Time Warner (TWX) stockholders are probably missing the good old days of 2008 right about now. Before 2008 got ugly and the financial crisis began in earnest, Time Warner stock was a hot ticket thanks to film studio Warner Bros. and the summer blockbuster The Dark Knight. That single tent-pole film went on to earn a total worldwide gross of over $1 billion, an influx of cash that made movie studio stocks very attractive to investors hungry for the next hit. While summer officially starts next week, the summer movie season has been running since the first week of May, and 2010 has been a lot less sunny than previous years for the film industry.
Warner Bros.’ own films Sex and the City 2 and Splice have underperformed, bringing in disappointing ticket sales of $216.5 million and just $8 million respectively. Warner’s inability to pull in audiences is indicative of a wider trend plaguing the film industry. Theater attendance over the Memorial Day weekend two weeks ago, typically one of the biggest of the summer was lower than it’s been in seventeen years despite Disney’s (DIS) major release Prince of Persia. Prince has failed to earn for Disney in the way the Pirates of the Caribbean and National Treasure franchises have, pulling in just $262 million.
Disney stockholders were undoubtedly also disappointed by the relatively limp performance of their recently acquired subsidiary Marvel Entertainment’s property Iron Man 2, a sequel to summer 2008’s other big success story. Iron Man 2 has earned just under $600 million to date, a mere fraction of its predecessor’s gross. The Viacom (VIA-B) subsidiary Paramount distributed Shrek the Final Chapter, another sequel to a successful franchise that also failed to fill seats and disappointed Dreamworks (DWA) stockholders. News Corp (NWS) subsidiary Fox and General Electric (GE) owned Universal Pictures have also been hurt by consumer disinterest. Universal’s major comedy Get Him to the Greek has only made $36 million in its opening week while their period epic Robin Hood has made $282 million, just barely covering the film’s budget.
Sony (SNE) stockholders, on the other, have something to smile about. This summer’s sole surprise success so far has been Sony and subsidiary Columbia Pictures The Karate Kid. The remake of the 1980s favorite opened strong this past weekend, making an estimated $56 million, nearly doubling the ticket sales of Fox’s The A-Team which also opened this weekend.
Will things turn around for summer 2010? Disney and Pixar’s Toy Story 3, releasing this coming Friday, should perform well. The rest of the summer is filled with weak bets at best, with possible cult hits in Fox’s Predators and Universal’s Scott Pilgrim vs. the World, and sequels to family oriented franchises like Universal’s Nanny McPhee Returns and Warner’s Cats & Dogs: The Return of Kitty Galore.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
