Wednesday, July 20, 2011

Harry Potter: Record box office is just the beginning of the cash bonanza for Warner Bros.

EL SEGUNDO, USA: “Harry Potter and the Deathly Hallows - Part 2” achieved a record-opening weekend at the box office with $168 million domestically, positioning it to outperform “Deathly Hallows - Part 1”, which earned a total of $295 million after an opening weekend of $125 million.

IHS estimates that “Deathly Hallows - Part 1” generated $153 million in theatrical revenue to the studio, and expects the title to pull in another $150 million in US video revenue for Warner Bros. from its initial release on Blu-ray Disc and DVD.Source: IHS iSuppli, USA.

The first six films in the series—“Sorcerer's Stone,” “Chamber of Secrets,” “Prisoner of Azkaban,” “Goblet of Fire,” “Order of the Phoenix” and “The Half-Blood Prince” — shipped an estimated 89 million video units in their initial releases to the US video market during the past eight years, as presented in the table. This single revenue source more than covered the total estimated production budget of $1.4 billion for the entire film series, which includes an IHS Screen Digest preliminary budget estimate of $260 million for “Harry Potter and the Deathly Hallows - Part 2.”

Even with the recent declines in US packaged video sales, a major hit can still match the theatrical revenue to the studio when it arrives on video some four months later. The only thing that might keep the initial US video release of “Deathly Hallows - Part 2” from matching—or exceeding—its domestic box-office revenue for Warner Bros. is if the theatrical total pushes much past $500 million. Once a film reaches those exalted levels, it becomes hard for video sales to keep up.

“Beyond that initial video release, the ‘Harry Potter’ series will continue to sell to new generations of kids for decades to come,” Saxton said. “It used to be that only Disney had such evergreens, a fact that prompted all the studios to jump into the animation business as the home video market developed. But ‘Harry Potter’ video sales will likely prove far more lucrative than those of other children’s franchises.

“First of all, there is the book, as well as merchandise and theme park support to help keep interest alive, though other franchises have some or all of that. However, the real difference is that once a kid is hooked on the first book and begins to beg his parents for the movie, Warner gets that sale—and almost inevitably, seven more soon thereafter.”

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