Seeking Alpha
Profile| Send Message|
( followers)

Hollywood is on fire these days at the box office, having just set records for cinema receipt revenue in 2009 of more than $10.5Billion. The trend seemed ready to continue into 2010, and at the center of box office success now stands a single filmmaker: James Cameron.

The latest film from the man behind Terminator, Aliens and Titanic is called Avatar, and it seems like quite a few people have seen it already. $1.0Billion in ticket sales worldwide in only 17 days makes Cameron the only Director with 2 films crossing the lucrative billion dollar mark. His last directorial feature Titanic just happens to be the biggest movie of all time with a box office gross of $1.8Billion.

All good news for News Corp (NWS), as its 20th Century Fox movie division has hit a home run here with the marketing and technical logistics of Avatar, a 3D adventure film based on a far away world showcasing next generation computer generated characters. By no means was this film a sure thing, and with reports of ballooning budgets and muted anticipation, the execs at Fox certainly had reason to worry. Cameron's eye for visuals and his general audiences' flair for story-telling went on to rule the day, and 3 weekends into its box office run, Avatar remains at number 1, at a time when blockbusters generally open to huge crowds and dramatically fall off at a clip of nearly 50% each weekend. For Avatar, buoyed by the holiday season, each weekend's drop has been nothing short of remarkable, under 10% in both cases, signaling continued word-of-mouth and repeat business.

News Corp. over the last month, in the lead up to Avatar and its continued success, has seen its stock rise 14%; this compares for a 2% rise in the Dow and a 5% rise in the Nasdaq. But there's another success story to come from the Avatar-verse, and that's the pioneer of the biggest movie experience around, IMAX (IMAX). With the stock gaining 23% over the last month, Avatar is to be the biggest IMAX movie to date besting the performances of Transformers: Revenge Of The Fallen and The Dark Knight.

IMAX is being promoted heavily in the media as the best way to fully experience the world of Avatar, and this comes as no surprise since the screen and sound systems are amongst the biggest and most powerful in the world. In a technological age in which Hollywood tries every gimmick to get the movie-goer to pay up for the experience, it is these event films, these Concorde moments in cinema, the Avatars of film-dom that make the proposition worthwhile. Avatar in this sense is the real deal for Fox and News Corp. and from a business sense, with IMAX 3D commanding between 2-3x the admission price for a regular cinema screen, IMAX is the real deal as well.

Disclosure: Author holds no position in NWS, IMAX

Source: James Cameron Is News Corp's Billion Dollar Man