Last week was the birthday of JK Rowling's creation and wizard kid Harry Potter. While Harry Potter moved from the world of non-magical people called Muggles to the wizarding world of Hogwarts, investors lapped up the opportunity to benefit from the millions of copies sold and billions earned through the film series.
JK Rowling had become a billionaire author. Meanwhile, the publishers and related license holders also enjoyed massive gains. The film series was inspired, and the surging popularity led to a number of video games and licensing of over 400 Harry Potter products. The brand value is estimated to be at $15 billion.
Harry Potter Stock Index
In such case, imagine what it is to be associated with the Harry Potter brand. To make things easier for investors, a not-so-real index was actually created to gauge the performance of companies that are associated and reap benefits worth billions of dollars from the Harry Potter franchise. Called the Harry Potter Stock Index, this tongue-in-cheek index tries to provide exposure to the success by investing in the associated publisher, movie producers, merchandisers and advertisers.
This index is not an operational one, and one would obviously not find it in the real world. However, all companies in it trade actively and these include major names. Benefits from celebrity names or franchise are generally short-lived catalysts for stocks. But the gains from the Harry Potter phenomenon for the related stocks were significant.
Amazon (AMZN – Analyst Report) continues to sell Harry Potter books, Electronic Arts (EA – Analyst Report) continues to sell games while Scholastic (SCHL – Snapshot Report) has the publishing rights. In fact, Scholastic had released four new images of Potter characters earlier this year for the re-release of The Sorcerer's Stone. Further, Scholastic will release the first fully color-illustrated version of book in October.
Stocks with the Magic Wand
The last and the final installment of the movie series, Harry Potter and the Deathly Hallows – Part 2, had a budget of $250 million (shared with part 1) but it had a box office collection of $1.342 billion. Time Warner's following quarterly performance reflected the impact. Sales jumped 5% to $8.2 billion, driven by 7% revenue growth at Warner Bros, which in turn benefited from DVD and Blu-ray release of Harry Potter and the Deathly Hallows: Part 2.
