Chapter 803 Is the Box Office Profitable?

The success and influence of the Harry Potter series is unquestionable. With the end of the screening of Harry Potter and the Deathly Hallows, this series has also temporarily come to an end. As a huge industrial chain, many people and companies Everyone wants to continue to get a piece of this series, especially those who are directly involved in the production of the film.

Although it has not been fully released in overseas markets, Harry Potter and the Deathly Hallows has already won a global box office of nearly 1.4 billion U.S. dollars and a North American box office of nearly 400 million U.S. dollars. If Harry Potter and the Deathly Hallows Including the more than US$1 billion box office of Deathly Hallows, the finale alone has received a global box office of US$2.4 billion.

This is undoubtedly a huge sum. Anyone would think that the combined box office of the first and second parts of Harry Potter and the Deathly Hallows will inevitably generate huge profits.

However, how much did the film cost to produce? How much does publicity cost? What is the distribution cost?

The outside world does not know the specific amount. Only the executives of Duke and Warner Bros. know how much the film, which is divided into two parts, actually cost.

Did the movie box office make a profit?

Of course it made a profit,

In an office of Warner Bros., Jamie Johnson, who is in charge of the company's publicity and distribution business, said bluntly to Duke and others, And it's a huge profit.

Duke sat on the sofa, frowning and thinking all the time, barely speaking.

Robin Grande, who is actually in charge of this series, reminded, According to the contracts we signed with actors such as Daniel Radcliffe and Emma Watson, they can enjoy the box office profit share of this film.

Because of the split of Harry Potter and the Deathly Hallows into two parts, and the filming and production of the two parts together, the Harry Potter studio has not paid any box office share to the actors, but has to wait until Harry Potter and the Deathly Hallows Liebert and the Parts of the Deathly Hallows are counted together after the screening.

Doug Walter, the CEO of Warner Bros., looked unhappy, If we follow the contract, we will lose more than $150 million in revenue.

Anyone who sees such a large amount of profits from his company being divided up will not look good.

We're doing what we're contracted to do,

It is against the law to violate the contract, Duke said while knocking on the armrest of the sofa, But how to do it...

He didn't go on. They just looked at Doug Walter, Robin Grande, and Jamie Johnson present here, and they all nodded tacitly at the same time.

As early as when they signed the box office profit sharing contract, they formulated relevant strategies.

There are many sources of income for a film, and the box office share is only a small part, but it is amazing enough to put it on the two films of Harry Potter and the Deathly Hallows.

Actually, according to the budget and estimates of Warner Bros. Either of the two Harry Potter and the Deathly Hallows films will recoup their money at the box office as long as they gross more than $526 million worldwide.

It can be said that $526 million is the break-even point of Harry Potter and the Deathly Hallows Part 1 or Harry Potter and the Deathly Hallows Part 2.

The break-even point is an important indicator for major Hollywood studios when formulating budgets. They will estimate the possible income range of the film based on factors such as the investment, genre, and lineup of the film. Then reflect on how much investment in the film should be controlled, but if the investment is limited, many stars and marketing resources may not be available, which will directly affect the income.

therefore. The studio needs to repeatedly consider between the budget and estimated income to find the best break-even point.

In fact, in the two films of Harry Potter and the Deathly Hallows. The largest investment is publicity and marketing expenses.

Now in Hollywood, the distribution of mainstream movies has turned to a broad and intensive model, often spreading on thousands of screens at the same time, but the release time is usually only a dozen weeks. In order to cooperate with this distribution model, distributors have to carry out a fierce advertising campaign to rush audiences to theaters in a short period of time.

According to the report of the Motion Picture Association of America, in 2010, the average advertising cost of each film of a Hollywood film company has reached 35 million US dollars, and TV advertisements, newspapers and magazines, billboards and the Internet have all become the propaganda positions of Hollywood films.

Production costs are another big expense for Hollywood movies, which are usually divided into offline costs (mainly referring to the remuneration paid to technicians and logistics, equipment and maintenance costs required for production) and online costs (mainly referring to Remuneration paid by the management and creative staff of the film, including producers, screenwriters, directors and actors, etc.).

In the two films of Harry Potter and the Deathly Hallows, director David Yates and the main actors are paid in the form of advance payment + box office profit sharing, and each person can get a certain amount first A lot of advance payment, and then get a share according to the profitability of the movie box office.

