Ever wondered why box office failures continue to come up with dismal sequels? The little not-so-secret of production companies - $$ MERCHANDISING $$ Production companies have realized that the real money is not in the screens. | It’s in the merch! | But that can’t be that big a number, right? WRONG! Take 6 franchises and their merchandising revenue: - Toy Story 3 > $ 10 Bn
10x BO (box office collections) - Frozen > $5 Bn
3.5x BO - Transformers > $7 Bn
3x BO - Harry Potter > $ 20 Bn
3x BO - Marvel > $ 41Bn
4x BO Why?
| 1/ Screens need to make way for newer releases too as they can slowly fail to fill up screens. |
2/ Some of the characters in the movies have created so much value for the production houses WAY before the sequel is even released. How though?
| MINDSHARE! Making characters last longer in the minds of their viewers is a science. They do it by bringing in new avatars or new attributes in the sequels (as simple as a change in outfit or hairstyle). Risk of inventory, sales & distribution?
| NONE! They license it out in exchange for 10-15% royalty with ZERO risk of inventory and distribution. If you think a sequel was a failure because you did not like it or was rated poorly or it ran out of screens quickly, | THINK AGAIN. #strategy #franchise #entrepreneur #leadership #media #entertainment