While Comcast (NASDAQ:CMCSA) had its problems in 2015, its Universal Pictures segment had an unprecedented year specifically with franchise films.
It's not that other segments of the business struggled. Cable was strong, despite cord-cutting fears, and even NBC put up strong numbers. but more than any new cable or Internet product, or even any of NBC's new hit shows, Comcast's best product in 2015 was clearly its blockbuster franchise movies.
This was a year when the company not only had hits, but it also produced films that either created or reinvigorated franchises. That makes movies including Jurassic World, Minions, Furious 7, and 50 Shades of Grey more important than any other product the company created.
It's not just about their value this year, but their value moving forward. These films (aside from Grey) are practically annuities that will pay off not just in future box office receipts, but also in toys, theme-park rides, video games, and more.
How good a year was it?
Though Disney's (NYSE:DIS) Star Wars: The Force Awakens could help its parent studio make a late push, Universal looks to have locked up the United States box-office crown for 2015, with nearly $2.4 billion in ticket sales as of Dec. 13, according to BoxOfficeMojo.com. That gives it 23.6% of the market, well ahead of Disney's Buena Vista label, which trails with about $1.6 billion, or 15.9%.
And the company didn't just do well in the United States. It also had three films -- Minions, Jurassic World, and Furious 7 -- that earned more than $1 billion each globally, the first time any studio has ever done that, the company claimed in a press release.
With a quarter left to go in the year, that left Comcast's movie studio with a 52.4% increase in revenue to $5.7 billion, compared with $3.7 billion in 2014. Operating cash flow also increased 72.2% to $1.1 billion, compared with $634 million in the first nine months of 2014.
It was a big year, but the reason its movies were Comcast's best products in 2015 is more due to what they will produce than what they've made so far.
It's a banner year for franchises
In addition to Minions, Jurassic World, Furious 7, and 50 Shades of Grey, Universal also had sequel-worthy hits with Pitch Perfect 2 and maybe even Amy Schumer's Train Wreck. In addition to simply continuing the series with new movies, most of these films will also pay off with rides at the company's theme parks and licensed products.
Specifically, the company's three billion-dollar hits all lend themselves well to brand expansion. Minions and the Fast & Furious franchise have already been adapted as theme-park rides, as has the earlier Jurassic Park film. Renewed interest in these franchises should drive more people to the company's theme parks in 2016 and beyond.
None of this was guaranteed
At the beginning of the year it was easy to make a case that any, or even all, of these films would fail. Minions was a spin-off from the popular Despicable Me series, and DreamWorks Animation struggled with its attempt to spin off Penguins of Madagascar from its Madagascar series. Jurassic World was also a risk because it was essentially a reboot, and Furious 7 was not only the seventh film in the series, but its production was also rocked by the death of star Paul Walker. Pitch Perfect 2 was also a risk because the first one was not that big a hit, and Grey was a wild card because of its racy subject matter.
The fact that all of these movies hit massively was an unprecedented success and more than made up for stumbles such as Ted 2 and the ill-fated Jem and the Holograms reboot. This will be a tough year for Universal and Comcast to repeat, but owning so many established franchises takes a lot of the guess work out of its film division.
These are now franchises that can be penciled in to its release slate every couple of years. That's a formula Disney has used to make its film business a sure thing, and it's one Universal has done well to copy.
Daniel Kline has no position in any stocks mentioned. He is not familiar with any of the shades of grey. The Motley Fool recommends DreamWorks Animation. 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.