Well, I was wrong about Sony's (NYSE: SNE) Hancock. Sure, I knew it was going to be the number-one movie over the Fourth of July holiday period, but come on, who didn't know that? As of this writing, Boxofficemojo estimates that the Will Smith picture took in $66 million over the three-day timeframe. However, Hancock had opened earlier in the week, and I thought that, by the time all was said and done, the film's cumulative gross by now would have been well over $100 million. Well, the cume now stands at around $107 million. I was thinking more along the lines of $125 million and above for a total tally by this point. Hancock came in a little weaker than expected, considering what seemed to be a very awesome cinematic experience as communicated by the marketing campaign.
Disney's (NYSE: DIS) Wall-E came in second over the weekend with around $33 million. The Pixar cartoon now has about $128 million to its credit. Wanted, distributed by General Electric's (NYSE: GE) Universal, was third with over $20 million. Time Warner's (NYSE: TWX) Get Smart and DreamWorks Animation's (NYSE: DWA) Kung Fu Panda were fourth and fifth, respectively. Here's an interesting note on Get Smart. Even after the holiday weekend, and after having been out in the marketplace for a few weekends, it still has yet to reach a total gross of $100 million. As of now, it has a little over $98 million in the bank. That number may change a bit when final figures are in, but in this day and age, when a summer movie with such star power (it stars Steve Carell) doesn't reach $100 million by the second weekend or sooner, it can't be considered super blockbuster material.
Well, it wasn't a terribly exciting box-office weekend. Frankly, I thought there would be more fireworks for the Fourth from these films. And as for all the stocks mentioned here, the bear market will probably keep them weak. The most direct play on the movie business is obviously DreamWorks Animation, and I would wait for that one to come in more before thinking about buying.
Disclosure: I own Disney and GE; positions can change at any time.
It's the Fourth of July weekend, and movie studios want to capture as much money for their films as possible, even if they've already been in the theaters for several weeks. No matter what, though, Sony (NYSE: SNE)'s Hancock, starring the always excellent Will Smith, is set to be the financial superhero of the weekend. Already, as of this writing, the film has taken in about $24 million through Wednesday, according to Boxofficemojo. The movie had some showings on Tuesday before its official debut in the middle of the week. It was number one on Wednesday, followed by Disney (NYSE: DIS)'s Wall-E. The robot flick so far has a total tally of around $86 million.
Poor Marvel (NYSE: MVL) and its The Incredible Hulk project. Will anybody be interested in seeing the big green guy now that Hancock is in the marketplace? Indeed, Hulk took in less than a million bucks on Wednesday, and it ranked number seven for that day. Looks like the Hulk fever is winding down at the multiplex, and it looks like Marvel's stock has had its run for the time being. The stock closed on Thursday at $31.20, well away from the 52-week high of $37.41. I still hold Marvel shares, and although there are no big catalysts on the immediate horizon, I have a long-term outlook on the company. Still, the trader in me wishes that I had lightened up on the position back at the $37 level to book some gains.
Hancock should do well north of $100 million once the Fourth of July holiday period has passed. The marketing, in my opinion, is very compelling, and from what I know about the story, it's a smart idea that provides a nice balance to the frivolous plots of Iron Man and Hulk (I'm using the term "frivolous" here with affection). Sony's scored a hit, maybe even a new franchise (I haven't seen the film, so I can't say if a sequel is feasible or not within the confines of the concept), but it won't do much to move the company's stock. Those looking to play the Hollywood game might want to wait for Marvel to pull back further from current levels.
Disclosure: I own Disney and Marvel; positions can change at any time.
This post is part of my series featuring established companies and the smaller, more aggressive or innovative rivals that may eventually succeed them.
Who would have thought that privately held, 2002 upstart Vizio could upset the LCD TV market and knock giant Sony (NYSE: SNE) off of its perch?
The world of televisions is transforming itself to flat-panel, high-definition and big screens. Vizio was founded in 2002 and is taking major market share from Sony and former second fiddle Samsung. Vizio's promise to its customers is simple -- small is big. The company has only 85 employees, mostly in sales and marketing, and outsources the manufacturing to other suppliers. The key to the Vizio story is getting the product through as many retail doors as possible.
The company has signed up a couple of big wigs in the retail sales channel: Wal-Mart (NYSE: WMT) and Costco (NASDAQ: COST), to go along with Sears (NASDAQ: SHLD) and Circuit City (NYSE: CC). Vizio is also available from Dell Computers e-commerce web site (NASDAQ: DELL). Vizio understands it's all about distribution, distribution, distribution.
