INDUSTRY
Industry Stock Review of 2021 Year to Date
Industry Stock Review of 2021 Year to Date
Countless Hollywood stocks lost their momentum in 2020, but are now thriving in 2021’s first three quarters. Due to a boost in advertising revenue and the reopening of the economy after the worst of the Covid-19 pandemic, there have been solid changes, especially for cinemas.
Closing prices just wrapped up, as trading was disclosed at the beginning of October, making it the first day of the final quarter of the year.
For example, the Walt Disney stock, which also happens to be one of the biggest outperformers for 2020, was down just 1 percent year-to-date. It finished at $176.01 at the beginning of October after its big close of 2020, which was at $181.18 and trading well-above the $200 benchmark back in March. The reason behind the recent drop is due to the fact that investors were worried about comments surrounding the drop in streaming growth.
Additionally, questions surrounding streaming have become more apparent for Discovery investors, especially after its most recent deal that was announced in May to merge with AT&T WarnerMedia.
In a report released by Wells Fargo analyst, Steven Cahal, he explains, “Discovery shares have languished since announcing the deal, and we think visibility into the streaming strategy is a key overhang.” And as of the recent close of the market, Discovery’s stock decreased by 16 percent, leaving it at $25.74, while AT&T’s was down at 7.7 percent, resulting in $27.17 close. 
However, other stocks in the entertainment industry are beginning the final period of the year with a positive outlook. Take AMC Network- the stock has held strong above the $30 range since June 1. Now, in October, bullish options activity continued to increase, indicating institutions may believe the stock is about to fly higher. Additionally, Lionsgate, which has been viewed as a potential party in a new deal, has increased 28.5 percent so far, resulting in $14.77.
However, it doesn’t just stop there. In fact, Fox Corp. has also seen a major increase in 2021, especially due to the fact of the increase of sports betting as it continues to flourish. Fox Corp’s shares boosted a whopping 41.5 percent for the year, resulting in a market close at $40.78.
But despite the many substantial runs for the entertainment industry, no one else has seen a rise quite like AMC Theatres. Currently, AMC Theatre’s stock has increased a whopping 1,813 percent ahead of its 2020 closing price, which was initially at $2.12 and now at $38.46 as of the beginning of the 3rd quarter. The fact that it has increased as much as it has is partially due to it becoming a meme stock, which means that it has gone viral and has attracted serious attention from investors, much like what happened to the gaming retailer, GameStop. In addition, many other movie theatres have seen an increase in stocks compared to how hard they were hit during the Covid-19 pandemic. They have grown exponentially year-to-date, despite the Delta variant of the Coronavirus.
And while things are starting to pick back up for theatres, Netflix, the global streaming conglomerate shouldn’t be too worried given that they are still maintaining consistent growth with a recent all-time stock high of 668.24 towards the end of October. Long term strategy, is the reason for the higher returns, currently focusing on global growth of their subscriber base, as well as allocating funds for international content development
Additionally, the entertainment and technology conglomerate, Sony Corp. is surely excited about their boost in stock growth, given the fact that they experienced a 16 percent increase so far in 2021. And according to analyst Doug Creutz from Cowen, he is expecting the media conglomerate to receive a lot of strong support, which is always a good sign in the next coming months.
The media conglomerate, Comcast, has increased 13.3 percent for the year, ending at $57.21 at the beginning of the month; however, has also experienced recent pullback from many pay-TV distributors.
With that being said, the contrast in stock changes for every media conglomerate and theatre is starkly different. Therefore, it is difficult to make plausible predictions, given the changes in the economy. However, despite the everchanging news of Coronavirus and its variants, things are certainly looking a whole lot better.
About Vedette Finance
Tarek Anthony Jabre, CEO and Founder, launched Vedette Finance, a Los Angeles-based film development and finance company, in 2012. Tarek Anthony Jabre‘s goal is to maintain a consistent delivery of high-end product, quality, and financial returns in the entertainment industry. Vedette Finance aims to creatively develop its premium value slate and provide structure to financing in order to produce a diverse range of film projects. To learn more about Vedette Finance, visit www.VedetteFinance.com.
Disney and Marvel Studios- The Numbers
Disney and Marvel Studios- The Numbers
Shang-Chi and the Legend of the Ten Rings made its debut on Labor Day weekend. It’s the first Marvel movie to open on the holiday weekend, and the Chinese government has yet to approve the movie for distribution. However, Disney had enough wiggle room with its power over the comic book publisher that both Stan Lee and Jack Kirby established 80 years ago. Disney purchased Marvel in 2009 for $4 billion, and now it is estimated to be worth almost $53 billion, which is about 16% of Disney’s market value. With that being said, the return on investment is certainly remarkable, given that many thought the purchase would never pay off.
