Kung Fu Panda and the Upfront

A few brief items in the media world for this morning:
Kung Fu Panda opens today. The film has received good reviews and there has not been a major child focused film in theatres since Horton Hears A Who. A strong marketing campaign, good tracking data, and the usual optimism about funny talking animals has box observers optimistic about the opening. Most estimates are in the low $50 million range but I sense that a higher number might be what the experts are really thinking. DWA shares pulled back more than 2% in yesterday’s strong market from a new recovery high. I think the stock will rally on anything over $50 million but that a significant up move will require $60 million plus. Analysts are projecting a healthy $200 million for the total North American box office run. I think this is the minimum required to support DWA shares at current levels. $250 million or more is necessary for significant and sustained upside.
AdAge.com is reporting that NBC completed its upfront sales with $1.9 billion, up $100 million from a year ago….

….This is a better than expected performance and boosts confidence that the total upfront could eke out a gain. A small gain is not as much as it seems however, as NBC’s “up” year is at least partially fueled by its decision to sell a greater percentage of its inventory in the upfront. Analysts are speculating that advertisers are willing to lock in current pricing to avoid a repeat of last year when scatter pricing on unsold inventory soared to a 15-20% premium to the upfront. ABC and FOX are generally thought to be in the lead in this year’s upfront seeking prices increases of high single digits and low double digits, respectively. These levels would be enough to offset last TV season’s ratings declines and produce a flat to slightly higher industry wide upfront on similar inventory sellout ratios. I’d consider this outcome a success as far as national ad-supported media stocks are concerned.