Vizio has taken the marketing position that television decisions typically are the domain of the male of a household and, as such, has partnered up with the NFL. Football and big screen TVs are synonymous. Vizio has signed All-Pro running back LaDainian Tomlinson of the San Diego Chargers to be its spokesperson. Tomlinson is regarded as both a fine gentleman and perhaps the greatest running back since Barry Sanders. His wholesome image is magical to Vizio's marketing program.
Since Apple Inc (NASDAQ: AAPL) is no longer insisting on revenue sharing from mobile operators selling its iPhone, China Mobile Ltd (NYSE: CHL) said this cleared the biggest hurdle in bringing the iPhone to mainland China. They just have to resolve some practical issues now.
KB Home (NYSE: KBH) shares climbed over 5.8% in after-hours trading Thursday. The builder is to report results this morning, a quarterly loss is expected.
Sony Ericsson, the joint venture between Sony (NYSE: SNE) and Ericsson (NASDAQ: ERIC) warned Friday it might not see any profit growth in the second quarter, due to slowing demand for some of its higher-priced phones and a delay in shipping new models to the market and will also experience a gross margin squeeze. ERIC shares are down about 6% in premarket trading.
Man, it stinks to be Sony (NYSE: SNE). According to Forbes, the media company has lost $3.3 billion on its PlayStation 3 console so far. Wow. When the mighty fall, they fall hard. The PlayStation 3 is a heck of a powerful system, but the Nintendo (OTC: NTDOY) Wii has captivated players not only with its innovative nature, but with its affordable price. Right from the start, Nintendo decided to go with less costly components so that each console sold would generate a profit. Its retail price of $250 is a lot better than $500 to a consumer's wallet, especially when a cheaper system is also a lot of fun.
And talk about a hit to PlayStation's brand equity. Here's what most people think about the third PlayStation (from my experience at least): it doesn't have a lot of games available, there aren't many kid-friendly titles offered, I don't want to pay that much for a PlayStation system so I'll just wait for further price cuts. Boy, imagine if Sony has to cut the price even further. Sony already loses a bundle on each system.
Not only is Nintendo hurting Sony, but Microsoft (NASDAQ: MSFT) and its Xbox 360 is also out there causing damage. You can pick up a low-end version of the Xbox 360 without a hard drive for around $280. Too bad Sony decided to incorporate Blu-ray and hard drives into its business model for the PlayStation 3. Admittedly, I thought it was the right thing to do at the time as well, but I guess Sony and I have been proven wrong.
Nokia (NYSE: NOK) has decided it would like to get beat up and spit out by the entertainment industry. It also thinks it can compete with Apple (NASDAQ: AAPL) in the content distribution business.
Nokia is the world's largest seller of handsets, with about 40% of the market. Since the margins on that business are being pushed down by lower price for phones sold in places like China and India, the firm needs somewhere else to turn for revenue. Hollywood, where budgets mean nothing, seems like a good choice.
According toThe New York Times, Apple's lock on digital music could help Nokia. The paper writes, "Another possible advantage for Nokia is that music companies welcome a challenger to Apple. They are wary of Apple's growing power in digital music distribution."
But Apple is not the only problem. Dozens of companies from Amazon (NASDAQ: AMZN) to Sony (NYSE: SNE) are trying to get a piece of the portable entertainment pie. Most content is likely to be available to all distributors under some kind of contract. The large media companies have little reason to restrict themselves in exclusive deals.
The reason Nokia will probably never be a big "media" company is that a hundred other companies want the same thing. Everyone can't win.
Douglas A. McIntyre is an editor at 247wallst.com.
Steven Spielberg's DreamWorks baby is preparing to leave Viacom (NYSE: VIA). That sounds bad, doesn't it? I mean, Viacom should, in theory, be freaked out about losing the star asset.
Yet, an analyst working at JP Morgan has a different take on things. According to Bloomberg, Imran Khan thinks that DreamWorks may be perceived as an expensive business asset. He pointed out that the expenses associated with DreamWorks helped drive a 22% decline in operating income for Viacom's film division in 2007. He further pointed out that films with more modest budgets will aid in generating better returns and will, in fact, reduce the risk of investing in the movie business.
Khan is absolutely correct on his call. I've been talking about the need to reduce film budgets for a long time now, probably to the point where people are sick of me, so I'm always glad when I read an opinion such as this. Only problem is, will the studios listen? Well, they should. Disney (NYSE: DIS), Time Warner (NYSE: TWX), News Corp. (NYSE: NWS), and Sony (NYSE: SNE) would all benefit from increased financial restraint when it comes to the business plans of their respective film units.
