Senior Fellow Kevin A. Hassett

In retrospect, one could see how the young Lennon--he was only 25 at the time--could be led by the Beatles' experience to the comparison, which was for him a deeply ironic one. Already at that time, the Beatles had recorded 11 No. 1 hits and performed before countless concert-goers who responded to their music with a rapture of religious intensity.

The cultural explosion of Beatlemania might still be the most notable in recent history, but the Harry Potter phenomenon has clearly become a close second. And, like the Beatles, there is a crude sense in which the popularity of Harry Potter rivals that of the Christian savior.

The Bible is regularly the most popular book in the U.S., selling approximately 25 million copies in 2005, according to one recent estimate. Past Potter books have already sold 325 million copies worldwide. Harry Potter and the Deathly Hallows, the latest and last installment of the series, could easily surpass Bible sales this year.

But book sales are hardly the only measure of the success of author J. K. Rowling's creation. Advertising Age recently tallied up all the sales of Potter-related products and found that the total was likely in excess of $15 billion.

Bigger Than Star Wars?

Book sales accounted for the largest fraction of that, coming in at a whopping $9 billion. Yet movie revenue ($4.4 billion), DVD sales (more than $1 billion) and television revenue (up to $495 million) were equally startling.

To put the movie revenue in perspective, it is possible the Harry Potter series will surpass Star Wars and James Bond and become the highest-grossing movie franchise in history by the end of the year. And Potter still has two more movies to go.

There are many works of art that are equally as entertaining as the Harry Potter books. Philip Pullman's Dark Materials trilogy is as enjoyable, and perhaps more imaginative.

But Potter scored the big prize. Why? Clearly, the artistry of Rowling is an important element explaining Potter's success, but the changing economics of the "new" economy clearly plays a role as well.

Books and movies are different from other products that we consume in that the quality of our experience depends in part on whether others experience the product as well. When I eat an apple, my pleasure doesn't depend on whether my coworker eats an apple, too. But when both of us have seen the same movie or read the same book, we can delight in conversation about it.

"Externalities"

Economists call such interactions "network externalities" and these played an enormously important role in the success of Harry Potter. When network externalities are present, the success of a product can snowball once sales have crossed a tipping point. As more individuals experience the product, the benefit to others increases, lifting the incentive to experience the product even more.

Woe be unto the poor child who showed up at elementary school in 1999 without a thorough knowledge of wizards and muggles. Such social pressures fired demand, which lured parents into reading the book with their children. As the book was enjoyable, word of mouth from parents to other adults assured the meteoric trajectory of the franchise.

Why Harry?

Why did Harry Potter become the focal point? It is likely the answer is partly quality, and partly the luck of good timing.

Externalities are clearly much more powerful in the Internet age. Potter websites, online chat rooms and video games offer fans the opportunity to extend their enjoyment and magnify the network long after the book has been read. This sets the stage for the next installment in the series to be an even bigger hit. One wonders if Potter would have been a success without the Internet.

It took more than 30 years for something that rivals Beatlemania to appear. The economics of the Internet age suggest that we won't have to wait so long for something that is analogous to Potter.

The Internet magnifies the benefits of collective interaction and rewards the winners in a manner disproportionate to their relative quality. The Harry Potter series has ended, but something else will surely replace it, and soon.

Kevin A. Hassett is a senior fellow and director of economic policy studies at AEI.