Summer Movies Projected to Be Recession Proof Again

"Iron Man" from Marvel (MVL) and Paramount opened Friday, kicking off the summer movie season. With the box office expected to top $85 million opening weekend, Hollywood's pretty excited, and for good reason.

The economic downturn is squeezing consumer spending, but there's one corner of the consumer pocketbook that'll emerge unscathed from the "r" word. Moviegoing is pretty much recession proof: box office receipts have grown over six of the last seven recessions (according to Lehman Brothers analyst Eric Handler).

It's fairly simple. When the economy is suffering, people want to escape their troubles, and going to the movies is a fairly affordable luxury. Even with the average movie ticket price at eight dollars, a trip to an air-conditioned theater is a great activity when you're not spending money on road trips. And movies are probably the cheapest out-of-home entertainment, with concerts and sporting events pricier than ever.

But Hollywood faces some tough comparisons. Last summer had the biggest U.S. box office ever, with 15 sequels and huge franchises like "Spiderman," "Pirates of the Caribbean," and "Shrek," bringing out larger audiences than ever before.

It'll be incredibly tough for this summer's box office to live up to those numbers, especially since there are only seven sequels opening this summer. Sure, some of them are likely to be huge, like "Indiana Jones." But the bottom line is, fewer sequels means the box office is much less predictable.

And the movie studios are under pressure to establish new franchises. Disney (DIS) has "Wall-E," DreamWorks (DWA) animation has "Kung Fu Panda," Warner Brothers (TWX) has "Speed Racer." The list goes on and on.

There are plenty of franchise potentials. And the fact that people are going on fewer road trips may actually get more people into theaters, helping out this summer's box office. But at the end of the day, the movies have to be good.

A lot of eyes will be on the box office numbers. You can bet that Marvel is going to turn "Iron Man" into a franchise if it hits that $85 million dollar figure this weekend.

Comments

[Der Vatcher]

"Iron Man" is destined to be the arrowhead in a very sprited summer movie season, and this film's sequels are already set to go. I suggest anyone attending the film stay through the credits and see the little 30-second coda featuring a surprise appearance by another Marvel character (played by an actor anyone would logically place in that role) to discuss with Tony Stark a plan that will definitely require more Marvel heroes. Ka-ching!

[Texrat]

Iron Man was thoroughly enjoyable, one of the best adaptations yet. Proof that Marvel is on the right track. Just hope they can correct their earlier mistake with the Hulk. June will tell...

[rev]

I've owned shares of Marvel for a couple of years and have been keenly watching the previews and geek response to them. I ended up trading in my shares of Oracle for Marvel after seeing what looked like a terrific job they'd done on Marvel. Here it is Monday, and I'm pleased as punch that Iron Man blew the lid off of the idiot analysts who thought that Marvel 'didn't have any more good characters....' He who laughs last... and with a healthy profit... laughs best!