Is a New Harry Potter Book and Film Inevitable?

Author J.K. Rowling has written a short story about the wizard, which hints at a bigger tale to tell.

Jul 11, 2014 at 8:36AM

Author J.K. Rowling has said she won't write another book about Harry Potter, but recent actions suggest she might change her mind sooner rather than later.

The author, who went from unknown to one of the best-selling writers of all time, released a short story about the wizard on her Pottermore website. The short tale written by Rowling but bylined to Rita Skeeter -- a minor character from the book series -- is meant as a send-up of tabloid reporting.

The story is presented as a fake news piece with the headline "Dumbledore's Army Reunites at Quidditch World Cup Final.'' It offers a few details about the no-longer-boy wizard, including how he has "threads of silver" in his hair. Most important for fans -- and the companies that stand to benefit -- the story refers to Potter having "a new scar on his cheek."

That scar will be one of the most intensely debated casual details in history, as it certainly suggests the "Boy Who Lived" had a more recent adventure than his teenage tussle with Lord Voldemort.

Is a new Potter possible?
The newly released short story offers details on the 34-year-old Potter. The character was 17 at the end of the last book in the series, which leaves 17 years of potential adventures. The end of the film series and novels did offer some details on how the various characters turned out, including their marriages and how many kids they had.

That limits who can die in a new story that takes place between the end of the last book and the time detailed in the new short story. That's not likely a major problem, as the Star Wars prequels proved it was possible to make huge money -- to the tune of $2.5 billion -- even when the audience knows which major characters live and die.

The biggest obstacle to a new Potter book or movie may be the author herself. Rowling has always said she was done writing full-length books about the character. Rowling's spokesperson said the author had "no plans" to write any further stories about the older Harry, reported.

George Lucas used to say the same thing about making new Star Wars movies. The Eagles -- who now are on a seemingly endless tour -- had long maintained they would get back together "when hell freezes over."

Rowling seems much less steadfast in her resolve. She certainly does not need the money, but her actions suggest she has more tales to tell about the character.

Which company would benefit from a new book?
(NASDAQ:SCHL) has served as the publisher for the entire series. On its website, the company wrote that "the Harry Potter books are distributed in over 200 territories, are translated into 68 languages and have sold over 400 million copies worldwide." The books have set a number of other milestones.

  • Harry Potter and the Goblet of Fire had a record first print run of 3.8 million in the U.S. alone.
  • Harry Potter and the Order of the Phoenix broke the records set by Harry Potter & the Goblet of Fire as the fastest-selling book in history.
  • Harry Potter and the Half-Blood Prince did the same.
  • The seventh and final book in the series, Harry Potter and the Deathly Hallows, sold 8.3 million copies in the first 24 hours, making it the fastest-selling book in history.

Potter has been an incredibly lucrative business for Scholastic. The company cited the series as one of its best-selling in its 2012-13 annual report, despite the fact that the last book in the series was released in 2007.

Scholastic does not break out Potter revenue specifically, nor does the company report how many copies each title has sold. Still, just the amount of books sold on the first day is better than nearly any other book ever sold. A new Potter book would not only sell over 10 million copies -- it would likely lead to new sales of millions of copies of the original novels.

A big chunk of the revenue generated goes to Rowling. It can be assumed she does better than the traditional 8%-10% royalty that lesser authors receive on each copy sold, but the incredible sales numbers leave plenty of room for the publisher to make money.

What about a new Potter movie?
It's unclear who owns the rights to another Potter film. Sony (NYSE:SNE) developed the Pottermore site, but a spokesperson told the Los Angeles Times the company does not hold rights to any movies developed from ideas that begin on the website.

Warner Bros. bought rights to the original Potter books, but it's unclear if the deal included language for potential spinoffs. A spokesperson for Warner Bros. could not immediately provide details about the status of the studio's Pottermore rights, the paper reported.

Rowling may hold the rights herself, which would likely be good news for Warner Bros., as Rowling has a good relationship with the studio.

If such a movie happens it's likely to deliver more than $1 billion in box-office revenue -- the final film in the series brought in more than $1.3 billion.

Short of having the Avengers join up with Luke Skywalker to battle Transformers, a new Potter movie is likely the biggest potential film that could someday exist.

It's also good for Universal
A new Potter book or movie would also be good for Comcast (NASDAQ:CMCSA), which owns Universal Studios, home to "The Wizarding World of Harry Potter." The first Potter-themed land, Hogsmeade, opened in 2010. Since then, park profits have more than doubled and attendance has increased by more than 30%, NPR reported.

The second Potter-themed attraction, Diagon Alley, opened July 8 to massive crowds.

Anything that keeps Potter in the news is good for these attractions, but a new book and/or movie would bring months -- if not years -- of publicity to the parks.

Universal could also profit from a new book or movie by setting up a temporary attraction themed to the new story, much like Disney (NYSE: DIS) is doing to capitalize off the success of the movie Frozen.

A new Potter film will happen
It may take years, and it may develop from short stories and other bits published on Pottermore, but the continuation of Harry Potter's story seems inevitable.

The amount of money involved would usually guarantee a sequel, but Rowling likely has all the money she could ever spend. Still, it seems that more Potter tales will come because there are simply more tales to be told. That's reading a lot into the presence of a scar in a short story, but Rowling knew exactly what she was doing when she dangled that carrot in front of her rabidly loyal audience.

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Daniel Kline has no position in any stocks mentioned. He read the first two Harry Potter books to his son who did not care for them. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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