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.