Since last year's summer movie preview featured mostly sequels and adaptations, this year's preview has been expanded to include more than just potential "blockbusters." The following is a chronological list of not only the most hyped film fare of the summer, but other noteworthy smaller entries, and a short commentary on each.



5/2 - Iron Man, Viacom (NYSE: VIA)'s Paramount Pictures
The first of two big Marvel Entertainment (NYSE: MVL) adaptations of the summer, the Robert Downey Jr. led Iron Man has been getting a ton of hype and critical acclaim. This is the second year that a comic book adaptation has kicked off the summer, following last year's Spider-Man 3, which grossed over $150M over its opening weekend.

5/9 - Speed Racer, Time Warner (NYSE: TWX)'s Warner Bros.
Another big-budget adaptation of a generations-old cartoon. Last year's Transformers was, to my surprise, a huge success, so maybe Speed Racer, in the capable directing hands of the Wachowskis, can be as well.

This summer was a very profitable one for box offices nationwide, with four movies grossing over $300M, and at least another nine grossing over $100M -- signaling in a big way the resurgence of the movie industry, which had been struggling for the last few years.

The four big $300M+ winners of the summer were Sony Corporation (ADR) (NYSE: SNE) 'sSpider-Man 3, which grossed $336M in the U.S., Viacom, Inc (NYSE: VIA)'s Paramount's Shrek the Third, which grossed $320M, Transformers, also from Paramount, which grossed $311M, and The Walt Disney Company (NYSE: DIS)'s Pirates of the Caribbean: At World's End, which grossed $308M.

Three of the four were third installments of well established big-budget franchises, so their success is hardly shocking, but the Transformers success clearly marks the start of a new blockbuster franchise (the release date of the sequel has been announced -- June 26, 2009). The robot-action extravaganza, which was directed by Michael Bay, was definitely a surprise, as I remarked in my summer movie preview that Transformers "has flop written all over it... there cannot possibly be enough substance in a story about alien robots that transform into vehicles to make this a hit with the general public." I was wrong -- very wrong. The movie killed at the box office, grossing over $330M on a $150M budget, and prompting a re-release on IMAX, which opened last week.

At Comic-Con this year, the Walt Disney Company (NYSE: DIS) announced its commitment to make all seven of the Chronicles of Narnia books into feature films, releasing one a year starting in May '08 with Prince Caspian. This decision follows the success of the adaptation of the first book -- The Chronicles of Narnia: The Lion, the Witch and the Wardrobe -- which grossed almost $300 million.

This decision is not surprising, following the conclusion of Disney's Pirates of the Caribbean trilogy, which has no immediate plans to continue. Disney is predictably looking for its next goldmine franchise, and what better to use than a seven book series which already had a successful start?

The only question is whether the quality of production will suffer in the sequels from such an ambitious filming schedule, and after Disney pulled off the Pirates trilogy with such dazzling effects, I doubt that will be a concern -- although the quality of the Pirates scripts did fade down the stretch. At least with these movies, the writers will have a classic source to guide them.

The Simpsons Movie, which has been 18 years in the making, is finally due to hit theaters July 27. The movie is creating quite a frenzy around the country -- with a dozen 7-Elevens in cities from New York to California turning into Kwik-E-Marts. They are also selling Simpsons branded products in all 7-Eleven stores (I bought a box of KrustyO's). The frenzy is even bigger in Springfield, Vermont, which was chosen to host the premier of the movie.

The biggest beneficiary of the movie will be the same company that has benefited from the long, successful run of the show -- News Corporation (NYSE: NWS). After 20 years on the small screen, making News Corp's Fox billions, the big screen version will look to take No. 1 at the box office. It shouldn't have any trouble, as most of this summer's blockbusters have already come and gone, and the other new movies out that week -- I Know Who Killed Me and No Reservations -- don't have anywhere near the hype, universal appeal or the marketing push of the Simpsons.

Other beneficiaries are the aforementioned 7-Eleven, which is owned by Seven-Eleven Japan Co, the privately-owned toy company McFarlane toys, which is making The Simpsons Movie toys, and Electronic Arts Inc (NADSAQ: ERTS), which is releasing a new Simpsons video game to coincide with the release of The Simpsons Movie on DVD.

For a look behind the scenes at the history of the longest running comedy on television, check out this article from Vanity Fair.

Movie Gallery (NASDAQ: MOVI), the parent company of Hollywood Video, is considering closing many of its 4,600 stores, putting the company up for sale, or both, after the second-largest brick-and-mortar video store rental chain, behind Blockbuster Inc (NYSE: BBI), failed to meet the requirements set by its lenders.

USA Today said the 2,000+ Hollywood Video stores in urban areas, which are in direct competition with Blockbuster, look most vulnerable. By contrast, the Movie Gallery stores are "in smaller markets without much competition," Sterne Agee analyst Arvind Bhatia told the newspaper. JP Morgan believes Blockbuster could benefit from any store closings.

