Avengers: Age of Ultronalready ranks among the biggest films in U.S. box office history. Image credit: Marvel Entertainment.
Hollywood is a funny business to begin with, but the movie business is even crazier. Why? Front-loaded economics means that the opening weekend can account for a huge portion of a film's box office profit.
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Here's a look at the five movies that, so far, have cashed in the most:
Source: Box Office Mojo.
The math behind opening-weekend maniaReports vary when it comes to how distributors (i.e., studios) and exhibitors (i.e., theaters) split the gate, but most agree that the Hollywood operators get the majority in the early weeks. For opening weekend, it can be as much as 90% of box office sales.
That's why you sawDisneyreleasing so many teasers and TV ads ahead ofAvengers: Age of Ultron. As both producer and distributor, the House of Mouse was on track to earn as much as $180 million -- in the U.S.alone-- from a $200 million open. Mixing in tens of millions more from early openings in foreign territories appeared to putAge of Ultronwithin striking distance of profitability on opening weekend, no small feat for a film that cost a reported $250 million to produce.
Only part of the equationAs important as a big opening weekend can be, three of the five top-grossing films of all time cashed in on the staying power that comes with positive word of mouth. Audiences were still packing theaters to see Avatar, Titanic, andFurious 7 weeks after release:
Source:Box Office Mojo.
What every investor should learn from thisWhat can we learn from all this? First, while Disney has the golden touch right now, every studio gets its turn.21st Century Fox is planning to add to theAvatar franchise. Universal has made huge sums from theFast and the Furious franchise.
Paramount still gets fees for cable screenings ofTitanic. And of course,Time Warner has done so well with theHarry Potter films that Warner Bros. CEO Kevin Tsujihara has commissioned a spinoff series based on the mythical Hogwarts textbook,Fantastic Beasts and Where to Find Them.
Getting back to the biggest opening weekends, I think it's also fair to say that:
- Studios will continue to make comic book movies.For now, the opening-weekend winners list is dominated by comic-book-inspired fare -- four of the top five, to be specific. Knowing how important strong starts can be, it's no wonder that studios continue to bet big on comics-inspired properties.
- Robert Downey Jr. is Hollywood's hottest property.Of those five, actor Robert Downey Jr. has either starred in or headlined three. No performer is more bankable right now, which is why it's easy to envision next year'sCaptain America: Civil War -- another of his headliners -- earning at least $1 billion in worldwide box office grosses.
- Moviegoers come out for franchises.Unproven properties have a tougher opening weekend sell than existing franchises. That's why Hollywood executives spend so much time chasing franchises. Known properties can draft off the films that came before, which makes them less dependent on buzz in the moment, and more likely to earn a return for the studio and its shareholders.
Big opening weekends at the box office make for records, for legends, and for good copy. But when it comes to the business of investing in the best entertainment stocks, short-term box office wins are only as good as the long-term franchises they lead to.
The article The Biggest Opening Weekends in Box Office History originally appeared on Fool.com.
Tim Beyershas lived in a mouse house before. Thankfully, that's no longer true. He's also a member of theMotley Fool Rule Breakersstock-picking team and theMotley Fool SupernovaOdyssey I mission and owned shares of Apple,Time Warner, and Walt Disneyat the time of publication. Check out Tim'sweb homeandportfolio holdingsor connect with him onGoogle+,Tumblr, or Twitter, where he goes by@milehighfool.The Motley Fool recommends Apple and Walt Disney. The Motley Fool owns shares of Apple and Walt Disney. 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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