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Who Will Be Warner Bros' Hero When Harry Potter's Gone?

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What do you do when you have to wave goodbye to a product that, by the time it’s gone, will have generated an expected $75 billion in sales for you? Why, you simply replace it!

But, ah, wait. That’s the tricky part, isn’t it? And it’s a task Warner Bros faces when the Harry Potter series concludes with an eighth film in July.

The Potter series is the highest grossing film franchise ever: It raked in $1 billion more than all six of Twentieth Century Fox's Star Wars films. And this is critical to parent company Time Warner, as filmed entertainment contributed 14 percent of profit last quarter.

In fact, as BusinessWeek points out, the Potter films – along with profitable series like The Lord of the Rings and The Matrix -- have made Warner Bros the top-grossing studio in seven of the past 10 years. “The impact of a single installment can be outsized: In 2009, Harry Potter and the Half-Blood Prince accounted for 14 percent of Warner's $2.11 billion in domestic ticket sales, according to Box Office Mojo, an industry website,” explains BusinessWeek.

Who will follow Mr. Potter? "I don't think there's one obvious successor," says David Bank, an analyst with RBC Capital Markets. "If I were looking for it somewhere, it's the DC catalog."

Indeed this does look like a job for Superman. Time Warner, owner of DC Comics since 1969, made the unit part of its film division last year. And as Alan Horn, Warner's president and chief operating officer, explains "We're doing our best to get the DC properties lined up like airplanes taking off from the runway.” Superheroes like Wonder Woman, Batman, and Aquaman could end up saving the day, along with Sherlock Holmes sequels, and two prequels to the The Lord of the Rings trilogy.
POSITION:  No positions in stocks mentioned.