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industry structure costs revenues
the movie business industry structure costs revenues
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the major studios Warner AOL/TW (usa) Disney Disney (usa) Columbia
Sony (japan) 20th C. Fox News Corp. (aus) Paramount Viacom (usa) Universal/MCA Seagram (can)
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studio power = distribution
why do studios dominate distribution? expertise steady flow of films capital links to theaters
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movie costs costs steadily rising $60m to $70m+ per movie
$25m marketing for major mainstream film $85m/$170m studio/distributor split
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cost of some 2000 movies Gladiator $100m MI 2: $100m Grinch: $125m+
Perfect Storm: $120m Dinosaur: $150m
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movies: 1 in 5 profitable movie cost us box office Postman $110m $20m
Beloved $73m $26m Babe 2 $90m $22m Titan AE $85m $27m Avengers $21m XFiles $123m $83m
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some winners movie cost us box office B. Witch $.05m $140m Titanic
$550m/$1.3b Something…Mary $45m $180m F.Monty $6m $101m Pvt. Ryan $125m $130m R.Hour $30m
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why so expensive? perceived need for stars star salaries
$20m + for Carrey, Gibson, Ford, Cruise, Travolta, Willis, Williams, Roberts $15m+ for Goldberg, Bullock, Moore efforts to limit star salaries, perks
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controlling costs production outside US (esp. in Canada) exchange rate
incentives proximity
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revenues US box office/theaters $8.5b in 2000
Not enough to generate profits, but basis for film’s success or failure wide release platforming
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opening weekend mania emphasis on opening weekend marketing push
Friday data Ed Zwick estimates marketing value: USA, abroad improvements in theaters
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impact: opening weekend mania
need for stars need for good word of mouth need for simple story need for likeable story (LOP, LCD) audience considerations
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opening weekends Pokemon 2 $50.7m Grinch $55m Charlie’s Angels $40m
Waterboy $39m Toy Story 2 $80m Miss Imp 2 $71m Star Wars/Phantom Menace $61.8m
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word of mouth title opening 2nd Avengers $10m -65% Sphere $16m -54%
Mary $14m -9% W.Singer $19m -23%
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box office, Nov. 16-18, 2001 Harry Potter $93m Monsters’ Inc $23m
Shallow Hal $12.7m $41.3m Dom.Disturb. $5.6m $33.9m Heist $4.7m $14.9m The One $4.2m $38.4m K-Pax $3.3m $45.5m
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value of foreign box office
movie US overseas Titanic $600m $1.3b Ph Menace $431 $491 J. Park $357 $563 Ind Day $306 $506 Lion King $312 $453 Term 2 $204
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revenues: foreign box office
value of foreign box office @50% revenue overseas strategy action films v. other genres
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revenues: video, dvd $20b in rentals and sales, 2000 video advisers
2nd chance for a movie distribution (consolidation, options) editing videos
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product placement advertising in movies does it influence movie?
growth of product development packages movies, television
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other revenue sources pay per view premium cable network TV
soundtracks merchandising movie sales, dvd
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