Your Movie Industry Questions Answered

Dan Glickman

We recently solicited your questions for Dan Glickman, C.E.O. of the Motion Picture Association of America.

In his answers below, he discusses, among other topics, the source of his piracy figures and why the ratings board isn’t the “morality police.”

He also tells us what he thinks of the documentary This Film Is Not Yet Rated, which critiqued the M.P.A.A. ratings board — and initially received an NC-17 rating:

To be clear, Kirby Dick‘s movie was a one-sided and inaccurate view of the system and it should by no means be considered a credible source on the topic.

In the end, Glickman says, the film was part of the reason the M.P.A.A. is trying harder to “demystify” the ratings process. Thanks to Glickman for his answers and to all of you for the questions. Unfortunately, we didn’t get an answer to why so few movie theaters employ variable pricing.

Someday …

Q: What concrete action do you propose to help “rehabilitate” the NC-17 rating?

A: We’re about to celebrate the 40th anniversary of the rating system, so it’s a timely question — and an important one to folks who want to see a diversity of films in the marketplace.

The history is an interesting one. NC-17 was originally the infamous X rating. It was the only rating the M.P.A.A. did not copyright when Jack Valenti, my predecessor, created the rating system. We changed it to NC-17 because X came to be associated with pornography. NC-17 simply means the film is intended for adults only — whether for its depictions of sex, violence, drug use, or other intense situations.

As we’ve seen in recent years with films like Lust, Caution (which received an NC-17), these are wonderful and innovative films that adults want to see. Our partners at the National Association of Theater Owners polled their members, and they overwhelmingly said that they were willing to run NC-17 films in their theaters; so it’s ultimately up to distributors to decide how to release them. I hope we can get past the stigma associated with this rating because it will help bring to this art form an even greater diversity of creative visions.

Q: How did the M.P.A.A. estimate that “$6 billion worldwide” loss from piracy?

A: In 2005, we released the Cost of Movie Piracy Report. This report found that the major U.S. motion picture studios lost $6.1 billion to piracy worldwide. This calculation was based on the number of legitimate movies (movie tickets, DVD’s) consumers would have purchased if pirated versions were not available.

One question we often get is: Do you assume that everyone who stole a movie would have bought the movie? The answer is no. This estimate factors in the fact that it’s not a 1:1 correlation.

Q: What can you do to lower the prices of theater tickets?

A: Yes, movies aren’t the $2 and a quarter they were back in 1977, but if you take that ticket price and adjust it for inflation over the past 30 years, the average national ticket price today would be over $8. Instead, it’s just over $7. In these more challenging economic times, where the buzzword of the summer was “staycation” (vacationing at home to save money), the audience has spoken and movies have proven they continue to be a terrific value and an attractive form of entertainment.

Q: How has profitability of the film production industry evolved over time?

A: Movie making is inherently a risky business. Last year, the average cost to make and market a studio film was over $100 million. Contrary to the perception you might get if you just read the headlines about the big summer blockbusters, 6 out of 10 movies never recoup their original investments in their domestic runs.

Q: According to the documentary This Film Is Not Yet Rated, in the process of appealing ratings decisions made by the M.P.A.A., there is a rule saying that people appealing the rating of their film cannot cite other films’ content. What do you think are the merits of this precedent? And, conversely, what are the drawbacks?

A: Last year, the Classifications and Rating Administration, which oversees the rating process, changed the rules to allow filmmakers to make these arguments in the appeals process. My view is that this was a constructive change — for filmmakers and for the rating system.

Q: How geographically dispersed is the movie industry? Do state or city incentives or tax breaks work to bring production to new locations?

A: It is increasingly geographically diverse, and yes, I do believe that is due in part to the incentives being established to attract this lucrative business. Thirty states now have these incentives, and it’s smart economic policy.

Take The Dark Knight for example. It was filmed in Chicago last summer. Over the course of the 65-day shoot, Warner Bros. created more than 1,000 local jobs which generated $13.5 million in wages. They also spent more than $3 million on hotels, $1 million on catering, and $900,000 on lumber and other set materials. In total, The Dark Knight injected more than $35 million into the Chicago economy in two months. Another bonus? On-location filming is terrific marketing. It’s estimated to boost tourism by up to 54 percent.

Q: How is violence rated in the M.P.A.A. ratings system? What is the fundamental reasoning for sex requiring more censure than violence?

A: The job of each rater is to rate each film as he believes a majority of American parents would rate the film, taking into account sex, violence, language, and other factors.

