The quintessential gauge of measuring a film’s success has always been its box office performance. And indeed, many production houses earn the bulk of their income from screening their masterpieces in theatres all over the world. In 2016, the film industry collectively made a total of $38 billion globally, which is purely based on theatrical earnings. However, there are many other ways that films can actually bag additional income even when their run in cinemas has already ended. In fact, those that have underperformed during their initial release may still be able to recoup their production expenditure through other means.
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- Home video. A few weeks or months after a movie’s theatrical release, its home video version is made available in retail stores. DVDs, Blu-rays, and digital downloads are the second most important sources of income for film producers. The most profitable of which have amassed more than $100 million in home video sales, almost covering the whole film production budget itself. In addition, many films that did not perform well in cinemas have actually become profitable when their home video versions were released and eventually become cult classics.
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- TV and streaming services. Many analysts predict that the home video industry will soon die down and the rapid decline in DVD and Blu-ray sales in the past few years can well vouch for this claim. The deterioration is most attributed to the rise of streaming sites like Netflix as well as the growing demand for a TV broadcast. Film producers earn from this set-up through licensing agreements, wherein the streaming site or TV network pays the producers a specific fee for the rights to show their film on such platforms. They may also buy the film altogether. The system is most especially vibrant in Internet-based video-on-demand sites, where customers can conveniently watch their favorite film whenever and wherever they want. For indie film producers, this is a sure way to earn guaranteed profits.
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- Merchandizing. The likes of Star Wars, The Avengers, Harry Potter, and Toy Story are already gigantic blockbusters themselves, and yet they can still find many other ways to create more cash from their existing fan base, building a media franchise in the process. Such popular films can have other incarnations outside the big screen; these include t-shirts, video games, books, theme parks, and of course, toys. Children’s toys make up an industry worth about $22 billion, and the bulk of the sales has been driven or inspired by movie characters.
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- Brand partnerships. It is common for films to have sponsors, especially when they involve popular actors. Product placements within the movie or during the marketing stage can significantly help producers offset expenditure, thereby increasing their chances of generating profits. In some cases, it is these sponsors that actually shoulder the production budget.