Anyone who had feared that Hollywood had lost interest in films based on comic books can rest easy. Marvel's The Avengers, an epic superhero team-up starring Robert Downey Jr. and Scarlett Johansson, has set records on the way to taking in more than $1.4 billion at the worldwide box office.
Enthusiasm for The Avengers is both a symptom of and a booster for enthusiasm about comics in all forms: movies, TV series, and, of course, books. Call it the Silver Age of comic book media -- it'll be on gilded display starting Thursday at San Diego's annual Comic-Con, which draws more than 125,000 fans each year. (Nearby and can't wait? Preview night starts at 6 p.m. Wednesday.)
Just as the comic book publishing business had its Golden Age with the introduction of Batman and Superman in the 1930s, followed by a Silver Age that saw the likes of the Spider-Man and X-Men books come to the fore, comic book movies are enjoying a run not seen since Christopher Reeve and Michael Keaton brought Superman and Batman to the screen in the 1980s.
Skeptics might find that surprising, if only because -- until recently -- comic movies had been the source of just as many misses as hits. Avengers prequels Captain America: The First Avenger, Thor, and Iron Man 2 were the rare winners in the four years since Christopher Nolan's 2008 epic, The Dark Knight, turned out audiences in record numbers. Box-office losers Green Lantern and Cowboys & Aliens dominated last year's headlines.
Lifting the curtain... on a big pile of cash
But if 2011 was a bust at the box office, 2012 is turning out to be a bonanza:
Of course, this list doesn't include the final installment of Nolan's Batman trilogy, The Dark Knight Rises, which debuts nationally next week on July 20. Naturally, Time Warner (TWX) and the folks behind the film will use the San Diego convention to promote it to fans.
But that's also just one of what are sure to be several important SDCC news events for those who invest in entertainment stocks. For example, CBS (CBS) owns premium channel Showtime, which recently purchased the rights to make the Image Comics series Chew, about a USDA "agent" who solves crimes by getting psychic impressions from what he eats, including -- from time to time -- people. (Yuck!) Executives might use SDCC to provide production details.
After all, this isn't the first time TV executives have fallen for edgy comics. Image also distributes the comic book The Walking Dead, now a popular cable series for AMC Networks (AMCX). Season three is due to kick off in October.
The Real World of Comic Books
Fandom and the business of comics are also getting more airtime. On YouTube, The Nerdist Channel, created from the popular podcast of the same name, broadcasts "Comic Book Club" for entertaining reviews of newly published comics and "Just Cos," a show about "cosplay" -- a fancy term for dress-up where the subject is usually some sort of known movie, TV, or comic book character.
3 Super Ways You Can Profit From the New Comic Book Media Boom
Raise your hand if you watched fewer movies at the theater this year than you did in 2011. Heading toward the final few days at the box office, 2012 is shaping up to be a theatrical dud. This will be the first time that the industry posts back-to-back years of declining receipts in more than two decades.
Here's another alarming statistic: 2011 will be the first year since 1995 that domestic theaters fail to ring up 1.3 billion movie tickets.
Is it the quality of the movies or the quantity of bills in consumer wallets during these economically challenging times? What if this is a more problematic -- permanent -- trend? What if the waning attention span of new generations spoiled by social networking and the popularity of home-based streaming are eating into the market?
Before the situation gets any worse, let's go over a few things that the industry can do to beef up interest in celluloid.
Inflation is a part of life at the multiplex. Exhibitors inch their ticket prices higher every passing year. You have to go all the way back to 1993 -- a whopping 18 years -- to find the last time that the average ticket price actually declined over the previous year.
That's not right.
Sure, it makes sense on the surface. Minimum wages inch higher. Film production costs escalate. Inflation doesn't take a holiday. However, it doesn't make sense for actual ticket prices to increase during economic lulls. The annual increase hasn't been much in 2011. The average price for a screening is $7.96, just ahead of last year's $7.89 ransom. However, just five years ago the average was at a more reasonable $6.55 per ticket.
The growing popularity of premium cinema is playing a part in this metric. Folks have been willing to pay a little more for IMAX (IMAX) and RealD (RLD) 3-D screenings over traditional showings. However, as attendance is off by 5% this year -- after stumbling nearly 6% in 2010 -- maybe some price breaks are in order.
Chains have been promoting earlier matinees at lower price points, but maybe an entire week or month of rollback pricing is necessary to get folks who have sworn off pricey outings to rediscover the joys of cinema on the big screen.
Instituting lower prices as movies age is another idea, though it probably wouldn't work for exhibitors that take a larger share of box office receipts later in a new release's run. However, studios may need to revisit that relationship, because something needs to give.
Multiplex operators have spent the past few years upgrading their projection systems. The shift to digital platforms isn't just about crisper images-- movie studios save a bundle by not having to ship out pricey reels.
The other thing digital projection systems allow is easier updates.
Hollywood and exhibitors should cash in on the ability to differentiate a product as it ages. The same die-hard fans who just have to see a movie the week it comes out may also be the same ones to come back if a blooper reel is added two weeks later. It may be too ambitious to expect an alternate director's cut during the theatrical screening process, but tacking on deleted scenes or a "making of" clip at the end may encourage repeat viewings.
