The success and influence of the Harry Potter series are beyond doubt. With the end of the screening of "Harry Potter and the Deathly Hallows", this series has come to an end for the time being. As an industrial chain with huge output, many people and companies are thinking of continuing to get a piece of the pie from this series, especially those who are directly involved in the film production.

Although it has not been fully removed in the overseas market, "Harry Potter and the Deathly Hallows" has achieved a global box office of nearly $1.4 billion and a North American box office of nearly $400 million. If the more than $100 million box office of "Harry Potter and the Deathly Hallows" is included, it will achieve a global box office of $2.4 billion in just the ending.

This is undoubtedly a huge number. Anyone would think that the combined box office of "Harry Potter and the Deathly Hallows" will inevitably produce huge profits.

However, how much is the production cost of a video? What is the promotion cost? What is the distribution cost?

The outside world does not know the specific number. Only the executives of Duke and Warner Bros. know how much the cost of this part of the film is to be the upper and lower.

Is the film's box office profitable?

"Of course it's profitable,"

In one of Warner Bros.'s offices, Jamie Johnson, who was in charge of company publicity and distribution, said bluntly to Duke and others, "and it was a huge profit."

Duke sat on the sofa, frowned and thought, and hardly spoke.

Robin Grande, who is actually in charge of this series, reminded, "According to the contract 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 separation of "Harry Potter and the Deathly Hallows" into two parts, and the two films were filmed and produced together, Harry Potter Studio has not paid the actors any box office share, but has to wait until "Harry Potter and the Deathly Hallows" ends and calculates together after the screening of "Harry Potter and the Deathly Hallows".

Warner Bros. Ceo Doug Walter looks bad, "If we do it according to the contract, we will lose more than $150,000 in revenue."

Anyone who sees his company being divided up with such a large profit will not look good.

“We do it according to the contract.”

Violating the contract is a violation of the law, Duke said while knocking on the armrest of the sofa, "But how to do it..."

He didn't continue to say it, but just looked at Doug Walter, Robin Grand and Jamie Johnson present, and several people nodded tacitly at the same time.

They formulated relevant strategies as early as when signing a box office profit sharing contract.

A film has a lot of revenue sources, and the box office share is only a small part, but this number is also amazing enough for the two films "Harry Potter and the Deathly Hallows".

In fact, according to Warner Bros.'s budget and estimates, any of the two films "Harry Potter and the Deathly Hallows" can be recovered through the box office as long as the global box office exceeds 5260,000 US dollars.

It can be said that $5260,000 is the breakeven point of "Harry Potter and the Deathly Hallows" or "Harry Potter and the Deathly Hallows".

The break-even point is an important indicator for Hollywood studios when formulating budgets. They will estimate the possible income range of the film based on factors such as investment, type, lineup, etc., and then reflect the extent to which the film's investment should be controlled. However, if the investment is limited, many celebrities and marketing resources may not be able to be used, which will directly affect the income.

Therefore, studios need to repeatedly consider between budget and estimated revenue and find the best breakeven point.

In fact, among the two films "Harry Potter and the Deathly Hallows", the biggest investment is the promotional and marketing expenses.

In Hollywood now, the distribution of mainstream movies has shifted to a wide and intensive model, often spreading on thousands of screens at the same time, but the launch time is usually only a dozen weeks. In order to cooperate with this distribution model, publishers have to launch a fierce advertising offensive to "rush" to the theater in a short period of time.

According to the American Film Association, the average advertising cost per movie by Hollywood film companies in 21 years has reached $350,000, and TV advertising, newspapers, magazines, billboards and the Internet have become the promotional bases for Hollywood movies.

Production costs are another major expense for Hollywood movies. This cost is usually divided into offline costs (mainly referring to the compensation paid to technicians and the logistics, equipment and maintenance costs required for production) and online costs (mainly referring to the compensation paid by the film's managers and creative staff, 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". Each person can first receive a considerable amount of advance payment, and then obtain a share according to the box office profit of the film.

