Movie Executives See Record Profits, Salaries Despite Piracy Fear-Mongering

By Stephen C. Webster

Movie industry lobbyists like to say that online piracy costs their clients billions of dollars every year, and it’s getting worse — but that’s doesn’t quite seem to be the case, according to data released this week by the nonpartisan Congressional Research Service (CRS).

The CRS report (embedded below) shows that the movie industry is doing very well, earning record profits and paying executives more than ever, even as it hires fewer workers than it did just a decade ago.

Although a recent National Crime Prevention Council ad campaign tries to make the point that piracy kills jobs, the CRS found that total gross revenues and box office receipts have doubled in the last 15 years. Grosses went from $52.8 billion in 1995 to $104.4 billion in 2009, while box office receipts went from $5.3 billion in 1995 to $10.6 billion in 2010 — yet hiring still went down.

One thing that has gone up, higher than ever, is executive pay. The CRS report noted that News Corporation paid CEO Rupert Murdoch $33,292,753 in 2011; Viacom gave CEO Philippe Dauman made $84,515,308; Time Warner CEO Jeffrey Bewkes took home $26,303,071; while Disney CEO Robert A. Lger earned $29,617,964. Sony CEO Howard Stringer was at the bottom of the bunch at $4.3 million, having taken a 14 percent pay cut due to losses.

Those salaries are quite hefty compared to the top earners just a decade and a half ago. At Disney, former CEO Michael Eisner’s total compensation was $10 million in 1994, while Time Warner was compensating former CEO Gerald M. Levin $5 million, the CRS reported. Historical data for the other executives was not included.

The CRS report further shows that employment by film studios and related service companies has remained relatively stable since 1998. Though there have been spikes and slumps in hiring over the years, about 374,000 people worked full or part time making movies last year, down from 392,000 in 1998. That’s on the upswing from a low in 2009, when employment dipped just below 370,000.

Despite what the industry’s lobbyists are telling lawmakers, it’s impossible to say whether a minor slump in hiring is really reflective of piracy’s effects. That seemingly proves the industry’s biggest concern is not the Jack Sparrows of the Internet, but rather Netflix CEO Reed Hastings.

“Revenues from the U.S. movie industry’s home entertainment sector have been declining in recent years,” the report noted. “According to the Digital Entertainment Group, an industry-funded nonprofit, total U.S. spending on home entertainment, including movies and television content, was $13.9 billion in 1999. Spending rose to a peak of $21.8 billion in 2004, before declining gradually to $18.8 billion in 2010. The decline partly reflects the shift to less expensive video-on-demand services, such as Netflix.”

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