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November 09, 2008
Box Office Surging
The expected surge in the fourth quarter box office is back on track after an interruption for Halloween falling on a Friday night. Madagascar 2 brought in a better than expected $63 million and Role Models surprised with $19 million to push the weekend box office up 32% from a year ago for the top 12 films according to data form Box Office Mojo. The box office is now up 7.5% this quarter and in positive territory for the year.
As outlined previously, in 2008 the box office fell for 12 consecutive weeks from late September through early December. We are now about half way through that period with the 7.5% increase. The comps should improve dramatically the next two weekends. This coming weekend is the debut of the new James Bond film, Quantum of Solace. Quantum is already open in several overseas markets and is shattering box office records. Last year the #1 film on the comparable weekend brought in just $27 million and the top 12 for the whole weekend was $92 million. Quantum is going to bring in well over half of last year's entire top 12 all by itself. Madagascar 2 and Role Models have no com[petition in their genres and should hold well despite the massive expected turnout for Bond....
....The next weekend should also be up huge featuring the debut of Bolt, an animated film form Disney, and Twilight, a vampire film based on extremely popular novels with teen girls. True Blood, an HBO series about vampires is doing quite well in the ratings which will also give Twilight a push. The #1 movie the same weekend a year ago did $34 million, a total that should easily be surpassed by Twilight ($50 million plus?) and the second probably by the second weekend of Quantum of Solace.
The most direct plays on the box office surge are movie theater operators Regal Entertainment, and Cinemark Holdings. National Cinemedia the leading in theater advertising company, is another play. Regal yields 12% and goes ex-dividend on December 8th. With that 3% in your pocket if you hold through that day and the surging box office in providing a tailwind, the shares represent an interesting long idea for the next 30 days.
The beginning of November marks the start of the second biggest season of the year for Hollywood so I'll be back with regular updates most Monday's for the rest of the year.
Posted by Steve Birenberg at November 9, 2008 04:00 PM in Box Office
1. DO YOU THINK THERE IS ANY CHANCE FOR AN INTERMDIATE RALLY BEFORE THE END OF THE YEAR? THE CONTAGION APPEARS TO HAVE SPREAD TO OTHER INDUSTIES E.G CAR AND AIRLINE INDUSTRIES.
2.IT SEEMS AS IF THE EMERGING MARKETS ARE GETTING HIT MORE THAN AMERICAN COMPANIES WHETHER OR NOT THEY HAVE ANY SIGNIFICANT LEVERAGE ON THE BOOKS.THER APPEARS TO BE NO EVIDENC OF A SUSTAINED REBOUND IN EITHER CETV OR MICC STOCKS. DO YOU HAVE ANY THOUGHTS IN THIS REGARD?
IT SEEMS LIKE WE ALL SHOULD LEAVE THE MARKET FOR 6 TO 12 MONTHS.
1. I do think we can have a decent rally before year end that goes above the recovery highs so far. Investor sentiment is very poor and everyone now expects terrible news. We need a few good days followed by smaller pullbacks to build confidence and generate a sustained rally.
2. Emerging markets and small cap remain the worst areas and they won;t improve until they do. That sounds silly but these areas need confidence either from a rally or the passage of time that allows good results to be reported which surprise people. CETV and MICC are in it prove it to me mode. I think they will prove it and the stocks will be much much higher, possibly doubles or more by the middle of next year. But again I reiterate it will take time as it always does with broken stocks.
Posted by: Steve at November 10, 2008 04:46 PM