Unfortunately, it's not only Movie Gallery facing these problems. Industry-wide video store rentals fell 13.1% in Q1 compared to the same quarter in 2006, according to Blockbuster. With new movies being released on DVD this quarter, including 300 and Blades of Glory, the business could see a boost in revenues soon.

But it's Movie Gallery that has to fight with the growing online business from Netflix (NASDAQ: NFLX) and Blockbuster. The company asked its lenders to relax some debt conditions and hired Lazard Freres as a financial advisor. While analysts are skeptical about Movie Gallery finding a buyer, the company's real estate may be attractive to some private-equity groups and could warrant a look.

MOST NOTEWORTHY: Caterpillar Inc (CAT), Movie Gallery (MOVI), Cache, Inc (CACH) and Manor Care, Inc (HCR) were today's noteworthy downgrades:

• UBS downgraded shares of Caterpillar (NYSE: CAT) to Reduce from Neutral and lowered their target to $70 from $78 to reflect decelerating revenues in the company's core businesses, global capacity additions in construction machinery, competitive concerns and valuation.

• Soleil downgraded Movie Gallery (NASDAQ: MOVI) to Sell from Hold following comments after yesterday's close about missing certain debt covenants.

• Suntrust downgraded shares of Cache (NASDAQ: CACH) to Neutral from Buy citing the company's attempt to reconstruct itself in a difficult economic period with tough comps and in a waning trend cycle.

• Manor Care (NYSE: HCR) was cut to Market Perform from Outperform at Wachovia, citing the acquisition by the Carlyle Group. Soleil cut Manor Care to Hold from Buy on the news...

• UBS downgraded BG Group (NYSE: BRG) to Neutral from Buy.

• Roth downgraded MRV Communications (NASDAQ: MRVC) to Hold from Buy.

• Matrix lowered Brown-Forman (NYSE: BF.B) to Hold from Buy.

• JP Morgan cut Liberty International (OTC: LBYIY) to Neutral from Overweight.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

The long-awaited Transformers movie premieres tonight. If you're in your late-20s or early 30s, and watched the Transformers cartoons as a kid, you probably have a desire to see this "PG-13" action extravaganza.

But beware: According to Susan Linn, a psychologist who co-founded the Campaign for a Commercial-Free Childhood, Transformers is being marketed towards children. Brooks Barnes of the New York Times said in an article this morning that the live-action film is packed with cars and planes that turn into "blood-thirsty alien robots." In a PG-13 fight between good and evil, do you expect anything less?

The problem, according to Linn, is that Dreamworks and Hasbro, Inc (NYSE: HAS) are going after preschoolers with their "widespread and irresponsible" marketing of the movie. "Movie studios have been using toys to market movies in unfair ways for a long time," says Linn. "But this is a movie that was designed from the beginning to sell toys and that makes this case particularly egregious."

Evan Almighty, sequel to the 2003 hit Bruce Almighty, is opening this weekend to some bad reviews. The estimated $175 million price-tag, which earned itself the title "the most expensive comedy story ever told," had to raise some eyebrows from the beginning.

Still, Universal executives Marc Shmuger and David Linde think they're going to rake in the dough with the Almighty sequel. "This movie is a great bet," Universal Chairman Marc Shmuger told the LA Times last year. "It's a spectacle fantasy and also a comedy. And a sequel to one of the most successful hits in the studio's history."

If Tom Shadyac's Evan Almighty turns into a hit, as Shumger and Universal hopes, the movie could put big-budget comedies on the front burner. If it flops, don't expect to see another big comedy for a while. Remember how Kevin Costner's Waterworld flopped in 1995? Costner's budget was also estimated at $175 million (back then), however, the U.S. box office only raked in $88 million. We didn't see too many high budget sci-fi flicks for a while after that one.

Who does this hurt? Well, it hurts General Electric (NYSE: GE) for one, parent company of Universal Pictures. Outside of the possibility of it hurting Steve Carell's career, it hurts you, the viewer. If Evan flops, don't expect to laugh while munching on your popcorn at the movies anytime soon.

Somewhere in Hollywood, a group of executives gather, brainstorming the next sequel, remake or adaptation. Wait, I mean they are brainstorming the next brilliant original cinematic idea. Well maybe, but one particular group of execs, from Time Warner Inc's (NYSE: TWX) Warner Bros., recently came up with the idea of picking up the rights to Terry Brooks' Shannara fantasy book series.

Let me give you a little background on the author and the series: Brooks had read Lord of the Rings in college and decided to write The Sword of Shannara while in law school (according to this biography). I'll be kind and say that from reading The Sword of Shannara, you can tell he is definitely a fan of the Lord of the Rings. A really big fan.

