The Twilight Saga: Eclipse is proving a few maxims about the film industry while ripping others to shreds.
The Stephenie Meyer adaptation is set for a monstrous opening. Eclipse opened today at a record-breaking 4,416 North American theaters and all 193 IMAX (Nasdaq: IMAX ) locations, including more than 4,000 midnight shows. Expect this event to figure in big, bold letters the next time IMAX reports quarterly results.
Online ticket seller Fandango reports that the movie stands for 91% of the service's pre-ordering activity for the July 4 weekend. If last year's Twilight: New Moon is any indication, Eclipse should pull in at least $140 million in box office the first weekend alone; the 2009 installment in the series collected more than $700 million worldwide, not even counting a stellar haul of DVD sales.
Someone at Viacom (NYSE: VIA ) studio Paramount Pictures must be pretty depressed over letting this cash cow get away when the company had the rights to the material, and it's a shame that we can't invest in privately held Twilight producer and distributor Summit Entertainment. Then again, that company has only one book left in the series and not much financial success elsewhere; buying in today would probably be an unwise choice.
So what can an entertainment-minded investor learn from this guaranteed blockbuster? Well, it's proof positive that even action movies don't really need to be shot in 3-D to succeed in 2010. That's a valuable lesson: Warner Brothers (NYSE: TWX ) rushed the 3-D-ization of Clash of the Titans to capitalize on the house that Avatar built, but then barely covered the production costs in domestic ticket sales. 3-D was not a magic bullet for Warner, and is not needed for Eclipse.
The real trick to making money in movie theaters is to identify your target audience and then exploit that connection as much as possible. Walt Disney (NYSE: DIS ) is the classic example of this, tapping into its core of kids and parents to produce one sure-fire hit after another. Eclipse rests on the Team Edward/Team Jacob dynamic, marketing the movie to females of all ages with smoldering vampires and shirtless werewolves at every turn. It doesn't really matter that half the movie consists of insufferable after-school-special dialogue when it's all done by sexy supernaturals. Summit has learned this lesson and is not shy about milking it to the last drop.
Eclipse shows you that the movie business is more about style than substance; more marketing than product quality; and you don't need fancy technology to make an action-movie hit. Find the best marketers and you'll find the big profits, too. Keep that in mind the next time you're drooling over a movie and wonder if it's an investable property.