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As late as 1948, Hollywood
studios made virtually all of their money from
a single source: the box-office. But with
the emergence of television, studios had to find
new ways of making money. They therefore
moved to home entertainment.
By 2003 the studios were
taking in almost five times as much revenue from
home entertainment-- television, videos, and DVDs--
as from movie theaters. (See Table 1) |
TABLE
I. STUDIO REVENUES WORLDWIDE, 1948-2003 (Billions)
Inflation-Adjusted in 2003 Dollars
Year
|
Theater |
Video/DVD |
Pay-TV |
TV,
Free |
Total |
Theater
Share (%) |
1948 |
6.9 |
0 |
0 |
0 |
6.9 |
100 |
1980 |
4.4 |
.2 |
.38 |
3.26 |
8.31 |
55 |
1985 |
2.96 |
2.34 |
1.04 |
5.59 |
11.9 |
25 |
1990 |
4.9 |
5.87 |
1.62 |
7.41 |
19.79 |
22 |
1995 |
5.57 |
10.6 |
2.34 |
7.92 |
26.53 |
20 |
2000 |
5.87 |
11.67 |
3.12 |
10.75 |
31.41 |
19.5 |
2003 |
7.48 |
18.9 |
5.56 |
11.4 |
41.2 |
17.9 |
Not
only did movies in theaters provide a smaller share
of the revenue in the new entertainment economy, but,
because of the ever-increasing
cost of marketing them, they yielded little, if any
profit. Video, DVDs, Pay-TV and Broadcast, which
have much lower marketing costs, now yielded almost
all the profits for the corporate owners of the studios.
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