Take director David Yates as an example. As a director, he can get an advance payment of 10 million US dollars and get 4% to 8% of the profits of the film, depending on the level of the film. The level of profitability, just like Duke's contract, he also signed a step-by-step sharing contract.

The difference is that Duke's contract involves all the income of the film, and David? Yates is only a share of the box office profits.

In addition, when the film reaches the break-even point, David Yates can also receive a reward of 500,000 US dollars. This step-by-step revenue sharing method for core creative personnel has become a common practice in Hollywood blockbusters, because it can encourage the creative personnel on the one hand. More dedicated investment, on the other hand, can also avoid excessive early investment.

However, Harry Potter Studio signed such a contract with them more than to avoid excessive upfront investment.

In addition to these, there is another part that will be calculated into the total cost of the film, that is, the union bonus.

According to the agreement reached between the Producers Union and the major Hollywood guilds, each time a film producer uses a film and obtains income from it, it needs to pay a certain fee and share to the Actors Union, Directors Union, Screenwriters Union and other related associations.

It's not just box office, it's all revenue from reruns, TV broadcasts, and so on.

In the history of Hollywood, at the beginning, ordinary film workers could not get a share of the follow-up income of the film, although after the 1950s, the re-screening of films on TV has been able to create considerable economic benefits.

Hollywood can have such a situation, actors and other industry personnel must thank one person. Under the leadership of Ronald Reagan, who was the chairman of the Screen Actors Union at the time, Hollywood actors obtained the right to share the income from movie re-screening, And then extended to other trade unions.

In the following years, with the continuous emergence of new distribution channels, peripheral bonuses have repeatedly become the focus of disputes between labor unions and the producer alliance representing the interests of major Hollywood studios. Several strike actions were launched.

Such as the famous 2008 screenwriters strike.

Contracts signed with Hollywood distributors vary from region to region of the world today, but generally speaking, the $2.4 billion box office generated by the two films of Harry Potter and the Deathly Hallows is the largest among distributors. Warner Bros. will get about $800 million.

Of course, this is not the entire income of the two films of Harry Potter and the Deathly Hallows, but only a small part.

Hollywood films are hugely expensive, and production costs of hundreds of millions of dollars are commonplace, but risks can be effectively resolved through multiple recycling channels.

Today's Hollywood has a very mature film operation mechanism, and has developed a set of expanded window release model, that is, films are released sequentially along different windows such as theaters, audio-visual, TV, new media and overseas markets, so that the top The front window can enjoy a certain period of exclusivity.

A typical Hollywood movie will be released in theaters for a few months first. Although the box office is not the biggest source of income for Hollywood movies, it plays a pivotal role. The value is also greater.

After the theatrical screening, the studio will release the audio-visual products of the film in the form of DVD, Blu-ray disc, etc. As early as 1986, the income of major Hollywood studios from the rental and sales of film audio and video exceeded the box office revenue, becoming the largest important source of income.

After the release of audio and video, Hollywood movies will be released on TV. Last year, the six major Hollywood studios earned US$37.7 billion in revenue by licensing movies and TV series to TV stations.

And in accordance with the profit margins from high to low, the TV window can be subdivided into several levels.

First, pay-per-view, then premium cable, such as HBO, Showtime, Starz and other major premium movie channels, which start broadcasting about 9 months after theatrical release, and studios charge licensing fees to channels based on the movie's box office receipts , The average movie is about 7 million US dollars, and the blockbuster film may be as high as 20 million to 35 million US dollars.

The film will then be licensed to the TV network for broadcast. The window period lasts for several years. Usually, the licensing fee for a commercial film is between 3 million and 15 million US dollars, depending on the investment scale of the film, box office performance and the number of reruns. .

In the end, the film will enter the syndicate market and be licensed to broadcast on local TV channels. In the largest local TV market, a blockbuster film can earn up to 5 million US dollars within a five-year licensing period.

The overseas distribution of Hollywood movies is also generally carried out along this window. It is relying on such a mature window expansion system that allows a movie to generate huge broadcast revenue.

This also allows many movies that hit the box office to recover their investment through other channels.

The income in this area is huge, so Duke and Warner Bros. have always refused to sign a sharing agreement with the actors of the Harry Potter crew other than the box office. Actors and even David Yates, the director, cannot enjoy the profit share in this regard.

The price Harry Potter Studios paid for this was a substantial increase in their box office profit share.

However, the Harry Potter studio has already become an independent company with separate financial accounting, and has also prepared a special accounting method for loss determination. (to be continued ~^~)

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