Seth Gilbert, 03-20-2007
The first days of spring are just here so it seems a bit premature to look ahead to summer. But summer is not too far off and with it, come the summer blockbusters – the big, spectacles that often define a movie studios financials for the year.
In line with Hollywood’s tendency to try and milk as much from established franchises as possible, this year’s scheduled slate includes an unusually high number of sequels. Among the highly anticipated titles there will be one Part 5, one 4th installment, at least 6 movies which are the 2nd sequel (or 3rd installment) and at least two true sequels (2nd installments).
Here’s a brief look at some of these titles which marketing machines have been promoting since before the holiday lights were even put away. Here is also a look at just how lucrative the franchises have been (e.g. why they keep getting green-lighted for new installments):
(Note: These numbers, from BoxOfficeMojo.com show only the Box Office returns for the franchises, they don’t include numbers for the DVD sales and merchandising/licensing revenue which are (for most of these movies) equally substantial)
Seth Gilbert, 02-27-2007
Blockbuster (NYSE: BBI, BBI.B), reported Q4 earnings.
For the quarter, net income was down to $12.9m ($.05/share) from $18m ($.09/share). Revenues increased 1.4% to $1.51b. Online subscribers increased by 700k during the period. Operating income totaled 445.8m, down from $57m in the prior year.
For the full year, 2006 revenues decreased 3.5% $5.52 billion – attributed by the company to the closing of stores. Operating income for the year was at $79.1m, versus a loss of $388m in the prior year (which included a $341m non-cash charge).
More detailed press coverage on Blockbuster’s finances can be found at:
Yahoo Finance
Google Finance
Marketwatch
Seth Gilbert, 02-22-2007
I looked at the prospect of hiring some off-shore programmers to handle a few items for this site. From a cost standpoint, the cost savings were a tempting lure for a small site like Metue, especially in comparison to hiring programmers locally in Silicon Valley. Ultimately I did all but a couple tiny things myself. For me, I saw it as an opportunity to get my hands dirty and learn more about web development. My tasks were also not that complicated.
If I had a big project, or needed more specialized services – and if I had the means to manage the workflow effectively (something not as easily done with a single project freelancer) I’d seriously consider using programming services overseas – India, Eastern Europe etc.
On the heals of my experience, I wasn’t surprised when I saw news that Sony’s Special Effects and animation arm, Sony Pictures Imageworks (SPI) is expanding to far beyond it’s Culver City campus’ geography.
SPI acquired a 51 percent equity stake in Chennai India based effects and animation studio FrameFlow. FrameFlow will change its name to Imageworks India and will work together with Sony Pictures Imageworks’ facility in Culver City, California. Click to Read More
Seth Gilbert, 02-15-2007
Lionsgate (NYSE: LGF), the maker/distributor of television, movie and music content including popular programming like Showtime’s Weeds, announced results of Q3 on Tuesday (year end results due in early April) .
For the quarter ended Dec 31, 2006, revenues were up 11% to $254.5m. Operating income was up 270%. International revnue was up 90%. Home movie and theatrical operations saw single digit revenue declines but free cash flow increased by well over 100% to $50.7m
Sequels do out later in the year to its Saw and Hostel movie franchises are expected to provide solid growth for the company. Rumors of the company being a potential acquisition target are encouraged by their positive growth.
More detailed press coverage on Lionsgate’s finances can be found at:
Yahoo Finance
Google Finance
Marketwatch
Seth Gilbert, 02-14-2007
Apple and Lionsgate announced an agreement earlier this week to add titles from the Lionsgate library to the movie and television content available on iTunes. From an analysts perspective there isn’t a tremendous amount to comment on regarding the announcement, but the deal is a notable achievement for Apple in their efforts to increase their content pool.
Lionsgate has acquired a large and diverse film library which includes movie titles ranging from Academy Award winner Crash to horror franchises like Saw as well as television hits. Facing competition from Wal-mart, a multitude of internet-video startups, and joint ventures like Amazon-Tivo, having these titles will help Apple remain competitive with downloadable video.
Seth Gilbert, 02-13-2007
Tax breaks, subsidies, cheaper labor, lower overhead – manufacturers have long found overseas production to be cheaper. Software developers have also drawn the same conclusion and shipped some of their development to overseas firms from Ireland to India. Why not the same for digital animation?
A recent article in Forbes suggests Imagi, a Hong Kong based Computer Graphics animator is trying to be an “Asia’s answer to Pixar.” I don’t entirely agree. The facts in the article lead me to believe that recently appointed CEO Douglas Glen is positioning Imagi to be both an offshore partner of choice for CG Animation as well as a standalone animation studio. I think the company is going to go after both contract work and the development of their own franchises.
Glen is no stranger to off-shoring, nor its benefits. Prior to taking the helm at Imagi in September 2006, Glen worked at toy giant Mattel where he was president of a media division responsible for software and electronics. Mattel often relies on contracted Asian manufacturing. Glen was also an executive at Sega of America handling game development – and the gaming industry has a well publicized history of moving production to Asia in recent years but keeping creative control elsewhere. With his background, I’d also expect Glen will insure Imagi has a hand in the lucrative licensing market that surrounds big league animation franchises
Click to Read More
Seth Gilbert, 02-6-2007
It’s been a big week for Net Video convergence. A day after WalMart announced a wider entry into downloadable TV and Video, 
Amazon and Tivo are capturing headlines with a story which takes WalMart’s news and goes one better.
According to the articles, Amazon and Tivo are going live with a limited Beta test that will bring Amazon’s Unbox video download service directly to the TV through Tivo. Previously, Unbox downloaded videos, like similar services from Movielink and Cinema Now were set up for download and viewing on a PC.
During the Beta test, and presumably on broad release, users will sign up at Amazon and make purchases there. At the time of purchase they’ll be able to designate some combination of two computers/video devices or two Tivo units to watch the movie on. The content will then be downloaded to those devices. Downloads will take about one hour with average broadband connections. Backups can be burned to disc but they use the Windows Media copy protection DRM system and will not play in a home DVD player or on iPod’s. (Mac users will be able to download movies to Tivo’s but not their Macs). Click to Read More
