Harry Potter : A Multi Billion Dollar Business
(Note: The case is available in Spanish)

Abstract

The case examines how the Harry Potter series of books led to the creation of a multi-billion dollar business for various companies across the world in the early 21st century. The creation, development and management of Harry Potter as a brand is examined in detail. The case then describes the various marketing and promotional activities taken up by Harry Potter's author and publishers in the UK and the US. Thereafter, the case examines how Warner Brothers (which acquired its worldwide licensing and movie rights), turned the brand into an immensely successful marketing property. The case also explains the reasons why Warner Brothers and J.K Rowling were very protective about the brand and what precautions they took to ensure that the brand's image does not get diluted. Finally, the case also comments about the future business prospects of the Harry Potter brand.

"Harry Potter is a bigger property than anything else we have ever seen, and we are nowhere near saturation point."

- Diane Nelson, Senior Vice President, Warner Brothers, in June 2003.

In June 2000, a rather unusual story made the headlines of leading newspapers in the United States (US) and the United Kingdom (UK). The story was about how the book, 'Harry Potter and the Goblet of Fire,' had become the biggest publishing success in the history of the books business. The book (the third in a series of seven books about a boy named Harry Potter), authored by J.K. Rowling had broken all records at online book retailing majors Amazon and Barnes & Nobel with advance orders of 300,000 each.

The advance order figure was five times more than what most new bestsellers warranted for in the industry. Commenting on this, Lynn Blake, General Manager, Amazon.com's book store, said, "This is probably the biggest e-commerce event yet. We have certainly never seen a book that sells like this one does." The unprecedented number of orders indicated how readers all over the world were eagerly awaiting its release. Analysts pointed out that Harry Potter books belonged to that rare class of books which were avidly read by children and adults alike. This frenzy for the books (termed 'Potter Mania' by the media) had not only benefited book sellers but also helped many other businesses mint money.

Scholastic Inc (Scholastic), a US-based book publishing house, was one of the companies that benefited immensely from Harry Potter's phenomenal success. Scholastic published around 3.8 million first print copies of 'Harry Potter and the Goblet of Fire' in 2000. The company had reportedly sold 20.9 million copies of the first three books in the Harry Potter series, earning around $100 million from them in 2000. Judy Cowman, Vice President, Corporate Communications, Scholastic, said, "It is just an extraordinary publishing event. There has not been anything like it."

The Harry potter series not only raised the company's revenues but also generated significant investor interest. Scholastic's stock price reportedly increased to a record high of $74 at the end of the year from just $64 in July 2000. This, analysts said, had come as a boon for the company, which was still trying to recover from the 1997 debacle of 'Goosebumps,' another children's book, that had failed to perform well due to an ill-planned distribution strategy. With Harry Potter, Scholastic had been careful not to repeat its mistakes. Kevin McEnery, Executive Vice President and Chief Financial Officer, Scholastic, said, "We have been very careful in the distribution of Harry Potter."

The US-based media giant, Warner Brothers, was the single largest corporate beneficiary of the popularity of Harry Potter. The company owned all the rights to the Harry Potter series and expected to generate revenues up to $1 billion through these rights in 2003 alone. Warner Brothers planned to make this money from the Harry Potter movies (based on the first two books in the series 'Harry Potter and the Philosopher's Stone' and 'Harry Potter and the Chamber of Secrets') and merchandising deals based on the books and movies. In fact, Harry Potter was being seen as Warner Brother's hottest property for now. Apart from this, various other licensees like Lego, Mattel and Electronic Arts were some of the beneficiaries of the brand.........

        Case Code   MKTG079
   Case Length    15 Pages
              Period    2003
 Organization     Amazon.com
        Pub Date     2003
Teaching Note    Not Available
     Countries    UK
      Industry    Books and Publishing

Issues

Study the importance of carefully designed marketing efforts for creating and managing strong brands.

Examine the synergies between the print and entertainment media and appreciate how successful books are made into movies and the marketing of such movies

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