This heavy influence on Brooks likely gave Warner Bros. visions of Peter Jackson's Lord of the Rings box office totals dancing in their heads. But what I see is a lot closer to Eragon's box office take, should this movie ever get made.

See, this series, like Eragon, isn't Lord of the Rings -- it's not even close. To give you an idea of the flaws in the Shannara books, Warner Bros. has decided to start the series with the second book, The Elfstones of Shannara, instead of the first. No explanation was given, but as someone that has read them, I'll tell you why -- the first book is so close to a retelling of the Lord of the Rings that it wouldn't get by as its own movie. It only was made into a book in 1977 because hordes of rabid Lord of the Rings fans were looking for their next fantasy fix.

Anyway, enough of my ranting, I think you can see how I feel about this being made into a movie. What do you think? Have you ever heard of these books? Do you think the adaptation(s) will be successful for Warner Bros?

Shrek 3 and Spider-Man 3 are coming to a movie theater near you, just as the sector is coming out of an ugly downturn.

Overcapacity and over-leverage had led to an ogre-ish performance causing theater operators to file for bankruptcy or get picked up by private equity.

Now theater companies are going public or emerging from bankruptcy with little fanfare. However, according to Buzz Zaino, long-time great stock picker at Royce Opportunity Fund, it is time to start looking at these stocks again. In Barron's fund-manager interview (subscription required), Zaino said box-office receipts are up 7.2% year-to-date with a summer of good new releases expected to keep the momentum going.

Carmike Cinemas Inc (NASDAQ: CKEC) looks particularly attractive since it has upgraded 75% of its screens to digital, on which, in addition to showing movies, new alternative concepts are expected to generate additional revenue. Other movie chains Zaino likes are Regal Entertainment Group (NYSE: RGC) and Cinemark Holdings Inc (NYSE: CNK).

Expected improvements in box-office receipts should lead to nice incremental EBITDA margins especially for Carmike since its theater upgrade is mostly completed.

Few have mentioned theater stocks as a place to invest in. Zaino is one of the best at find long-forgotten industries as fundamentals are on the upswing. This ogre of an industry appears ready to return some princely profits to shareholder.

Last year I previewed the big-budget summer movies, giving you a look at ten interesting films that were on the docket for the summer of 2006. This year I'm back with an even longer list (bloated like these films' budgets) of 15 movies you may want to escape to -- or possibly run screaming from.

Of these fifteen movies, Spiderman 3 and ten others are sequels, which in itself indicates something about the state of the industry (And I didn't even include Rush Hour 3 in this list, because, honestly, who wants to see that?). Two of the remaining four movies, Transformers and The Simpsons, are based on animated television shows, leaving only two original ideas in the whole lot -- Knocked Up and Ratatouille. Please, don't shoot the messenger.

Anyway, here is the list, chronologically, of the movies that Hollywood's brain-trust believes you will shell out your cash to see in the air-conditioned darkness of your local movie-house, along with my opinion of how they'll fare. The first on the list, Spider-Man 3, is already out in Asia, but will not be released here until May. All release dates below are for the U.S.

5/04 - Spider-Man 3, Sony Corp's (NYSE: SNE) Sony Pictures
Being the first blockbuster of the summer almost guarantees a successful open, and the popularity of the franchise seals that guarantee. One problem, however, is that "success" measured by any normal means won't be enough, as this movie had an estimated budget of $258M.

5/11 - 28 Weeks Later, News Corp's (NYSE: NWS) 20th Century Fox
The highlight of the horror/zombie genre for the summer, this follows the surprise success of Danny Boyle's 28 Days Later, which reinvented the zombie film with faster zombies and smarter characters.

5/18 - Shrek the Third, Viacom's (NYSE: VIA) Paramount Pictures
One of the only cartoon franchises that has held its own against Pixar (Ice Age being the other), the draw of this fairytale romp is that while kids love the story, there are enough winks at the adult audience to make parents happy to take them.

5/25 - Pirates of the Caribbean: At World's End, Walt Disney (NYSE: DIS)
Money in the bank for Disney, and since it was shot simultaneous with the second Pirates installment, it wasn't even as expensive to make as this summer's other budget hog, Spider-Man 3.

So, your New Year's resolution is to get acquainted with the beautiful new girl in the cubicle next to you. In two weeks all you have found out about her is that she is a huge movie buff.

Rather than work up the nerve to ask her out for coffee, you decide this is a good time to polish up on your cinematic knowledge. After all, the last movie you saw in the theaters was Terminator 3: Judgment Day.

But now the real question: What is the best method for getting up to speed?

There are three movie renting options available to just about everyone, along with a few fledgling services that may or may not hit it big (i.e. digital downloading).

The following are the key differentiating points that I think anyone researching a new movie plan should consider:

Blockbuster (NYSE: BBI):

The industry giant, Blockbuster was established long before DVDs came about and it has a large library of mainstream titles and many locations worldwide.