In addition to the rating, the rating board also provides descriptors that further explain the reasons the film received the rating it did. For example, The Dark Knight was rated PG-13 for “for intense sequences of violence and some menace.” That’s about as straightforward as you can get.

The goal of the ratings system isn’t to censor films; it’s to give parents clear information about a film’s content so they can make decisions about what’s appropriate for their kids and at what age.

Parents have been very clear that these are their decisions — not Hollywood’s or Washington’s. The rating system invites its share of dissent. To a certain extent, this is fairly healthy and to be expected in a diverse society. But it’s important to note that the system has maintained a near 80 percent approval rating among the folks it exists to serve: parents of young children.

Q: How has the documentary This Film Is Not Yet Rated changed how movies are rated?

A: It hasn’t changed the way we rate films. The one thing it did do, however, is help us realize that there was a lot of misunderstanding about the rating system.

I think the most relevant thing that’s changed since the film is that we have made a significant effort to be more transparent and educate both filmmakers and parents about the process. We’ve also, I think, spent more time getting out into the independent film community, walking through the process, really letting in more sunshine, and demystifying the process.

To be clear, Kirby Dick‘s movie was a one-sided and inaccurate view of the system and it should by no means be considered a credible source on the topic.

The ratings are an informational guide for parents — and that’s it. The rating board doesn’t censor films. It doesn’t say if a movie is good or bad. It isn’t the morality police of our society. None of that is appropriate. It simply makes sure parents have the information they need to make decisions as they raise their kids.

Q: Why are box office numbers tracked by gross dollars rather than number of ticket sales? Each year I read: “Hollywood breaks box office records.” But this is largely due to inflation and rising ticket prices. Isn’t this a misleading figure?

A: What the businesses are analyzing with that particular piece of data is the bottom line. But you are correct that ticket sales have been relatively flat in the U.S. in recent years, and we certainly track (and publicly release) those estimates as well.

Clearly, people have more opportunities today to see movies in different ways — at the theater, at home on their TV’s or PC’s, and beyond. My personal view — and the view of most Americans — is that the theater continues to be the best way to experience a movie. But there is more competition. We now typically make more money off of home video than box office receipts, and (of course) there are other forms of entertainment such as video games.

That’s why we’re excited about the growing number of digital movie screens and the coming era of 3-D. The theater, too, is going high-tech, and it’s going to revolutionize going to the movies.

Q: What is the long-term vision of the movie business? Will hundred-seater cinemas still play a central role?

A: We ask moviegoers of all ages about the many ways they enjoy movies. Across every category, they say going to the movies with your friends is the best way to see a film.

Ultimately, audiences make these decisions, but my fervent belief and hope is that there’s room for everyone. Another interesting fact: We asked people who wire their living rooms with plasma TV’s, digital video recorders, HDTV, and all the rest about going to the movies.

What we found is somewhat counterintuitive to what you might expect: The more elaborate the their home theaters, the more they are going to the movies — about 50 percent more each year for the die-hard home theater folks. It’s not the either/or choice people often assume it is.

Q: There’s talk of the music industry beginning to rethink its business plan in response to pirated media. Is the movie industry thinking along the same lines?

A: Yes, absolutely; we have been thinking hard about our approach, particularly when it comes to consumers who, for obvious reasons, we want to maintain a positive relationship with.

There’s no question that a great deal of my job today — both in Washington and around the world — involves linking arms with other major intellectual property industries (computer software, music, and beyond) to shore up the legal foundations of intellectual property rights. I do believe that as this global information economy continues to emerge, more countries will have a shared stake in protecting the power of ideas.

Intellectual property industries account for nearly 15 percent of all U.S. economic growth today, and that figure should continue to grow over time if we get this right. That means jobs and economic health. So we’re moving to improve the laws around the world and, yes, very aggressively to go to court to shut down these illegal sites that distribute unauthorized copies of filmmakers’ works.

But we’re also trying to make a distinction with our customers to focus more on prevention, raising awareness about the costs of piracy to our society. We also understand that to win the war on piracy we need to offer the superior product; hence the emphasis today on enabling more innovative legal choices. So we’re coming at this from multiples angles.

Q: How much does advertising actually prevent piracy?

A: On its own, I don’t know that it would be particularly effective. As part of the much broader global strategy that I mentioned above, it has an important place (raising awareness both of the costs of piracy and the growing diversity of legal alternatives) and gives us an opportunity to communicate with our customers in a more proactive way.

So, yes, public service announcements and advertising have a place; it’s alongside working through governments and courts to strengthen copyright laws, partnering with law enforcement authorities to root out what we are finding to be increasingly organized pirate operations, and ensuring movies are available legally through new technologies.