box office

[Jeremy Robinson]

>From Jeremy Robinson

The many recent pots about the box office grosses for 'LOTR' and 'Harry
Potter' and how they compare to 'Star Wars', 'Titanic' and other blockbusters
forget some crucial facts about movie revenues:

1. Adjusting for inflation. Without doing this, comparing the grosses is
meaningless. 

2. Territory: it's crucial to state whether you're talking domestic (US) gross
or global gross.

3. Gross revenue is different from net revenue.

4. Profit is totally different from gross or net revenue.

5. Movie rentals are something else again (in some ways, the best indicator of
a movie's theatrical performance). 

6. Probably the key factor is ancillary markets: home video, DVD, cable,
satellite, pay-TV, network TV, syndicated TV, etc. Here's the kicker: movies
generate less than a quarter of their revenue from theatrical distribution,
and over half from video. That's where the money is. Many movies may not be
the top films of their particular year, but they can do very well on video
(compare video rentals or sell-through charts with theatrical box office). For
ex, the rights to broadcast the first 2 'Harry Potter' flicks went for $130
million, while 'Shrek' has been doing nicely on vid. 

7. And then one mustn't forget the huge area of merchandizing and licensing. 

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'LOTR', 'Potter' and 'Star Wars' are gigantic franchises, but when you adjust
for inflation, 'Gone With the Wind', not 'Star Wars', 'E.T.' or 'Titanic',
comes out on top of the all-time box office lists, and one company totally
dominates the all-time top 20 list: Disney (six movies).