I love summer, not only for the weather, but also for all the movies making their way to the multiplexes. According to this article at Marketwatch, for the first six weeks of the U.S. summer box-office season, the total gross for theatrical movies hit $1.46 billion, a statistic that represents about a 5% increase year-over-year in the comparable period. You can thank hits such as Marvel's (NYSE: MVL) Iron Man and Viacom's (NYSE: VIA) Indiana Jones and the Kingdom of the Crystal Skull for driving the nice results.
Now, I don't mean to rain on this parade, but I'm afraid I find myself in a similar frame of mind in terms of a piece I wrote back in March about the 2007 movie-business statistics. You see, I always like to look at number of tickets sold as a barometer for the true health of Hollywood. The number of tickets sold increased 1.6% to 206.2 million. The average price of a movie ticket rose 2.9% to $7.08. Now, while I am glad to see an increase this time around in terms of number of tickets sold, I don't find a 1.6% increase terribly exciting. It tells me that the theater industry still needs to convince people that it's fun to get out of the house, away from the giant televisions and the snazzy home-theater systems, and chomp on overpriced popcorn in a dark auditorium. Going to movie theaters is something that, in my opinion, can't truly be replicated in the home. A lot of people don't share that opinion, however.
The challenge for Disney (NYSE: DIS), Time Warner (NYSE: TWX), Sony (NYSE: SNE), and General Electric's (NYSE: GE) Universal is to make people feel that waiting for the DVD shouldn't be the norm. The shared experience of a movie screening is a unique part of culture, and studios need to communicate this fact through their marketing campaigns. I do think there is more work ahead for Hollywood. Focus on the number of tickets sold, that's the big metric.
Disclosure: I own Disney and GE; positions can change at any time.
At least one of my stocks is doing pretty well in this terrible, depressing market environment. Activision (NASDAQ: ATVI) hit a new 52-week high of $36.84 on Tuesday. It closed a little below that, but it was a great, high-volume day for the stock, one that saw the shares rise almost 5%.
Yes, with the Dow Jones index shedding 100 points, with every other stock in my portfolio in the red, including MFA (NYSE: MFA), which closed down to $6.66 -- the number of the beast, my friends -- Activision not only held its own, but it powered higher. Perhaps it's due to the new Guitar Hero game coming out for the DS. Perhaps there's a new wave of excitement over the merger now that investors are receiving their documents (I just got mine the other day, a big book full of wonderful information about the Activision/Vivendi agreement). No matter, though, it was Activision's day, since competitors Electronic Arts (NASDAQ: ERTS) and Take-Two Interactive (NASDAQ: TTWO) were down Tuesday, and THQ (NASDAQ: THQI) closed up only four measly pennies.
I love this price action, and I think it might be predicting a prosperous Q4 holiday season for the company, which will eventually be called Activision Blizzard after the merger. I'm also hoping the action indicates that the stock will be reasonably stable during the summer, which I think is going to be rough on the markets as oil and inflation headlines dominate the tape.
Media companies are turning to the internet as a distribution avenue more and more as each month passes, whether it works or not. Sony (NYSE:SNE) will release "Angel of Death" online and hope that this somehow drives DVD sales.
The way the release will be done is clearly set up to alienate consumers and will only drive resentment. According toThe Wall Street Journal, "The series will be released online eight minutes at a time, over 10 weeks." After that, the DVD of the program will come out. It will not appear in theaters or on TV.
Imagine how annoying it will be for potential viewers to have to go to websites over and over again before they can get the all of the "Angel of Death" content. Many people will simply abandon trying to collect all of the installments.
Sony will probably get plenty of hate mail.
Douglas A. McIntyre is an editor at 2 47wallst.com
Marvel's (NYSE: MVL) movie The Incredible Hulk was incredibly disappointing (to me at least). No, I'm not talking about the quality of the movie. I didn't actually see it. But Boxofficemojo is reporting that it has grossed an estimated $54.5 million at domestic theaters over the weekend. While that was good enough for first place, it wasn't good enough for shareholders. The movie bombed, plain and simple.
Why am I being so hard on a number-one movie? It's not so difficult to understand. The awful Hulk movie that was released back in 2003 grossed $62.1 million in its opening weekend. There's no way to spin this. We've had five years of inflation between that terrible flick and this new iteration. Simply put, it should have grossed at least $65/$70 million, especially on the heels of Iron Man. I'm a shareholder of Marvel, and I don't like the fact that the success of Marvel's first movie of the summer didn't synergize a little better with the angry green guy.
