The Hunger Games Performs Well Away from the Box Office for Lions Gate Entertainment
Some people underestimate the strength of The Hunger Games franchise. Even if you don't like the movies, you can't deny the franchise's power. This, of course, is a big positive for Lions Gate Entertainment . I have written several times about box-office numbers over the past several weeks, but in this case, we're going to take a look at how The Hunger Games franchise is performing well on subscription video-on-demand. Is the original Hunger Games the top SVOD performer so far in 2013, or does that title belong to a movie that can be traced back to Comcast or Disney ?
Top SVOD movie for 2013 (January-October)
NPD Group recently released information on the top SVOD performers through October in 2013. In other words, the following movies are the most-watched movies on services like Netflix and Amazon's Instant Video.
The Hunger Games did indeed take first place. This shouldn't come as a surprise to anyone. While the movie itself was a big box-office hit, the success of its sequel, The Hunger Games: Catching Fire, has also played a role.
When people see a good movie, they recommend it to others. However, if those others never saw the original, then they will watch the original prior to watching the sequel in the movie theater. This has definitely helped drive demand for original movies that have sequels. You also can't forget that unlike most movies, The Hunger Games is based on a successful book series. Therefore, many people who have heard good things about The Hunger Games franchise, especially after the sequel, will read the books, watch the original on SVOD, DVD, or Blu-ray, and then watch the sequel.
The point here is that The Hunger Games isn't just a movie; it's a franchise, and it's being explored by people in various ways. The number of Hunger Games fans is only going to grow as the next two installments are released over the next two years.
While The Hunger Games is the most impressive name on this list, let's see what two movies came in second and third place on SVOD so far in 2013.
The Avengers was the second-most watched movie on SVOD so far this year (through October). This isn't surprising considering the movie's box-office success. It had a budget of $220 million, and it grossed $623.3 million domestically as well as $1.5 billion worldwide. Its IMDb rating: 8.2 of 10. Its RottenTomatoes audience rating: 91%. In other words, 91% of the people who watched The Avengers enjoyed the movie.
The Avengers is a Marvel movie, and Marvel was acquired by Disney in 2009. When people think of Disney, they often think of fairytales, Mickey Mouse, and smiling faces. While these would be accurate perceptions, many people mistake this "niceness" as representative of a company that just hangs around and does OK. In reality, Disney is highly strategic and opportunistic, and it often crushes those who attempt to compete with it. That being the case, I'm a fan of Disney from an investing standpoint. Its newest release, Frozen, has been yet another home run. Thanks to such a strong brand that continuously builds strength, Disney has an ability to essentially print money with its movies.
The Lorax comes in third place on the SVOD 2013 list. The difference between The Lorax and The Hunger Games/The Avengers is that it's not a great movie according to audiences. For instance, it has a pedestrian 6.4 rating on IMDb and a ho-hum 64% audience approval rating on RottenTomatoes. At least it's consistent. The Lorax did well at the box office. It had a budget of $70 million, and it grossed $214 million domestically and $348.8 million globally.
The Lorax was produced by Illumination Entertainment, better known for the highly successful Despicable Me franchise. By the way, a third installment, Minions, will be released in 2015. Illumination Entertainment has a financing and distribution partnership with Universal Studios, which is owned by Comcast.
While The Lorax didn't receive a great audience reception, it did well fiscally. Also, the Despicable Me franchise isn't done pumping out hits. Both are positives for Comcast.
Profiting off the big (and small) screen
Lions Gate Entertainment, Disney, and Comcast have all proven that they're capable of generating revenue through successful movie releases. Disney and Comcast are highly diversified companies, which makes them more resilient to economic downturns. On the other hand, a movie's success won't drive their stock prices like it will for Lions Gate Entertainment, which relies heavily on its movies' success. In this regard, Lions Gate Entertainment couldn't be any hotter right now given the success of The Hunger Games franchise. In my opinion, the upside potential greatly outweighs the downside risk. However, please do you own research prior to making any investment decisions.
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The article The Hunger Games Performs Well Away from the Box Office for Lions Gate Entertainment originally appeared on Fool.com.
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