How HV sales used to turn big box office hits into massive box office GIANTS

[baumer]

Keep in mind, TV rights in North America are 12.5% of the theatrical gross.  That's significant money.

[Hatebox]

There seems to be a direct correlation with how important theatrical OWs have become and how homogenized movies in general have become. The decline of HV can't have helped.

[terrestrial]

Keep in mind, TV rights in North America are 12.5% of the theatrical gross.  That's significant money.

 

Out of my head... aren't the TV... revenue contracts usually calculated/negotiated out of the OW?

Edited January 6, 2015 by terrestrial

[terrestrial]

Only to add as general information

 

Windows of Exhibition for Movies

 

 

 

 Domestic Box Office (Theaters) Initial theatrical release of three weeks to eight months    

 

Home Video (VHS/DVD) Exclusive window of only six weeks before pay-per-view    

 

Pay-Per-View Exclusive window of from two to six weeks before premium channels    

 

Premium Pay Channels (Pay TV) Exclusive window for up to 18 months before network and cable TV    

 

Network (free) and Cable TV Up to 12 to 18 months before syndication    

 

Syndication 60 months on either network television or cable network    

 

Note:    

Omitted from the distribution channels and windows are foreign sales, hotels, airlines, college campuses, the video game sector, consumer products merchandising, and theme parks. Foreign sales usually begin after the initial theatrical release in the U.S. Each territory has different windows for different channels. Video games based on blockbuster movies sometimes earn equivalent revenues as the theatrical release

 

February 2010 research paper

[grim22]

http://deadline.com/2015/01/home-entertainment-spending-fell-2014-deg-1201342148/

 

Home Video Sales Fell In 2014 As Disc Decline Outpaced Digital Growth

Hollywood continued to have a slipped disc problem in 2014: Consumer spending for home video dropped slightly after two years of relatively flat sales according to data out today from DEG: The Digital Entertainment Group. Buyers spent $17.8 billion to buy or rent videos last year, a 1.8% drop from 2013. That follows declines of 0.2% in 2013 and 0.5%  in 2012.

DVD and Blu-ray sales at $6.93 billion fell 10.9% (vs an 8.1% drop in 2013). Subscription disc rentals at $829.7 million were down 18.3% (vs. -19.3%). And rentals from brick and mortar stores at $696.4 million fell 27.1% (vs. -21.4%).  The drop in kiosk rentals, overwhelmingly from Redbox, also accelerated: Sales amounted to $1.81 billion in 2014, off 4.4% vs the 2.2% slide in 2013.

Consumers continued to warm to non-disc entertainment. EST sales at $1.55 billion were +30.4%, a slowdown from 2013’s +47.1%. Subscription streaming at $4.01 billion was +25.8% (vs +33.2%). But VOD outlays at $1.97 billion were down 6.7% following a 4.8% increase in 2013.

 

[terrestrial]

As comparison

 

[bapi]

Frozen with 2nd best-selling album in USA (3.5M copies) and $314 millions from DVD/blu-ray sales (DEC 14). Wonder if that movie could actually make more money than the Avengers...

[bapi]

+1

 

Agreed.

 

 

 

 

Changed viewing patterns/demos would amount to reallocation of revenue from one source to another. So the impact on revenue should be limited. The major reason for loss of revenue is piracy. 

 

Consider the following 2 movies with similar domestic grosses (I understand, they represent different demos/genres):

 

Pearl Harbor: 

 

Theatrical  Gross (Dom): $198 M 

HV Sales (Dom): $263 M 

Pearl Harbor also had a robust video rental gross

 

Thor 2: 

 

Theatrical  Gross (Dom): $206 M 

HV Sales (Dom): $62 M  

HV revenue from all sources (Dom): $100M

 

So a big chunk of the huge disparity i.e. $163 M has to be blamed on piracy. .

I think with fast internet people just don't have enough 'respect' for movies anymore. Few years ago they'd go and spend money so they can rent National Treasure for 24 hours, now you just need 15 minutes to download some DVDrip and y'know it's free.

[terrestrial]

Frozen with 2nd best-selling album in USA (3.5M copies) and $314 millions from DVD/blu-ray sales (DEC 14). Wonder if that movie could actually make more money than the Avengers...

 

For the moment I think all is possible, but Avenger is also still selling and might pick up with sales numbers... when Avengers part 2 and the other future MCU movies get released. In the long run I am thinking Avengers might be stay ahead

[terrestrial]

UK details for 2014 (last column)

 

 

2013 to 2014 comparison

.

Video	Physical Retail	£1,438.2	£1,264.1	-12.1%
	Physical Rental	£148.3	£109.3	-26.3 %
	Digital	£624.8	£807.9	29.3%
	Total Video	£2,211.3	£2,181.3	-1.4%

 

Link includes physical sales numbers for home entertainment (games, music, video,...)

 

http://www.recordoftheday.com/news-and-press/video-games-and-music-sales-score-second-successive-year-of-growth-in-2014

[kowhite]

Out of my head... aren't the TV... revenue contracts usually calculated/negotiated out of the OW?

They are generally based upon total box office, usually based on reaching specific levels.

Except for VOD and PPV, that's just...whatever they sell.

Granted, it's not that simple...you get further out, you can sell as much as you like assuming there's a customer. But those initial big windows are indeed box office based.

