NBCUniversal Places Big Bet on 'Harry Potter,' 'Fantastic Beasts'
August 08 2016 - 1:10AM
Dow Jones News
NBCUniversal is betting big on "Harry Potter" and "Fantastic
Beasts."
In a wide-ranging seven-year deal with Time Warner Inc.'s Warner
Bros. that takes effect in 2018, the Comcast Corp.-owned media
company will obtain commercial television rights to the eight
"Harry Potter" movies, which will air mainly on the USA and Syfy
channels.
NBCUniversal also will get rights to the coming "Fantastic
Beasts" franchise from "Harry Potter" author J.K. Rowling, and will
be able to use the "Harry Potter" and "Fantastic Beasts" source
material at several of its Universal theme parks in conjunction
with its hugely popular "Wizarding World of Harry Potter"
attraction.
Terms of the deal weren't disclosed, but people familiar with
the agreement said it could be valued as high as $250 million,
based in part on the box-office performance of the three "Fantastic
Beasts" movies, the first of which opens this November. That would
make the pact one of the largest for a movie franchise.
An NBCUniversal spokeswoman would only say it is the largest
movie acquisition in the company's history.
Walt Disney Co., which currently holds the rights to the "Harry
Potter" franchise through June 2018 and typically airs the movies
primarily on its Freeform network (formerly ABC Family), sought to
continue the relationship with Warner Bros.
"NBC was willing to step up significantly to acquire the
franchise," said Jeffrey Schlesinger, Warner Bros. president of
Worldwide Television Distribution. "It made sense to marshal all
the assets we have," he added.
Besides the financial commitment from NBCUniversal, its "Harry
Potter" park attractions also appealed to Warner Bros.
The "Harry Potter" movies will become available to NBCUniversal
on July 1, 2018. NBCUniversal has the right to air them on all its
networks, including the NBC broadcast network.
The agreement with NBCUniversal is separate from Warner Bros.'
longtime pact with sister pay-TV channel HBO, which gets movies
from the studio first before they migrate to commercial
television.
Like all media companies, NBCUniversal is trying to figure out
how to attract young audiences as consumers cut the cord or trim
their monthly cable bills. USA and Syfy this season have suffered
viewership declines of 11% and 21% in prime time, respectively,
among viewers 18 to 49, amid declines throughout the industry,
according to Nielsen.
At the same time, the company and parent Comcast have looked to
emulate Disney's success in landing big franchises that work across
TV, film and theme parks. NBCU hopes the "Harry Potter" deal will
help on those fronts.
"When you have an iconic franchise like this, it has a lot of
value," said Chris McCumber, president of NBCUniversal Cable's
entertainment networks unit.
"You end up getting a younger audience who comes in to discover
them," he added.
NBCUniversal also has high hopes for the 2016 Olympics in Rio,
which it is telecasting on its networks. The opening ceremony on
Friday drew 26.5 million viewers on NBC, a 35% decline from
London's 2012 Games and the lowest-rated start since 2004.
Although the "Harry Potter" movies have been on television for
years, they are steady performers, continuing to attract new
generations of fans. The movies have drawn almost 1.3 billion
viewers to date on television, according to Nielsen, making it the
most-watched franchise in modern television history.
Popular theatrical movies have become a staple of cable
television because they can provide a "comfort food experience" to
viewers and require little promotion and marketing. While cable
networks are becoming more cautious in buying reruns of sitcoms and
dramas, the appetite for movies has only grown. In 2010 about 40
networks aired theatrical movies and now more than 60 do.
The "Harry Potter" attractions have also been a huge success for
Universal's theme parks over the past six years. Annual revenue
more than doubled between 2010 and 2015 to $3.34 billion and
operating cash flow grew by 148% to $1.46 billion.
Earlier this year, NBCUniversal opened the "Wizarding World of
Harry Potter" attraction at its Universal Studios Hollywood Park
and it has proved a popular draw.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
August 08, 2016 00:55 ET (04:55 GMT)
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