Hello readers!
This week on my section of the blog we will be exploring the revenue streams of the film industry. Considering modern movie budgets, selling tickets at the box office if not enough to cover the cost of producing a major motion picture. In fact, only one quarter of the revenue these films generate is collected from domestic box office showings.
The main ways that films generate revenue are through…
- Video rentals through on-demand services
- Licensing fees from streaming services & television broadcasters
- Domestic box office sales
- DVD and Blu-Ray sales
- Merchandise (toys, games, clothes, etc.)
- Foreign sales
Disney is the greatest example of this. When they release a film, for example Moana, they don’t just release the movie. They have toys, costumes, video games, books, clothing, and more all lined up to come out with the movie. Disney knows their audience and they know the market, which is why they not only merchandise their movies tremendously, but they have recently created their own streaming service as well. Disney creating their own streaming service is a perfect example of media convergence. Consumers expect that all media can be found online, including movies. Disney has noticed the online movement and the success of other streaming services and have created a new cybermedia model to maximize profit on the streaming of their films.
You can learn about Disney’s streaming service and how it will impact consumers in this video:
Disney is also known for their foreign sales. They are sure to hire international agents to push their films in countries other than the United States because they know that they have a global audience ready to be marketed to. Disney has also begun expanding its lineup of Disney princesses to include more ethnic groups and areas of the world. The globalization of mass media has made it possible for Disney to do so. Most recently, is a previously mentioned princess, Moana, who represents the Polynesian people in this new Disney film. The film, Moana, explores the tribal traditions and spirituality of Polynesian people as well as bringing a new standard of beauty and body type to the Disney princess lineup. Disney made the effort with this film to appeal to those of Polynesian descent as well as those looking for a Disney princess that doesn’t portray European beauty standards.
Disney Pixar has also recently released a film, Coco, that explores the Mexican holiday, The Day of the Dead. By basing the film’s concept around a boy from Mexico and exploring one of the nation’s most culturally notable holidays, they appealed to a more global audience than previous Pixar films. Disney’s efforts to globally market and their new project of inclusivity has not only maximized their profits, but has kept them at the top where they control 18.2% of the entire film industry.
When a new movie comes out that is expected to do good in the box office, the media deems it a “blockbuster” but what really matters to these companies is the revenue they generate through streaming services, merchandise sales, DVD and Blu-Ray sales, etc. Profits don’t depend on people going put to see the film in a theater like it used to. With advances in technology and new knowledge of the everchanging market, companies have found countless ways to generate more revenue than ever before and I hope you learned more about some of them today.
Stay tuned for next weeks post!
Sources:
How Exactly Do Movies Make Money
Economics and the Film Industry
How Disney Will Force Netflix to Change Streaming
The Media of Mass Communication 12th Edition
Media and the Economy 
I enjoyed reading your blog post this week. I never really thought about how much movies make other than what the news says the box office for that movie. I found it interesting how box office sales only account for a quarter of the cost of producing a movie. This was fascinating to me because I always hear on the news how movies rake in millions of dollars from the box office. Also, it’s fascinating how Disney and other companies can make so much money off of creating toys and games based off of movies. I know I was always attracted to the Little Mermaid barbies and toys when I was little. I am curious how much money companies make based on DVD/Bluray sales considering most people tend to stream movies.
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I found your blog post very enlightening and you touched on a few different key concepts. I did not know how much money is made on these films! Usually when I think of a film, I don’t think about anything after it hits the box office, and the different markets it can reach. You gave a great example using Disney to help me better understand how this all works. And to think that more and more streaming services are in the works, like Disney, I wonder if paying for it, Netflix, Hulu, Prime TV, and Roku will be more worth it, than simply paying a monthly cable bill with on demand services and access on the go (ex. At&t u-verse). One thing I would suggest is to not forget to include in-text citations. I can’t wait to read more! Keep up the good work.
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