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Something wasn't right at Netflix (NASDAQ: NFLX ) even before it posted poorly received quarterly results on Monday afternoon.
DreamWorks Animation's (NASDAQ: DWA ) Turbo was a box office dud over the weekend, and that has far-reaching implications for Netflix. Come December, Turbo F.A.S.T. -- a DreamWorks Animation series based on the movie -- will be available exclusively through Netflix's popular streaming platform. If kids don't watch the movie now, they aren't likely to be clamoring for the show come December.
Netflix conceded that it was a soft opening. The computer-rendered film about a snail that acquires the power of speed rang up a modest $21.3 million in domestic ticket sales during the weekend. That was third, and nearly half the take of the top draw. The Conjuring was the top movie at the local multiplex with $41.9 million in tickets sold, yet it was playing in 24% fewer screens. Of the five top grossing movies this weekend, Turbo had the lowest average per screen. That's not a good place to be as exhibitors decide how to prioritize their screenings during the frenetic summer blockbuster season.
Netflix isn't worried. It sees generally favorable reviews and strong word of mouth. On the Rotten Tomatoes movie critic aggregator website, Turbo has a reasonable 65% score, indicating that nearly two-thirds of the reviewers liked the movie. Yes, the two more successful animated features this summer have fared better. Despicable Me and Monsters University have scores of 75% and 78%, respectively, on the site.
You can't also blame Netflix for trying. The signature red mailers that have been going out since last week feature an ad for the movie. One can probably expect similar ads in the future, as DreamWorks Animation and Netflix have a multiyear deal in place covering the studio's theatrical features. Last month, the partnership expanded to include 300 additional hours of original content.
Netflix has been eyeing to grow its kid-friendly content after letting its streaming license with Viacom (NASDAQ: VIA ) lapse in late May. No more SpongeBob SquarePants. No more Rugrats. Dora the Explorer? No mas.
Turbo F.A.S.T. was supposed to help some of that sting, and if Turbo had been a smash, you may very well have seen young parents looking forward to December's original content the way that many adults were anxiously awaiting May's return of Arrested Development.
The buzz may still happen, but now it will move at a snail's pace.
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