Following a year that failed to produce a single blockbuster movie in 2014, Comcast's(NASDAQ:CMCSA) Universal Studios has to like how the release of Fifty Shades of Grey is shaping up for this weekend.
By most accounts the popular novel-turned-movie is looking to post some eye-popping numbers:
- It's expected to have a better than $60 million opening over the Valentine's Day weekend
- Movie ticket service Fandango says it's the fastest-selling R-rated title in its 15-year history
- The movie represented 60% of Fandango's ticket sales, more than a week before its opening
- Boxofficemojo.com says it's the widest R-rated opening ever, ahead of Hangover II and Watchmen
Not that the superlatives have translated into positive critical reviews for the movie, with words like "bland," "wooden," and "tedious" used to characterize the acting. But most say it's better written than the book, which is something.
A built-in audience
Fans of the book, however, probably don't care about reviews, so determined are they to see it. For example, Peter Jackson's Lord of the Rings trilogy has riled up a lot of Tolkien devotees for the artistic license he took with the source material, but the movies have still generated a combined $1 billion lifetime domestic gross and another $1.9 billion worldwide. Fifty Shades could similarly ring the registers regardless of what some people think.
There's a level of buildup going into the weekend from the anticipation over how the characters and scenes will be portrayed. With more than 100 million copies sold of the three books in the Fifty Shades series, there will be a limitless number of critics. There was already pushback from fans over casting the former Calvin Klein model Jamie Dornan in the lead role of Christian Grey. The real test will come next week when there's the inevitable drop-off in ticket sales.
Will it have legs?
A strong movie such as Time Warner's (NYSE:TWX) American Sniper, which grossed over $135 million in its first week of wide release, saw a 38% decline in receipts the following week, but still pulled in $81 million and is a bona fide megahit (it earned another $40 million in its third week).
Even opening on over 3,400 screens, including 75 IMAX (NYSE:IMAX) widescreen theaters, Fifty Shades won't pull in those kinds of numbers for Comcast's NBCUniversal, but that doesn't mean it won't still be considered a success. And it needs one.
Universal's share of the box office fell below 11% last year, down from 13% in 2013, and trailing well behind industry leader 20th Century Fox, which had a 17.3% share. The rest of the list includes Buena Vista (15.6%), Warner Bros. (15.1%), and Sony's (NYSE:SNE)Columbia (12.1%).
Its biggest hit in 2014 was the Seth Rogan-Zac Efron comedy Neighbors, which pulled in $49 million in its opening weekend and had a $268 million worldwide gross. Profitable, to be sure, on a movie that had a production budget of $18 million, but not the sort of numbers studio heads salivate over.
Tie-ins could dominate
Perhaps just as lucrative will be all the product tie-ins that are going along with the movie. No, you won't find a set of handcuffs included with a Happy Meal, but you may find them in otherwise family friendly department stores like Target (NYSE:TGT), which rolled out adult-themed lines of Shades gear in the adult health area of its store.
According to the market researchers at IBISWorld, the publication of the first Fifty Shades book sparked a 7.5% jump in sales of adult-themed products in 2013, hitting $610 million. They estimate it will reach $792 million by 2018, though how much the movie's release will adjust that number higher.
Fifty Shades of Grey had an estimated $40 million production budget, which means the ticket presales already guarantee Universal Studios a hit movie and two sequels have already been confirmed. The studio's film division suffered a 15% drop in revenues over the first nine months of 2014, and though this flick won't make up the difference by itself, it could be a big kickoff to Comcast's new year allowing it to put behind it its year without a blockbuster.
Rich Duprey has no position in any stocks mentioned, but was still dragged to an early premiere of "Fifty Shades of Grey." He'll leave the movie review to the professionals. The Motley Fool recommends Imax. The Motley Fool owns shares of Imax. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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