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Investing in a movie studio can be a lot of fun. Instead of just watching movies for entertainment, you begin to watch them with investment potential in mind. This is especially the case for movie franchises with future installments. However, stand-alone movies can still offers massive potential.
While past results don't guarantee future success, when you look at 2013 studio market-share comparisons, keep in mind that these comparisons are based on groups of movies. Therefore, the results are more important than you might realize. If a studio has proven that it can continuously pump out hit after hit, then future success is likely.
Let's take a look at movie studio market-share results for 2013. We'll begin with No. 5 and work our way up to No. 1.
No. 5: Lions Gate Entertainment (NYSE: LGF )
2013 Market Share: 9.8%
Movies That Grossed At Least $100 Million Domestically: The Hunger Games: Catching Fire ($395,526,705), Now You See Me ($117,723,989)
The Hunger Games franchise has been a home run for Lions Gate, and it's far from complete. The Hunger Games: Mockingjay Part 1 is due out on November 21, 2014, and The Hunger Games: Mockingjay Part 2 is due out in the fall of 2015. If these movies perform as well as their predecessors, it would be a big boon for Lions Gate and its investors. The odds of this happening are good. If you look at it logically, it's highly likely that more people were turned on to the franchise after the success of The Hunger Games: Catching Fire. Therefore, there will now be more fans of the franchise heading into the third installment.
No. 4: Sony/Columbia (NYSE: SNE )
2013 Market Share: 10.5%
Movies That Grossed At Least $100 Million Domestically: Grown Ups 2 ($133,668,525), Cloudy With a Chance of Meatballs 2 ($116,857,454), Captain Phillips ($104,638,057), This Is the End ($101,470,202)
The three lowest-grossing films on this list were well-received by moviegoers. Despite being the biggest-grossing movie for Sony in 2013, Grown Ups 2 was a dismal failure, sporting a weak 5.4 (of 10) rating on IMDb, and generating a pathetically weak 7% approval rating on RottenTomatoes. Given these scores, the likelihood of a sequel is poor, which audiences will appreciate. Unlike Lions Gate, there are no good reasons to consider an investment in Sony based on its feature film potential.
No. 3: Universal Studios
2013 Market Share: 13.1%
Movies That Grossed At Least $100 Million Domestically: Despicable Me 2 ($367, 793,270), Fast & Furious 6 ($238,679,850), Identity Thief ($134,506,920)
Universal Studios is a subsidiary of Comcast (NASDAQ: CMCSA ) .
Despicable Me 2 is loved by audiences far and wide, which gives Minions -- the third installment due to be released on July 10, 2015 -- strong potential. If you watched the credits at the end of Despicable Me 2, you might have noticed minions auditioning for a movie. Most people thought this was the minions auditioning for Despicable Me 2 prior to it being made, but it was actually a hint for a third installment. Hints at future movie installments taking place during the credits is a new trend throughout then industry, so don't be so quick to leave the theater anymore.
Fast & Furious 7 is also due out on April 10, 2015. Despite the franchise's repetitiveness, the movies continue to generate profits. However, the real potential comes with Minions. Also don't negate the merchandising potential here.
Investing in Universal Studios/Comcast should lead to long-term rewards, but two other movie studios are stealing the show.
No. 2: Buena Vista/Disney (NYSE: DIS )
2013 Market Share: 15.7%
Movies That Grossed At Least $100 Million Domestically: Iron Man 3 ($409,013,994), Monsters University ($268,492,764), Frozen ($263,092,648), Oz: The Great and Powerful ($234,911,825), Thor: The Dark World ($202,651,732)
Disney had several big hits in 2013, but as far as future potential goes, it's mostly with Iron Man 4. There have been rumors of an Iron Man 4, and based on box-office results for previous installments, it's likely to be made. However, Robert Downey Jr. has yet to sign on. If he doesn't sign on, there are rumors that Tony Starks' brother will become the new hero. Sounds like a bit of a stretch for a franchise contemplating the release of its fourth installment. However, an Iron Man 4 is still likely to attract large audiences.
Another factor here: Disney's Frozen proves that Disney never dies. It might take a nap for a while, but even if it does, it's still a sleeping beauty. Therefore, an investment in Disney has always been, and should remain, a quality long-term option.
Note: another Thor installment is likely, but there are no official plans as of yet.
No. 1: Warner Bros.
2013 Market Share: 17.1%
Movies That Grossed At Least $100 Million Domestically: Man of Steel ($291,045,518), Gravity ($254,861,229), The Hobbit: The Desolation of Smaug ($201,542,078), We're the Millers ($150,394,119), The Great Gatsby ($144,840,419), The Conjuring ($137,400,141), The Hangover Part III ($112,200,072), Pacific Rim ($101,802,906)
Warner Bros. is a subsidiary of Time Warner (NYSE: TWX ) .
The most important note here is that there will be a sequel to Man of Steel, with the catchy title of Superman vs. Batman. But don't let the title throw you off. According to David Alter, a movie producer, and Batman-on-Film, the villains will be Lex Luther and Doomsday. The movie is due to be released on July 15, 2015.
The Hobbit: There and Back should also present significant upside potential at the box office. It's due to be released on December 17, 2014.
If you look at the Warner Bros. title list above, the only movie that moviegoers saw as a miss was The Hangover Part III. Otherwise, Warner Bros. is very consistent. Therefore, if you're looking to invest in a movie studio, then you might want to consider Warner Bros. This can be done by investing in Time Warner.
But is this the same company that will dominate the living room?
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.