“People didn’t fully understand and appreciate the franchise potential of the genre like we did,” said Disney’s former chief financial officer, Tom Staggs, who assisted in leading the acquisition. “We were able to buy it because the industry didn’t totally get it either.”
Maintaining that same value may be a big challenge for Chapek, as he took on the role as Disney’s CEO last year. This is especially true as he has taken on the already contentious decision of Scarlet Johansson, one of Marvel’s biggest movie stars, given that her big pay out is linked to the concurrent streaming and theatrical release of Black Widow, as well as the controversial choice of disclosing her $20 million salary for her role in the film. Beyond the decision already being controversial for Hollywood, it also concerned Marvel’s Chief Creative Officer, Kevin Feige, who hoped that the movie would not be downgraded to at-home streaming.
But even before such difficulties that Shang-Chi was facing prior to its debut, it presented many other unique challenges for filmmakers–breaking down controversial Asian stereotypes that may be the reason why the Chinese government has yet to set out a release date. Disney was depending on the performance of Shang-Chi, which would influence how they would distribute the newest Marvel movie, Eternals, set out to be released Nov. 5. This will impact whether the company will stick to its meticulously scheduled distributions of Marvel movies that are intended for theatrical release initially, then extended to TV.
The 24 Marvel titles cumulatively grossed $21.9 billion for Disney, making it bigger than ever–even larger than Bond, Harry Potter, and The Fast and the Furious.
Additionally, the Marvel titles are even bigger than Star Wars, which was bought by Disney for $4 billion from Lucasfilm back in 2012, and delivered box office sales of $6 billion from the films that were released. Disney’s acquisition of Pixar in 2006 for $7.4 billion also pales in comparison, given that ticket sales were $14.4 billion for 21 films. It is no secret that Marvel is certainly the most successful film franchise.
Take a look at the numbers that Marvel has brought in:
Films: Almost $6 billion
Top Marvel Film: Avengers: Endgame at $2.8 billion
To no surprise, Marvel’s superheroes have helped Disney dominate the box office in recent times, resulting in the studio to have the two largest movies in 2018, Black Panther and Avengers: Infinity War. Beyond those two huge breakthroughs, the next year had one of the highest-grossing films of all time, Avengers: Endgame. Since 2018 and on, Disney has distributed seven Marvel films that have brought in over $9.4 billion. Because of this, it has increased the value of all other films, resulting in a price increase for cable networks and streaming services to show them.
Streaming: Over $40 billion
Most Popular Marvel Show: Loki
Marvel shows boosted around 12.4 million in subscribers for Disney+ streaming services in just a few months (April-June), and brought a total of 116 million viewers as of July. From WandaVision, to The Falcon and the Winter Soldier, to Loki, these shows have made it possible for unbelievable profits to be brought in. And because of the dominance it has shown for streaming, 10 more Marvel shows will debut on Disney+ streaming service.
Consumer Goods: Approximately $3 billion
Top Selling Marvel Product: LEGO Iron Man Hall of Armor
All Marvel sales (under Disney) account for almost $10 billion in revenue for licensing from sales since 2010. Initially, toys were viewed as the main driver in profit and films helped with the marketing. And now, both are raking in a massive amount of revenue. Although Disney does not specify the percentage that is attributable to Marvel, the second profit driver is said to be from Disney’s classic characters, including Mickey Mouse, Minnie Mouse, Donald Duck, and Goofy.
Theme Parks: Undetermined
First Marvel Attraction: The Iron Man Experience at Hong Kong Disneyland
Although Marvel has been in Disney’s hands for over a decade, it is still too soon to determine the operations’ value regarding theme park attractions. For example, a six-acre Avengers Campus that was introduced in June at Disneyland is already drawing in streams of fans ready to see the different characters, including Captain Marvel, Thor, Iron Man, Black Panther, and more. In addition, theme park goers can experience the Spider-Man Web Slingers ride, among many other thrilling attractions.
It goes without saying that the union between the two conglomerates, Disney and Marvel, has truly revolutionized the industry, from film, to streaming, to consumer products, to theme parks, and beyond–and will continue to do so bringing in massive revenue.
About Vedette Finance
Tarek Anthony Jabre launched Vedette Finance, a Los Angeles-based film development and finance company, in 2012. As the CEO and Founder of Vedette Finance, Tarek Anthony Jabre’s goal is to maintain a consistent delivery of high end product, quality, and financial return in the entertainment industry. Vedette Finance’s aim is to creatively develop its premium value slate and provide structure to financing in order to produce a diverse range of film projects. To learn more about Vedette Finance, visit www.VedetteFinance.com.
Studios Still Need Theatres
Studios Still Need Theatres
Throughout the pandemic, the future of movie theatres was questionable. On top of that, streaming services had also been introduced in a new way, releasing movies the same day as theatres, which made it difficult for theatrical exclusivity to stand a chance. The already struggling theaters seemed to be facing an existential crisis, making it difficult for them given the fact that the world may no longer need them due to streaming services.