Focusing on the positive, Marvel was able to beat DreamWorks Animation (NYSE: DWA) and its Kung Fu Panda project. The cartoon took in about $34 million and came in second. M. Night Shyamalan's The Happening, distributed by News Corp. (NYSE: NWS), did okay by coming in third with a gross of around $30 million. Some analysts thought that the horror flick would do a little bit less than that number. Personally, I thought it should have come in second place considering Shyamalan's name, but I guess people aren't as excited as they used to be about his exercises in cinematic twists (the fact that it was rated R also inhibited its blockbuster potential). Sony's (NYSE: SNE) Adam Sandler comedy You Don't Mess with the Zohan did in fact get messed with yet again, dropping two spots to fourth place, grossing about $16 million. I've heard bad reviews on this one. Viacom (NYSE: VIA) and Indiana Jones and the Kingdom of the Crystal Skull were daring enough for fifth place. Everyone's favorite archaeologist has now breached the $275 million level. Great to see a favorite character of mine from the past doing so well.
Take-Two Interactive's (NASDAQ: TTWO) Grand Theft Auto IV game stole the number-one position on the software sales chart for May, according to data from market research firm NPD. It sold over 1.3 million copies last month, and it has moved over 4 million since it hit the street. I figured Take-Two would be taking the top slot here, but the big question on my mind pertained to how Nintendo's (OTC: NTDOY) Wii system would do in May. After all, the fad has to wear out at some point, right? At some magical juncture, either Sony's (NYSE: SNE) PlayStation 3 or Microsoft's (NASDAQ: MSFT) Xbox 360 will displace the Wii and become the top-selling system of the month.
Well, that hasn't happened yet. The Wii sold the most, moving 675,000 systems. That was more than three times the amount of consoles sold by PlayStation 3. And as for the Xbox 360, that came in dead last, moving only 187,000 units. All told, total video-game sales, including hardware and games, increased 37% year-over-year. Yep, video games are still hot.
I'm going to predict that the Wii Fit will be the top-selling game package for the month of June. This thing is flying off the shelves in my area, even at $90 (apparently, high fuel costs aren't hurting Nintendo's clientele). Does that mean that Nintendo might make for a good short-term trade? Maybe, but I'd prefer buying it safely below $60 per share. As of this writing, it's trading well above $60 per share. I continue to hold Activision (NASDAQ: ATVI) as my play on video games, and will be keeping Electronic Arts (NASDAQ: ERTS) in the back of my mind as August approaches, since that will be when the new Madden game arrives in stores. Not sure if that's worthy of a trade yet.
Disclosure: I own Activision; positions can change at any time.
Germany-based Bertelsmann has valued its half of Sony BMG Music Entertainment between $1.2 and $1.5 billion, according to a report by Billboard published Thursday. The company reportedly wants to pull out of the joint venture with Sony Corporation (NYSE: SNE), and the noted price would lower if Sony offered to buy some services from Bertelsmann. Apparently the separation was expected to take place this summer, but neither party has reached a satisfactory agreement on the price of the aforementioned half.
The venture between Sony and Bertelsmann started in 2004 and is set to expire in August 2009, but rumors have emerged from within Bertelsmann that a new deal will take place before the expiration date, according to Billboard. Despite these rumors, Bertelsmann CEO Hartmut Ostrowski revealed in January that there were three options at that time: Bertelsmann would take over 100% ownership, sell the company's 50% to Sony, or continue the venture. More frightening is the note by Billboard that Bertelsmann's CFO Thomas Rabe has "reportedly met with at least two private equity companies to discuss the possible sale of its share" in the months since Ostrowski revealed the options.
Sale to a private equity firm would mirror a similar sale that occurred last year with British-based EMI Group. The label responsible for groups like The Beatles and Coldplay sold out to private equity firm Terra Firma, which resulted in mass layoffs and a new management plan that has not benefited the label or its artists. Billboard also notes that industry sources expect much of the European management and control for Sony BMG to shift to the U.S. anyway. If that is the case, it would leave two of the four major record labels based in the United States. The other label is Warner Music Group (NYSE: WMG).
A number of markets in Asia were down 2% or more lead by the Shanghai Composite which is off 45% since the beginning of the year, according toMarketWatch.
In Japan, the Nikkei dropped 2.1% to 13,888.6. Sony (NYSE:SNE) was down 2.8% to 5,130 yen. Toyota (NYSE:TM) was off 2.7% to 5,400.
The Hang Seng fell 1.7% to 22,925.31. China Life (NYSE:LFC) fell 2.4% to 28.40 yuan. China Petroluem (NYSE:SNP) dropped 2.7% to 7.39.
This post is part of 
Man, it stinks to be 
I love summer, not only for the weather, but also for all the movies making their way to the multiplexes. According to this article at 
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