Cheap quick content for expensive toys?

Cheap quick content for expensive toys

Hollywood studios make more money by distributing via downloads than via theaters. Theaters make more than 60% of their revenue via ticket sales. Studios take more money from selling online ($17.50) than renting the products ($3.50). The subscription model for video renting seems growing in both revenue and important. Studios try to keep bigger movies away from digital renting like Netflix for the first 28 days because of the low cost rent (1$) per movie, but they cannot do it for smaller production and movies.

Home movies are cheaper, faster and lower quality compared to cinema movies. Walt Disney has a substantial production company focused to home movies and they are good in creating these lovable characters and brands featured in home movies. They additionally create toys which they want to sell fast. They are happier if Cars 2 is viewed as much as possible as quickly as possible so they can immediately sell Lightning McQueen plastic toys.

The Incredibles made more than $630m while Cars made only $450m in theaters, but Cars made 8$ billions in merchandise. Theaters are still profitable enough to pay off a big production of $250m but it is harder to produce blockbusters non stop, and merchandising helps.

TV series are also important, because they divide the cost of production in more episodes which quickly creates and grows new Brands. Many actors are going to high quality TV Series to refresh their careers and Brand. The same for film directors. Kardashian family made more than $70m with spinoff and merchandise from 3 TV Series.

As in music industry, the future for studios is likely to be to create more content, faster, cheaper and distribute widely. Immediately downloadable via monthly subscriptions. Media like movie and tv series is used to create, expose and increase Brand Equity which is then monetized through merchandise.

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