The Shawshank residuals: How one of Hollywood's great second acts keeps making money

On cable, “Shawshank” is at an age when the licensing value of many films diminishes, but its strength hasn’t wavered. “Shawshank” and other films are now being licensed for shorter periods to a bigger and hungrier universe of distributors. “Shawshank” has aired on 15 basic cable networks since 1997, including six in the most recent season, according to Warner Bros. Last year, it filled 151 hours of airtime on basic cable, tied with “Scarface” and behind only “Mrs. Doubtfire,” according to research firm IHS. “Shawshank,” despite its virtually all-male cast, was the most-watched movie on Oprah Winfrey’s OWN network in the latest season and in the top 15% of movies among adults 18-49 on Spike, Up, Sundance and Lifetime.

The movie’s profits to date may sound small in a world where some films gross $100 million in a single weekend. But such figures only begin to show a movie like “Shawshank”‘s long-term importance for a studio’s financial picture. That’s why there are six big studios: Smaller ventures that lack a reservoir of films have trouble surviving flops.

“Libraries are the basic profit engines,” said Edward Jay Epstein, author of “The Hollywood Economist: The Hidden Financial Reality Behind the Movies.” “When you license a movie from your library, the money goes directly to your bottom line,” he says.