• The newest big releases are given special "Guaranteed in Stock" attention, meaning there will be plenty of copies of the latest and greatest. Conversely, this means the sacrifice of shelf space for classic films so there is enough room for 100 copies of The Devil Wears Prada.
• With 8,500 brick-and-mortar locations, you can get an account at home and be fairly certain you will be able to find a Blockbuster when you have to take that out-of-town trip to the in-laws.
• The company paid homage to Netflix by mimicking its online rental delivery service. The service, Blockbuster Total Access, which I reviewed on Dec. 29, is very similar, with the addition of being able to rent movies for free in-store with a Total Access account.
• Unfortunately, the stores have a "big-box" feel to them. The corporate initiatives are plainly written across the young, pimple-faced employees -- such as when they run through a script of things they must suggest when you are checking out; "Are you sure you don't want to buy candy and popcorn with your movie? Or a previously viewed movie for only $12.99?"

Lions Gate Entertainment Corp (NYSE: LGF), which has been a bright light in the otherwise dim movie industry recently, has found success making low budget movies aimed at the 20-30 year-old audience. Here is a list of some of their more notable recent releases, sorted by their estimated budgets. None of the movies has a rating milder than PG-13.

• Hostel ($4.5M est. budget / $47.3M gross)
• Diary of a Mad Black Woman ($5.5M est. budget / $50.3M gross)
• Crash ($6.5M est. budget / $54.5M gross, won Best Picture Oscar)
• Crank ($12M est. budget / $27.8M gross)
• Employee of the Month ($12M est. budget / $28.4M gross)
• Saw III ($12M est. budget / $80.1M gross)
• Hotel Rwanda ($17.5M est. budget / $23.4M gross, nominated for 3 Oscars)
• Lord of War ($42M est. budget / $24.1M gross)

(All above figures taken from IMDB.com)

From the above list, you can see Lions Gate's winning formula. All their successes have budgets under $20 million dollars, and most fit into three categories: Movies that push the limits of violence and gore (Hostel, Crank, Saw); low-brow adult-themed comedies (Diary of a Mad Black Woman, Employee of the Month); and edgy dramatic works that gain critical appreciation (Crash, Hotel Rwanda).

Now, here is the problem -- neither the movie the just released, Happily N'Ever After, nor the movie that is making noise today with its addition of Paula Abdul to its cast, Bratz, fits this formula.

After blogging about the launch of Blockbuster Inc.'s (NYSE: BBI) Total Access program in November, I was contacted and asked if I would like to try the program in exchange for writing a review about it. I was given a free one-year subscription of the service in exchange for promising to review the service honestly. Now that I have given full disclosure, here are a number of my thoughts on the Blockbuster Total Access program:

• The program is an obvious improvement. The online service operates exactly the same way as it previously did, but now a rental can be returned directly to the store for a new movie. I found this came in convenient more than once - when I was in the mood to watch a specific movie that was not in my queue or when I had not realized a movie I wanted to see had just come out on DVD. Since the service costs the same as Netflix, Inc (NASDAQ: NFLX), the added functionality is essentially a free upgrade.
• I found the online movie store well stocked and the movies arrived quickly. My queue, which has around 30 movies in it, says that all of them are available immediately, and I have never had to wait more than two days to receive the next movie in my queue.
• The only drawback I noticed was from the information I was given when starting the program - the movie database at Blockbuster is slightly smaller than at Netflix (60,000+ to 65,000+). That being said, I did not have any trouble finding any movies, even older movies (Dirty Harry), foreign movies (Ran), animated movies (Appleseed) or indie movies (Paradise Now).

This weekend is rife with interesting speculation -- newsmongers with more time on their hands now that kids are back in school? -- and one of the most well-researched and interesting: the rumor that Wal-Mart Stores, Inc. (NYSE:WMT) is set to offer music via an online store. I think we can all agree no one's "killing" Netflix, or the newly-announced iTunes movie store. It's interesting nonetheless that the conservative retail giant would invest in digital media; a move that seems as far as humanly possible from its traditional consumer base: the blue-collar, the conservative, the not-digital.

One could certainly argue that Wal-Mart could bring to digital media what it brings to everything it offers. Low prices. Efficient distribution (although how you can get more efficient in distributing digital media, I don't know). The wider audience of its millions of customers. And maybe the retail giant's considerable clout in the entertainment industry is being threatened by Apple and Microsoft, and that's what this is really about.

I love, however, the way this news was ferreted out: someone saw a job listing for a business manager of a new digital video category. The manager will need to "innovate cross-channel strategies and product offerings," and maybe that's the answer: this super-manager will be asked to develop a great way to get Wal-Mart shoppers to buy movies (and music) in the stores, perhaps when they're buying their MP3 players. And their toiletries.