Films rake in a lot of money. Right? Right. Last year, movies in the U.S. and Canada generated $7.66 billion at the box office, and that doesn't include all of the revenue from the ancillary markets.

But even though the studios are bringing in record amounts of money, the costs of making movies are increasing as well, eating away at the bottom line. The Motion Picture Association of America reports that average production costs for a studio movie in 2000 were close to $54 million, and that figure doesn't take into account marketing costs or stars' salaries, which can go as high as $20-$25 million for A-list box-office draws like Tom Cruise and Julia Roberts.

So in the end, just how much does a studio's revenues contribute to its owner -- conglomerates like AOL Time Warner or Viacom or Walt Disney?

"Somebody told me that Warner film, the studio part, is 5 percent of AOL Time Warner gross," says Bill Mechanic, formerly the studio head at Twentieth Century Fox and now an independent producer. "You know, you could have the biggest movie in the world and it doesn't have that much effect."

The tables below show the revenues that studios help generate for their parent companies. Contrast those numbers with how much operating income the parent companies' business segments are producing. (Operating income is essentially revenues minus expenses, excluding interest and taxes; net income, on the other hand, is what is commonly referred to as the "bottom line.") For instance, Disney's "studio entertainment" -- including Walt Disney Pictures, Touchstone Pictures, and Miramax -- generated almost $6 billion in revenue for Walt Disney Corp. But after the costs are tallied, the operating income for that segment of the business was only $110 million.

Other companies posted much higher operating revenues. Note, however, that the companies' definitions of the business segments that house their studios may also include other operations, such as television studios and theme parks, making it difficult in those cases to isolate the studios' contributions.

Studio Entertainment accounts for 23.6 percent of the revenue that Disney's top business segments generate, and only 2.7 percent of their operating income.

Business Segment		Revenue (in millions)		Operating Income (in millions)
Media Networks		9615		2298
Studio Entertainment*		5944 (23.6%)		110 (2.7%)
Parks and Resorts		6803		1620
Consumer Products		2622		455
Internet Group		368		(402)
Combined		25402		4081

*Includes Walt Disney Pictures, Touchstone Pictures, Walt Disney Feature Animation, Walt Disney Television Animation, Buena Vista Theatrical Group, Miramax
Source: The Walt Disney Company Annual Report 2000

Filmed Entertainment accounts for 21.7 percent of the revenue that AOL Time Warner's top business segments generate, and only 9.1 percent of their operating income*.

Business Segment		Revenue (in millions)		Operating Income (in millions)
AOL		7703		2350
Cable		6054		2831
Filmed Entertainment**		8119 (21.7%)		796 (9.1%)
Networks		6802		1502
Music		4148		518
Publishing		4645		747
Combined		37471		8744

* Figures are pro forma, or projected; estimations for operating income are before depreciation and amortization.
** Includes Warner Bros. Pictures, New Line Productions, Fine Line Features, Warner Home Video, Warner Bros. Television
Source: AOL Time Warner Annual Report 2000

Entertainment accounts for 13.5 percent of the revenue that Viacom's top business segments generate, and 8.9 percent of their operating income.

Business Segment		Revenue (in millions)		Operating Income (in millions)
Cable Networks		3895		1250
Television		5382		431
Infinity		2765		589
Entertainment*		2758 (13.5%)		210 (8.9%)
Video		4960		76
Publishing		596		50
Online		101		(257)
Combined		20457		2349

*Includes Paramount Pictures, Paramount Parks, movie theater and music publishing operations
Source: Viacom Annual Report 2000

Filmed Entertainment accounts for 27 percent of the sales revenue that News Corp.'s top business segments generate, and 15.5 percent of their operating income.

Business Segment		Revenue (in millions)		Operating Income (in millions)
Filmed Entertainment*		6625 (27.0%)		503 (15.5%)
Television		7008		991
Cable/Network Programming		2696		197
Magazines and Inserts		1675		437
Newspapers		4600		904
Book Publishing		1907		205
Combined		24511		3237

*Includes Twentieth Century Fox Film Corp., Fox 2000 Pictures, Fox Searchlight Pictures, Twentieth Century Fox Home Entertainment
Source: News Corp. Annual Report 2001

Pictures account for 7.7 percent of the sales and operating revenue that Sony's top business segments generate, and only 1.8 percent of their operating income.

Business Segment		Revenue (in millions)		Operating Income (in millions)
Electronics		39989		1989
Game		5169		(409)
Music		4568		164
Pictures*		4442 (7.7%)		35 (1.8%)
Insurance		3415		143
Combined		57583		1922

*Includes Sony Pictures Entertainment, Sony Pictures Classics, Columbia Pictures, Columbia TriStar Television
Source: Sony Annual Report 2001

TV/Film accounts for 31.2 percent of the revenue that Vivendi's top business segments generate, and only 23.6 percent of their operating income*.

Business Segment		Revenue (in millions)		Operating Income (in millions)
Music		495		94
Publishing		3540		493
TV/Film**		4248 (31.2%)		526 (23.6%)
Telecoms		5270		1303
Internet		48		(184)
Combined		13601		2232

*Figures for operating income are before depreciation and amortization.
**Includes Universal Pictures, STUDIOCANAL, Universal Studios Recreation Group, Canal+, Universal Television & Networks Group
Source: Vivendi Annual Report 2000

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