It's time to take the kids to the corner multiplex again. Cloudy With a Chance of Meatballs 2 opens next weekend, giving Sony (NYSE: SNE ) another shot to be mentioned alongside Disney (NYSE: DIS ) and DreamWorks Animation (NASDAQ: DWA ) among the ranks of the great animation studios of our generation.
That's not as outlandish as it sounds. Sony's Hotel Transylvania raked in $148.3 million in domestic box-office receipts last year, and a sequel is slated for 2015. The original Cloudy With a Chance of Meatballs took in $124.9 million in stateside ticket sales four years ago.
It hasn't all been golden for Sony Pictures Animation. The Pirates! Band of Misfits walked the plank with just $31 million in admissions sold last year, and Arthur Christmas couldn't crack $50 million two holiday seasons ago. The Smurfs 2 has been a dud this summer, and it's unlikely to make back its reportedly $105 million production budget.
However, the weather forecast should be considerably kinder for Cloudy With a Chance of Meatballs 2, and a major part of that rosy outlook is that -- until recently -- the pun-drenched movie was available on Netflix (NASDAQ: NFLX ) as a streaming title.
This has been big in building cult audiences in the past. Just check out last weekend's successful debut of Insidious Chapter 2. The creepy horror flick will overtake the original's $54 million box-office tally this weekend, and it will probably double, if not triple, it by the time the film has exhausted its theatrical run. Insidious became a cult favorite after making itself available in Netflix's digital vault. The move helped it build an audience hungry for a follow-up, and this is no different from when Breaking Bad and Mad Men kick off new seasons with ridiculous increases in ratings after making earlier seasons available on Netflix.
How many people streamed Cloudy With a Chance of Meatballs when it was available on Netflix until earlier this year? We'll never know, but there have been more than 2.8 million Netflix subscribers who have submitted star ratings on the movie. Hotel Transylvania -- which grossed more at the multiplex but was not available for streaming on Netflix -- has only a little more than 182,000 ratings. Sure, Cloudy With a Chance of Meatballs has been out a lot longer. However, the sheer volume of Netflix ratings doesn't match similar movies that have been out at the same time that didn't enter Netflix's Internet screening program.
This leads us to a big reason Sony had better hope the sequel's a hit. Netflix had no problem breaking off its streaming deal with Sony. It went on to ink more lucrative deals with Disney and DreamWorks Animation. Netflix has made it clear that it won't overpay for content, and having the top two animation studios in its arsenal makes it less likely that it will strike favorable licensing deals with smaller animation studios. Sony's animation arm needs to put out magnetic releases, hoping that Netflix sees the value in adding to what will already be a potent catalog of computer animated titles available on its growing streaming service.
Sony's hoping that it pours next week, and understandably so.
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