[Mango]

- Tangled - 142M$ (seems to have received a boost from all the Frozen love)

Tangled was actually quite the home video beast in 2011 ( well as far as 2011 standards go). Pretty sure it outsold both How to Train Your Dragon and Despicable Me, at least initially. Edited January 7, 2015 by Mangostellar in 70mm

[terrestrial]

They are generally based upon total box office, usually based on reaching specific levels.

Except for VOD and PPV, that's just...whatever they sell.

Granted, it's not that simple...you get further out, you can sell as much as you like assuming there's a customer. But those initial big windows are indeed box office based.

 

 

...in the March 2008 issue of Strategic Finance, the level at which the film performs on opening weekend (Friday through Sunday) influences all downstream contracts regarding digital versatile disk (DVD), international, network, satellite, and cable television, as well as Internet and mobile sales.

 

 

What made me ask the question was the 12.5% of the finals as that seem not to match with the TV right's revenues examples I've read (not researched, only packed in the back of my mind, so it is possible I missed something). I have no doubt about the blockbusters earning more via TV rights than 'smaller BO movies'.

I know I have somewhere a research paper or statistics... that include average TV-rights details and such, but I have for the moment no idea where i did store those (I use - unfortunatedly - a few computers, my datas are a bit wide-spread, it's a real pain.... if I do not remember the titel / source of said paper and trying to still find it again, as I saved quiet some files about a lot of movie business details over the years )

 

So here only a few quotes with general statements:

 

 

Furthermore, depending on the box office gross receipts for an individual film, the cost to the premium pay-TV cable networks can reach as high as $25 million for a box office hit. The average is approximately $6-8 million per film.

In commercial free TV markets, films could be licensed to the highest bidder and can fetch up to $5 million in some of the largest TV markets.

 

If the posted by Baumer 12.5% (that percentage does sound familiar to me) gets up to $25m = is the max. than $200m would be the max possible final for US dom.= is not the max.   

But would match e.g. to The Avengers OW.

But the quote is from 2007, Avengers release date was 2012, so it's also possible to assume the first week (like 2006 Pirates Dead man's Chest), based on the mentioned 12.5%.

 

 

 

My main interest are ww details, I only 'started' to really look into US details too, but here in my region TV stations... usually buy packages of movie titles. As far as i know this is also not uncommon in the US. Sometimes TV-stations even co-finance movies... so I am guessing there is no real general rule.

 

What I am reading is details like shown in this article

http://www.hollywoodreporter.com/news/why-life-pi-titanic-vfx-426182

 

or the annual MPAA-Theatrical-Market-Statistics like this one about 2013

http://www.mpaa.org/wp-content/uploads/2014/03/MPAA-Theatrical-Market-Statistics-2013_032514-v2.pdf

 

or the UK tax laws, that allow articles like this

http://www.forbes.com/sites/csylt/2014/07/22/fourth-pirates-of-the-caribbean-is-most-expensive-movie-ever-with-costs-of-410-million/

 

or China's BO and foreign studios there background and so on

[terrestrial]

[Olive]

Apes 2 has only sold less than 800k Blue Ray units, I expected more since the movie had very good WOM.

[forg]

Guardians of the Galaxy soundtrack has sold more than 900K copies in the US and will definitely cross 1 million sales soon. Very impressive considering the album is pretty much a compilation of old songs

[Marek the Jedi]

maybe little off topic, but wow, finaly specs for Blu-ray 4K,
please point me to correct thread if not here

 

Ultra HD Blu-ray will employ High Efficiency Video Coding (HEVC – also known as H.265), which is the successor to H.264/MPEG-4 AVC and is considered the most efficient video compression standard available. Given that 4K video content requires much greater data space than existing 1080p, Ultra HD Blu-ray Discs will be produced in two configurations: 66GB dual-layer and 100GB triple-layer. Dan and Ron tell me that the goal in creating the Ultra HD Blu-ray spec extension is to future-proof the format, by including higher video frame rates (up to 60p), 10-bit color, a wider color gamut (up to Rec.2020 or BT.2020), and High Dynamic Range (HDR).

 

 

http://thedigitalbits.com/columns/my-two-cents/010615_1530

[lilmac]

Keep in mind, TV rights in North America are 12.5% of the theatrical gross.  That's significant money.

 

Hey baumer, did you see this?

 

http://deadline.com/2015/01/sony-the-interview-31m-vod-sales-1201342414/

[GravenImage]

Interesting info!

I've found this interesting since I saw TheNumbers list Narnia's Total Domestic Video Sales @ $428,696,652. That seems insane.

[terrestrial]

Hey baumer, did you see this?

 

http://deadline.com/2015/01/sony-the-interview-31m-vod-sales-1201342414/

 

 

Only for the ones who do not like the advertising wait:

 

it's about $31m VOD for The Interview and mentiones also these numbers

 

The Interview’s alternative distribution coup also far eclipses the returns of VOD success stories like

Radius-TWC’s Snowpiercer ($8.2 million) and

Roadside Attractions/Lionsgate’s Arbitrage ($14 million) and

Margin Call ($8 million)

while revealing VOD’s revenue potential and the value of transparency in reporting. Not that the circumstances leading to The Interview’s once in a lifetime cyberhacking hook can or will be replicated any time soon – knock on wood.