Take director David Yates as an example. As a director, he can get a prepayment of $10,000 and get a four- to eight- percent share from the profitable part of the film. The level of the share ratio depends on the profit level of the film. Just like Duke's contract, he signed a step-by-step share contract.

The difference is that Duke's contract involves the entire revenue of the film, and David Yates only divides the box office profit.

In addition, when the film reaches the breakeven point, David Yates can also receive a reward of $50,000. This step-by-step income sharing method of core creators has become a convention for Hollywood blockbusters, because on the one hand, it can encourage the main creators to invest more heartily, and on the other hand, it can also avoid excessive early investment.

However, Harry Potter Studio signed such a contract with them not to avoid excessive early investment.

In addition to these, some of them will also be calculated into the total cost of the video, which is the union dividend.

According to the agreement reached by the Producers Alliance and major Hollywood guild organizations, the film company must pay a certain fee and share to the actors' union, director's union, screenwriter's union and other related associations after each use of the film's works and obtaining income.

This is not only in terms of box office, but also in terms of revenue from film replays, TV broadcasts, etc.

In Hollywood history, at first ordinary film workers could not get a share of the subsequent income of movies, although after the 195s, the re-release of movies on TV could create considerable economic benefits.

For Hollywood to have such a situation, actors and other industry personnel have to thank someone. Under the leadership of Ronald Reagan, who was the chairman of the Actors Union, Hollywood actors obtained the right to share income from the film's re-screening and then expanded to other unions.

In the years that followed, with the continuous emergence of emerging distribution channels, surrounding dividends have repeatedly become the focus of disputes between trade union organizations and producer alliances representing the interests of Hollywood studios. In order to increase the proportion of dividends, Hollywood unions even launched strikes many times.

For example, the famous two-year screenwriter strike.

Today, contracts signed between various regions of the world and Hollywood publishers are different, but in general, of the $2.4 billion total box office generated by the two films "Harry Potter and the Deathly Hallows", Warner Bros., as the publisher, can get about $100 million.

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

Hollywood movies are huge, and the production costs of hundreds of millions of dollars are common, but risks can be effectively resolved through diversified recycling channels.

Today, Hollywood has a very mature film operation mechanism and has developed a "window expansion distribution" model, that is, movies are distributed in sequence along different theaters, audio-visual, television, new media, and overseas markets, giving way to the forefront windows to enjoy a certain exclusive period.

A typical Hollywood movie will be first released in the theater market for a few months. Although box office revenue is no longer the biggest source of Hollywood movies, it plays an important and even key role. The higher the box office of the movie, the greater the value of the movie when it is released in the subsequent window.

After the theater screening, the studio will release audio-visual products for movies in the form of DVDs, Blu-ray discs, etc. As early as 196, the revenue obtained by Hollywood's major studios from the rental and sale of movies exceeded the box office revenue, becoming the most important source of income.

After the audio-visual release, Hollywood movies will enter the TV window for release. Last year, the six major Hollywood studios licensed movies and TV series to the TV station and obtained 3 broadcasts. The window period lasted for several years. Usually, the licensing fee for a commercial movie is between 30,000 and 150,000 US dollars, depending on the size of the film's investment, box office performance and replays.

Finally, the movie will enter the syndicate market and be authorized to be broadcast on local TV channels. In the largest local TV market, a blockbuster will earn $50,000 during the 5-year license period.

The overseas distribution of Hollywood movies is also roughly carried out along such a window. It is precisely because of this mature window expansion system that a movie can create huge broadcast revenue.

This also allows many movies that have failed box offices to recover their investment through other channels.

The income in this regard is huge, so Duke and Warner Bros. have always refused to sign a share agreement outside the box office with the actors of the Harry Potter crew. In the actual contract, except for the ratio stipulated by the Producers League and the Union agreement, actors and even director David Yates cannot enjoy the share of profits in this regard.

The price Harry Potter Studios paid for this is that they significantly increased their box office profit share.

However, Harry Potter Studios has long become an independent company for financial accounting, and has also prepared a special accounting loss-making method. (To be continued.)
Chapter completed!