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The Big Business of Avatar
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CNBC Correspondent
With Avatar opening at 12:01 am on Friday, everyone's waiting to see if the much-anticipated movie lives up to the hype, and how it performs at the box office. I got a sneak preview last week — it certainly didn't disappoint me — I was particularly wowed by the intricate, beautiful world James Cameron creates — but we'll see if the live action-computer generated 3-D hybrid pulls everyone else in.
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Source: avatarmovie.com |
So who cashes in if the movie is a hit? Of course 20th Century Fox [NWS
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] benefits — the studio is watching for the movie to hit a certain box office number (estimated at anywhere from $500 million to $800 million worldwide) to break even. It's been a long, four and a half year process and the film cost an estimated $300 million (plus), and an additional $100 million (plus) in marketing and distribution costs.
The theater chains are already counting their revenue from ticket sales, not to mention the huge margins they'll make from popcorn and soda sales: Imax [IMAX
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] has already sold out hundreds of screenings before the film even opens. Regal [RGC
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], AMC, Cinemark [CNK
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] and Caremike Cinemas [CKEC
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] are putting "Avatar" on all their 3-D screens. Theaters charge $3 more on average for 3-D screenings than a regular 2-D one, which is good news for both studios and cinema companies. And if "Avatar" is huge in 3-D, you can bet more digital 3-D projectors will roll out to theaters very soon.
And it's not just movie companies that will cash in if 'Avatar' is a hit. McDonalds [MCD
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] is one of the film's main promotional partners, offering access to 'Avatar' games on McDonalds Web sites and distributing toys in Happy Meals. This partnership should be a win-win: Cameron gets the global brand to raise awareness of his story, while McDonalds gets to tap into the excitement about a new entertainment brand.
And of course, if Avatar is a hit, it's not just a movie, it's a franchise. Mattel [MAT
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] has licensed Avatar characters for games and action figures. And since the movie is so technologically ground-breaking, Mattel is launching some technological innovations as well. With its new Avatar toys Mattel is launching what it calls "augmented reality": each toy comes with a tag that brings up a character on your computer, when its put in front of a computer.
The list of promotional partners goes on and on. Coke Zero [KO
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] launched a viral site for the movie, asking you to join the "AVTR" program. YouTube [GOOG
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] and LG Electronics partnered to support the Avatar premiere. Panasonic is the film's audio-visual partner, providing technology to help create the film, and using the film as part of a marketing campaign. Now all these partners are crossing their fingers for a hit -- the better the movie does, the better the return on investment on the marketing partnership.
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