However, now that theatres have begun to reopen, feature films are finally having the chance to debut after long delays, and things are looking better for theatres, as well as the film industry as a whole. Over the past few months, studios have made deals with exhibitors, including AMC, Cinemark, Cineworld, among others, for exclusive theatrical window releases. This is a testament to the fact that even the studios associated with streaming services believe that the need for theatres is definitely still there in order for major releases to reach a certain level of success. 
On an earnings call this month, AMC’s CEO Adam Aron announced that the company had reached a deal with Warner Bros., which would entail the release of films to be exclusive to theatres for 45 days in 2022. This is a huge shift, considering WarnerMedia’s hybrid release model, which meant that all Warner Bros. films in 2021 were premiering in theatres, as well as HBO Max on the same day.
“In this same vein, I’m also pleased to announce today that AMC just reached formal agreement with our friends at Warner Bros. to show all of their movies in calendar year ’22, importantly respecting an exclusive theatrical window of 45 days prior to home release for all Warner Bros films,” said Aron, AMC’s CEO. “It’s no secret that AMC was not at all happy when Warner decided in December to take movies to the home on HBO Max simultaneously with theatrical release.”
Many cinema owners were not happy with what transpired in 2021, given that studios were taking away from exclusively debuting films in theatres. The fact that films were simultaneously being released in-theatres and on streaming platforms made it extremely difficult for theatre owners. But now that studios are starting to come around and establish exclusive theatrical windows with theatres, it gives cinema owners, actors, filmmakers and the film industry as a whole more hope for 2022.
“Therefore, it’s especially gratifying that Warner is yet again embracing an exclusive theatrical window,” Aron said on the call. “And for us at AMC, it’s especially pleasing to be working so harmoniously with Warner Bros. once again. We actually are in dialogue, active dialogue with every major studio on this very important topic.”
The deal has certainly helped with patching things up for studios and theatre owners, given that because of the studios’ decisions to release movies via streaming services caused a very public falling out between the entertainment companies. The issue became so serious that at one point, AMC said that they would ban all Universal films from its theatres. But later, AMC and Universal were able to establish a deal that improved their relationship exponentially. According to Aron, the theatre chain has been in discussion with a number of other studios regarding exclusive theatrical windows.
“We believe we’re on a road to recovery, and we’re ever so grateful to our friends and allies who share our passion that AMC’s best days should be those that are coming,” Aron said. “You can take comfort that our deeper financial reserves allow us to stay the course, to innovate again, and to capitalize on the opportunities that we see around us. We fundamentally believe that ours is a future that is bright because there is nothing as magical as seeing dazzling images on a huge silver screen.”
It is an exciting thing to look forward to for theatre chains, studios, filmmakers, actors, and movie lovers. Everyone involved in the film industry certainly took a hit when movies were released the same day in theatres as they were released on streaming platforms. Actors, too, were very displeased given the fact that many actors involved have their pay tied to how well the box office numbers are.
Therefore, many studios are relying on theatres heavily in order to get back to some kind of normalcy. For the many people who enjoy watching movies in theatres, this is a huge announcement. Given the fact that studios and theatre owners are working hard to keep theatres alive is very meaningful, giving confidence to the film industry and theatres again.
Additionally, AMC has announced that it’ll be opening around a dozen new theatres around the world. This is huge, especially given that the company also announced that it will be acquiring some theatres from Arclight and Pacific Chain, which had previously announced that it wouldn’t be reopening its doors due to the pandemic.
With efforts to enhance the viewing experience, studios and theatres are hopeful that the exclusive theatrical windows will help move things in the right direction. With that being said, studios have shown that they need theatres just as much as the theatres need their films.
“We are hearing considerable support in Hollywood that an exclusive theatrical window is an important way to build big and successful movie franchises,” Aron said. “Clearly, though, this whole subject is quite topical. It’s very much a work in progress.”
In conclusion, 2022 is going to be a huge year for the film industry regardless of how things pan out with the exclusive theatrical windows in place. Some of the biggest films are set to debut in 2022, including The Batman, Black Panther: Wakanda Forever, Spiderman: Into the Spider-Verse 2, Thor: Love and Thunder, Jurassic World: Dominion, Avatar 2, and much more, making it a very exciting year for the film industry and movie lovers to look forward to.
About Vedette Finance
Founded in 2012, Tarek Anthony Jabre launched Vedette Finance, a Los Angeles-based film development and finance company. As a company dedicated to handling film projects at all different stages of production, Tarek Anthony Jabre’s aim is to maintain a consistent delivery of high end product, quality, and financial return in the entertainment industry. Vedette Finance’s objective is to creatively develop its premium value slate and provide structure to financing in order to produce a diverse range of film projects. To learn more about Tarek Anthony Jabre visit www.VedetteFinance.com.