I have read a research paper talked about
the history of how major studios are constantly changing their revenue stream.
Even box office is the major income for the film business while there are still
a lot of ways to make a profit for movies. With the technology and competition
improving the main sources of revenues for the studios changed very fast. Let
me introduce a little bit about how they work.
On the early 1970s, going to movie theater
or film festival is the major way to enjoy movies, if people missed the
theatrical release period they have to wait for a long time for the three major
television networks (ABC, NBC, or CBS) to release. At that time, studio’s major
income came from the theatrical release, international sales, and network
television.
In 1972, Home Box Office (HBO) offered the
first cable television network subscription service. In 1975, a Japan company
called Victor Company (JVC) invented a video home system, which makes films
could be purchased by normal people became possible. In 1977, the first video
store and the first video rental store showed in the United States. This made
the studios got a new way to generate more revenues for the films they had
produced.
For studios, their goal is to make their
content be distributed through as many channels as possible. Nowadays, studios
major revenue outside theater releases come from home video, network, cable
television, satellite, international distribution, the Internet, and mobile
devices.
By 1986, the studio earned more revenues
from domestic home video sales or rentals than their theatrical release income,
which shows the huge potential of film revenues streams outside the theatrical
release.
Nowadays, studios could also earn revenues
from after film products. Disney and Universal are the best examples for
developing their merchandise. The production company should plan for the whole
revenue stream structure before the film released and develop it as much as possible.
