Every year there are a few weekends that studios avoid at all costs and last weekend is typically one of them. The post-Thanksgiving box office is traditionally a mess with left-overs dominating the frame. It is actually very rare for a studio to release a movie during this period, but Universal (NASDAQ:CMCSA) (CMCSK) did with Krampus…and it paid off.
Here's the thing about Krampus; Universal had nothing to lose.
The film was made for $15 million and that looks close to how much it will make back this weekend. Krampus is a dark holiday tale about an evil spirit that comes back to punish the season's non-believers. It stars an eclectic cast that includes Adam Scott, Toni Collette, Allison Tollman and David Koechner, which should tell you everything you need to know.
Meanwhile among the holdovers, Lions Gate's (LGF) The Hunger Games: Mockingjay - Part 2 is expected to win its third weekend with about $18.5 million, while Disney's (NYSE:DIS) The Good Dinosaur found itself in a battle for second with Krampus. What's interesting is that Warner Bros.'s (NYSE:TWX) Creed continues to show strong legs and also gave Pixar's second effort of the year a run for its money. Currently it's looking like it will be a very close battle for second, with Krampus in the lead.
Universal's success here continues the studio's dominant march through 2015. Yes, the studio has had some misses, but nothing compared at the level of its rivals. Its successes also more than outweigh its flops. Yet what as an investor you should be aware of is the scope of its projects.
Again, Krampus cost just $15 million to make which is a far cry from the $190 million that Universal spent on Furious 7. The point though is that whether it was a micro budgeted or big budgeted project Universal was able to turn it into a success. The studio has proven it can handle both extremes, which is another thing its rivals have had a hard time succeeding with on a regular basis.
Its closest rival this year has been Disney, which is having that same level of high success. However many have noted that while its holiday offering The Good Dinosaur is doing well, it is not doing spectacularly. The film was expected to grab the number two slot but Krampus and Creed are showing a lot more life than expected, meaning Good Dinosaur could slip to fourth.
The bottom line though is with Cinderella, Inside Out, Ant-Man, Avengers/Ultron and the upcoming Star Wars: The Force Awakens having already put up boffo numbers, Good Dinosaur would have had to have been a complete bomb to worry investors (and that wasn't the case). If anything, the year's second Pixar flick was just padding on an amazing slate and a charming holiday entry.
Yet it is still worth noting that it slipping this weekend shows it is possible you can get too much of a good thing. Incidentally, that had been the common belief with the Rocky franchise as many believed the Sylvester Stallone films were down for the count. Yet Stallone and rising star Michael B. Jordan proved otherwise as Creed has re-invigorated the brand. For Warner Bros. (through MGM and New Line), Creed's success is a big win for them.
The studio's 2015 has been very uneven and having any sort of positive momentum shift going into a massively important 2016 is welcomed. Creed is also having a lot of luck with the early award races which could translate into something larger come the Oscars.
Next week, Hollywood gets back into the new release spirit as Warner Bros. tries to keep up its late year success with In The Heart of the Sea and Paramount targets Wall Street with The Big Short.
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Business relationship disclosure: All opinions expressed are the authors and no compensation outside of Seeking Alpha is being received. While the author has a business relationship with a subsidiary of Disney, it is not related to any divisions discussed and the author is not a full-time employee.