films would get made, which would significantly raise the barriers to entry (already quite high) and significantly reduce the stream of incoming new talent.
It's a much more complex ecosystem than it might appear from the outside, and much more driven by love of the product that might at first be apparent. To characterize the industry by the negative aspects of big players like Disney, sony etc. is like saying retail is bad because you dislike Walmart or Amazon, or software is bad because you don't like Microsoft or Electronic Arts.
Thank you for this overview. I greatly appreciate it. I'll have to read it in more detail when I have a moment, it is a rare treat to receive perspective like this from an insider.
To characterize the industry by the negative aspects of big players like Disney, sony etc. is like saying retail is bad because you dislike Walmart or Amazon, or software is bad because you don't like Microsoft or Electronic Arts.
I try hard not to do this.My impressions were formed from film class I took in high school. It was a really nice film class funded by Spielberg, who sent an employee out monthly to teach us things and help us problem solve issues on our films. There was lots of Q & A, and several frank discussions about funding and what it would require to make our films eligible for sundance or other festivals. I was assuming that gave me more insight into the middle of the pack than I actually have, and it was probably before the impact of illegal sharing had fully shaken out.
