Shares for Comcast Corporation (NASDAQ/CMCSA) edged higher today after the blockbuster release of Jurassic World. The film had the best opening weekend of all time, grossing $500 million worldwide, with $204.6 million coming solely from the United States.
The commercial success of the movie is a timely boon to NBC/Universal. Plagued by lower ratings and a series of underperforming movies, the cable/TV operator has been executing a turnaround since 2013. After the catastrophic failure of R.I.P.D. and 47 Ronin, Universal replaced its studio chief and started to rebuild its older, more successful franchises. By delving into its catalog of existing assets, the company is deliberately shadowing the strategy used so successfully by The Walt Disney Company (NYSE/DIS).
Consistency Works Best
The strategy is simple: instead of leaving a successful movie as a standalone asset, lengthen its shelf life by creating sequels, prequels, and spinoffs. Then extend the brand into theme park rides and merchandise.
By acquiring Marvel Studios in 2009, Disney paved the way for a spate of superhero action flicks that guarantee huge returns from ticket sales and cross-branding. Instead of producing a diversified array of films, the studio focused investment on a small group of well-known, well-loved franchises. The triumph of Iron Man, Captain America, and The Avengers revolutionized Hollywood’s understanding of where to put its resources.
Find What Works and Replicate It
By adopting this strategy, Comcast is pooling its risk and reward into fewer baskets, but it is paying off. This year alone, NBC/Universal has two of the highest-grossing films: Fast and the Furious 7 and Jurassic World. Following closely behind is Pitch Perfect 2, which already has $170 million in domestic sales.
They also signed a licensing deal with Hasbro to create a new line of toys based on Jurassic World. Revenue will undoubtedly increase at the associated rides in California, Orlando, and Japan. While critics complain that franchise-centered filmmaking is creating a vacuum for original screenplays, it is clearly making a lot of money for its corporate masters.