The rumors of Hollywood's death have been insanely exaggerated: 2012 could be remembered as the year of serial epic mega-blockbusters.
This week, Marvel and parent company Walt Disney (NYSE: DIS ) have an epic hit on their hands. The Avengers is the tentpole culmination of seven years of careful franchise building, starting when Marvel was but a wee comic-book house with big Hollywood ambitions financed by a $525 million credit facility.
Long-term thinking pays off, as every Fool knows.
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The bits and pieces leading up to last week's premiere were promising:
- Iron Man and Iron Man 2 collected about $600 million each in worldwide box office receipts.
- Thor and Captain America landed close to the $400 million mark.
- Even the runt of the litter, The Incredible Hulk, was a hit with $263 million in global sales.
That's more than $2 billion in worldwide theatrical sales when you add up the teaser movies. Throw in DVD sales, digital rentals, TV syndication, and tie-in sales like action figures and fast-food meals to see the number grow really huge.
Young movie fans showed a thirst for action films earlier this year, when Lionsgate (NYSE: LGF ) cooked up a $380 million domestic and $618 million international hit in The Hunger Games -- itself a surefire sequel tentpole.
So there's no reason to be surprised at The Avengers' record-smashing performance. But the magnitude of this success is nothing short of astounding. The movie opened to an all-time record of $207 million this weekend, adding to $447 million of international showings that started a week earlier. This superhero team-up has already made more money than any of the component hits, as Iron Man 2 stopped at $624 million globally. IMAX (Nasdaq: IMAX ) stood for $21 million of these totals, largely limited by the number of screens being available for sellout after sellout.
Basking in Marvel's halo
Rival studio Viacom (NYSE: VIA ) also shares the joy because its Paramount division owns the domestic distribution rights for The Avengers. That's a lingering side effect of that age-old credit facility deal. And thanks to the Paramount connection, you can bet that The Avengers will show up as a Netflix (Nasdaq: NFLX ) stream in 2013.
Netflix has an exclusive streaming license with premium cable channel Epix until September. That's when Epix -- a joint venture between Lionsgate, Viacom, and Metro-Goldwyn-Mayer -- can add other digital services to the distribution slate. The non-exclusive part of the Netflix contract then continues for another three years.
So Netflix gets The Hunger Games this fall and The Avengers next spring. Expect an epic online, TV, and radio blitz of Netflix advertising when these licenses take effect. Year-to-date ticket sales are up 18% over last year's early-May tally, and we're still waiting for guaranteed hits like The Dark Knight Rises, the final Twilight installment, and The Amazing Spider-Man. This year looks like a blockbuster factory.
Supersized blockbusters like The Avengers have a beautiful halo effect. IMAX, Netflix, and theater operators will show super powers in coming quarterly reports thanks to this runaway box-office train.
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