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industry structure costs revenues

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Presentation on theme: "industry structure costs revenues"— Presentation transcript:

1 industry structure costs revenues
the movie business industry structure costs revenues

2 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)

3 studio power = distribution
why do studios dominate distribution? expertise steady flow of films capital links to theaters

4 movie costs costs steadily rising $60m to $70m+ per movie
$25m marketing for major mainstream film $85m/$170m studio/distributor split

5 cost of some 2000 movies Gladiator $100m MI 2: $100m Grinch: $125m+
Perfect Storm: $120m Dinosaur: $150m

6 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

7 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

8 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

9 controlling costs production outside US (esp. in Canada) exchange rate
incentives proximity

10 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

11 opening weekend mania emphasis on opening weekend marketing push
Friday data Ed Zwick estimates marketing value: USA, abroad improvements in theaters

12 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

13 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

14 word of mouth title opening 2nd Avengers $10m -65% Sphere $16m -54%
Mary $14m -9% W.Singer $19m -23%

15 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

16 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

17 revenues: foreign box office
value of foreign box office @50% revenue overseas strategy action films v. other genres

18 revenues: video, dvd $20b in rentals and sales, 2000 video advisers
2nd chance for a movie distribution (consolidation, options) editing videos

19 product placement advertising in movies does it influence movie?
growth of product development packages movies, television

20 other revenue sources pay per view premium cable network TV
soundtracks merchandising movie sales, dvd


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