Yes, padding a film will make it longer, but it's not as if theaters are filling up for most movies after the first week or two. If anything, the extras can be added during the slower weekday screenings.
Nothing can sink a bad movie faster than ho-hum word of mouth. Twitter and Facebook -- and even film critic aggregator Rotten Tomatoes -- can kill a theatrical release quicker than ever these days.
Theater owners need to embrace the technology that may very well be emptying theaters. Hollywood can either embrace Web 2.0 or let it defeat celluloid the way it has for two years running.
Studios already use social media to promote their movies, but exhibitors have been slow to catch on. If Foursquare or Facebook show friends "checking in" near a movie theater for something else, why can't it hit them all with a sponsored movie suggestion? Encourage more people to come along by offering group discounts on tickets or perhaps concessions during these social media promotions.
Movie studios with active Twitter feeds or Facebook fan pages can also do a better job of encouraging friends to head out to the local multiplex for a specific showing.
Folks have different expectations from theatrical outings. Couples want quiet screenings without rowdy teens. Parents with young children don't want to risk offending nearby patrons when their kids act up. Older patrons may have a problem with a foreign film whose subtitles are too small or a conventional movie that may not be loud enough.
Theater chains have spent the past few years packing as many screens as they can in a venue in order to show as many movies as possible, but they're behind the curve in differentiating the actual screenings.
Some theaters are already offering special showings. AMC offers select screenings for families with autistic children on weekend mornings that have the lights turned up and the sound turned down. No one gives parents a stern look when autistic kids act up during these Sensory Friendly Film viewings.
How about the other end of the spectrum? Why aren't there some late-night screenings actively patrolled for scene-making revelers? Wouldn't you go see more movies if you were assured that loud and rowdy patrons would be whisked away at select screenings?
I haven't delved into concessions, but why can't some screenings feature updated snacks and premium food offerings to encourage folks to pay up for a different experience? Even if it means outsourcing operations to have a popular barista joint beef up coffee drinks by night and a hot local pizzeria spruce up pie offerings by day, it's all about getting folks to rally around select screenings -- and then collecting their information to make sure that they are alerted as to when such screenings will happen again.
Let's move ahead a couple of years.
I'm at a movie theater, mowing down some tasty boneless wings that Buffalo Wild Wings provides to the exhibitor every Thursday night. I'm sitting in the row reserved for Facebook meet-ups, along with some of my friends who just happened to be in the area. I'm watching a screening made exclusively for repeat viewers of a pretty loopy Chris Nolan flick. It's OK if someone blurts out the ending, since we've all seen it before.
Then again, we haven't seen this particular version. Folks who bought tickets to previous screenings were given unique ticket codes that they could use to vote online for changes that could be made to the story. We're about to see the alternate version -- or at least the one that the majority in this particular theater wanted.
Everybody wins. The studio and exhibitor get me twice. I get to enjoy a movie again on an entirely different level. This scenario may be far-fetched, but it may be what has to happen if the local exhibitor is still around at that point.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Buffalo Wild Wings. Motley Fool newsletter services have recommended buying shares of Buffalo Wild Wings and IMAX.
AMC, meanwhile, has ordered a second season of the niche reality show Comic Book Men, starring writer and director Kevin Smith and friends who run a New Jersey area comic book store. National Geographic Channel has a competing series called Comic Store Heroes, which debuts on Friday.
Three Ways to Profit
All of which is to say that the business of comic books is huge and getting bigger by the day. That's an opportunity for investors who buy with an eye toward how comics will influence profits. Here are three potential winners:
Walt Disney (DIS): Though Disney is already a winner because of The Avengers, investors may not realize that the House of Mouse also renegotiated a deal last year with Sony (SNE) that required the two companies share merchandising receipts from Spider-Man films. No longer. Disney gave up its rights to a share of the box-office haul from Sony's Spidey flicks in exchange for exclusive merchandising rights to one of Marvel's core characters. Smart.
IMAX (IMAX): The inventor of the large-screen viewing experience should see a boost when The Dark Knight Rises debuts at the end of the month. Several scenes were shot in the IMAX format, and more than 100,000 tickets have been sold already. A good portion of the proceeds is likely to be for premium showings.
Time Warner: Quite possibly comic book central when it comes to businesses benefiting from the shift. Not only is the company home to DC Entertainment, and therefore poised to profit from The Dark Knight Rises, but it's also owner of HBO and Warner Studios, which produces The Big Bang Theory, whose main characters regularly spend onscreen time at a comic book store.
What about investing in the comics themselves, you ask? Heritage Auctions is preparing a sale of rare high-grade comics from the 1960s that could fetch as much as $9 million -- several orders of magnitude more than what Joe or Jane Collector would have paid buying them off the newsstand years ago.
So enjoy comics. Introduce your kids to them. Take in a comic book movie or two. Just don't bet your retirement on a comic book collection. Instead, bet on the companies that make reading and collecting comics possible in the first place.
Motley Fool contributor Tim Beyers is a longtime comic book collector who owns more than 2,300 comics. He also owned shares of Walt Disney and Time Warner at the time of publication. The Motley Fool owns shares of Walt Disney and has sold shares of Sony short. Motley Fool newsletter services have recommended buying shares of Walt Disney and IMAX.