Sipping Frappuccinos With Akeelah And The Bee (LGF, SBUX)

Includes: LGF.A, SBUX
by: Travis Johnson

Movies about spelling bees are not necessarily the stuff investing dreams are made of -- one has only to look at the Richard Gere film Bee Season (2005) from last fall to have that clarified (and if you do look at it, you'll be in sparse company ... it only grossed about a million dollars in the U.S. following a blockbuster opening weekend of $120,000 in 21 theaters).

But Akeelah and the Bee, the next Lions Gate Entertainment (LGF) film, should be a very different story.

The star power is probably a wash with Bee Season -- Laurence Fishburne and Angela Bassett are more or less in the same starpower neighborhood as Richard Gere and Juliette Binoche, by my reckoning.

But the marketing machine of Akeelah and the Bee will overwhelm the nonexistent push behind Bee Season, thanks to one word:

Starbucks (NASDAQ:SBUX).

Starbucks has chosen Akeelah and the Bee as the first film in their new push into filmed entertainment, what they're calling "helping our customers discover great movies".

They started expanding into the visual media a few months ago by selling a Laurie Berkner (preschool entertainer) DVD in their stores, which was a big success, and they're now going to be very heavily involved in marketing the theatrical release, DVD, and soundtrack of Akeelah with Lionsgate ... in exchange for a cut of the proceeds, of course.

I think this has the potential to drive a true sleeper hit, if you can consider a film that's being advertised in about 8,300 Starbucks locations around the country a "sleeper." And they're not just putting up movie posters -- no, they're having spelling quizzes in the stores, giving out vocabulary-building cup sleeves, and giving baristas free screenings so they can talk up the film if they like it.

This is an ideal marketing push for a film like this, in my opinion -- a feel good story about an 11 year old from the inner city who goes to the national spelling bee. Not something you can market with special effects or starpower, but by all accounts a powerful story that can build viral buzz if seeded in all the right places ... and every Starbucks in the US will be a seedbed. Oh, and by the way, 2929 Entertainment, a Mark Cuban company, is the co-promoter of this one -- and that's certainly another guy who knows how to come up with new ideas for making money.

This is one reason why I'm adding a bit to my Lionsgate position today. This film won't make or break their year, thanks to a very diversified product offering, but it does exemplify the kind of new thinking, low cost filmmaking and marketing, and creative use of excellent stories that I think make Lionsgate a special company.

For the record, I bought more LGF today at $10.01 -- my Lionsgate investment is still a bit under water, but this purchase brings my average cost per share down to about $10.35.

Previous postings about Lionsgate from the last few months:

  • After Crash, Lions Gate Roars Ahead
  • Lions Gate Entertainment Benefits From Oscar Buzz
  • Annual Checkup -- LGF
  • (and by the way, lest you think I know anything about making predictions in the movie business, I also thought that Wallace and Gromit might be a hit ... oops!)