Warner Bros. President Alan Horn said that the sixth "Potter" was worth taking a gamble on given all the money the franchise has generated for the studio and its corporate parent, Time Warner Inc.
"I think it's as comfortable a risk as we can have," Horn said.
Aside from box-office and DVD revenue, Warner Bros. reaps hundreds of millions of dollars from merchandise, video games and other sales including digital downloads on iTunes.
Kevin Tsujihara, president of Warner Bros. Home Entertainment Group, said profit margins were higher on distribution platforms such as video on demand and electronic sell-through because there were no manufacturing and shipping costs and the studio retained more revenue than it did from DVD rentals and sales.
"Even in a declining market, our profitability can go up," said Tsujihara, who declined to discuss "Potter" specifics.
Horn said he didn't expect the soft DVD market to hamper sales of "Half-Blood Prince" because it was a "unique property." He believes that although budget-conscious consumers have become more selective about the DVDs they purchase, they have been demonstrating a desire to own big films like "Potter," "Transformers," "Twilight" and Warner Bros.' "The Dark Knight," which according to The-Numbers.com was 2008's top DVD with more than 12.7 million units sold domestically.
Although Horn took a lot of flak from "Potter" fans when the studio pushed back the release of "Half-Blood Prince" to July from last November, the move may help boost DVD sales because the DVD will be released during the heavy gift-buying holiday season.
Because DVD and ancillary sales are driven by how well a film performs at the box office, Warner Bros. is focused on making sure that theaters will be filled with moviegoers.
As the "Potter" franchise ages, Horn says the biggest marketing challenge is assuring moviegoers that they'll be seeing something new.
"When you're doing the sixth version of a movie, how do you have fans not get tired of that?" the Warner Bros. president said.
Each of the "Potter" films follows a similar theme -- Harry uses his magical powers to seek the truth about the death of his parents and to fend off his evil nemesis Lord Voldemort -- but has a distinct look and story line.
