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Twenty-First Century’s Best Venture

Posted on Tuesday, Jul 19th 2005

Twenty-First Century’s best venture is the Harry Potter franchise. Starting with a great set of thrilling stories, J.K. Rowling’s marvelous boy-hero has started off a whole generation of youngsters on paths of reading, courage, friendship, adventure, and Rowling herself, on a path of great riches.

Traditionally, Venture Capitalists did not finance content plays. But if you look at the numbers, one begins to wonder whether or not they should start … books, music, films, toys, games …

Projections: (BBC News)

“The global popularity of the books, films and games is estimated to have made the Harry Potter brand worth $1bn. More than 265 million copies of the books have been sold in 200 countries. Author J.K. Rowling, whose rise to fame in itself is a marketing executive’s dream, is reputedly now Britain’s wealthiest woman [not Queen Elizabeth]. Waterstone’s booksellers estimates that on the first day of its release, the Half-Blood Prince will sell at least two million copies in the UK and more than 10 million worldwide. Meanwhile, supermarket giant Tesco estimates that it will sell 300 copies a minute when the book finally goes on sale in the early hours of Saturday morning. ”

Actuals: (BBC News)

“The new Harry Potter book has beaten sales records on both sides of the Atlantic, selling almost nine million copies in its first 24 hours. Harry Potter and the Half-Blood Prince sold 6.9 million copies in the US and more than two million copies in the UK, beating all previous Potter records. Estimates from Nielsen BookScan revealed 2,009,574 copies of Half-Blood Prince had been sold within 24 hours of release. US sales of the sixth Harry Potter book have generated more than $100m (£57m) in revenue across the weekend – more than the combined box office sales of hit films, Charlie and the Chocolate Factory and The Wedding Crashers. ”

The first weekend’s sales numbers came out ahead of forecasts. Wonder how many ventures claim such performance?!

ps. Half Blood Prince, the new Harry Potter book is the best yet of this series!

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More Facts and figures at BBC News …

Sramana Mitra Tuesday, July 19, 2005 at 9:15 AM PT

Interesting premise – once certainly worth a second thought and lots of other interesting trailing questions such as “How do you peg a figure to the value of a book/movie/etc?”, “The previous record of the enterpreneurs”, so on and so forth.

Of course if its Spielberg, you can be sure of 450 million USD on the next movie (there is already talk of his next movie grabbing tons of Oscar nominations) but would Warner Bros Venture Partners have invested in JKR before the first book was published?

Cheers,
Abhinav

PS: Quite enjoyed HP and the HBP myself though wonder if its the best in the series.

PPS: Nice colour too, orange

Abhinav Goyal Wednesday, July 20, 2005 at 9:08 AM PT

Business which sells to kids, though the parent pays, is always a great area to work on. The basic human nature of buying the best thing for the kids even though one can’t buy something for themselves is handled very well is some of the product offerrings in the market. I will not buy a shirt at the cost of $50 or think a couple of times even for buying a book for myself instead of looking at the internet to know something, but the other day I bought a toy for my kid at the cost of $55 without thinking twice. I loved the happiness in his eyes. Anything, which is not ‘bad’ and gives some comfort to my mind that I could buy something which my kid liked a lot is always fun. And if that is a very well written story which helps the kids to increase their imagination and take them away from TV and sometimes trash computer games, rest becomes history. There are plenty of such books at every corner of the world only thing is not written in a manner where kids from across the world can co-relate to their culture or habits. Pick them up move them through a grinding machine of editors like from Penguin and reach the kids, there still is enough business remaining to handle 100 more such books. As long as the basic nature of human being doesn’t change about their kids and which is never going to. Which parent will care if that book costs $5 more? Does anybody think that if the cost of the book would have been $2 more the sale would have dropped. No way, the parents would have continued to buy them for their kids. And once hooked it becomes a statement too in the busy tube trains how the new book is better than the previous books for the elders as well. So elders also need to read that too.

Santanu Bhattacharya Wednesday, July 20, 2005 at 2:16 PM PT

[...] Notice, George answers a bold YES to my question on funding HITS businesses, which most of Silicon Valley would say no to. For my own perspective on this topic, read the posts: The Timer and Twenty-First Century’s Best Venture. I fully expect Silicon Valley to have to go in the direction of funding largely Hits businesses in the future. When it does, George is one of the people to call upon, because I do believe he has the right intuitive feel for such businesses, and is not a geek who has suddenly reinvented himself as a consumer VC. [...]

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