Business

The Oscar box office bump is shrinking

Published

3 weeks ago

March 11, 2023

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107181382-1674161782620-a_Screen-Shot-2023-01-19-at-35506-PM.jpg

Michelle Yeoh in “Everything Everywhere All at Once.”

Source: imdb

The winner of the best picture award at Sunday’s Oscars may not get a box office bump for taking home the night’s biggest prize.

It’s part of Hollywood’s evolution. The Covid pandemic and the rise of streaming have fundamentally altered the industry. The result has been a smaller bump in box office at the time of nominations and a significant surge in streaming demand.

From the nominations in late January through Wednesday, this year’s 10 best picture nominees added $82 million in domestic box office sales, $71 million of which came from “Avatar: The Way of Water.” (“The Way of Water” has grossed more than $670 million total in North America.)

For comparison, in 2020, the nominees generated nearly $750 million at the domestic box office after being nominated in mid-January, Comscore data shows. The Oscars were awarded Feb. 9 that year, weeks before Covid was declared a pandemic and shutdowns began.

“Many of this year’s contenders sprang from earlier on the release calendar and thus were ‘played out’ in terms of their ability to generate Oscar bonus dollars in cinemas,” said Paul Dergarabedian, senior media analyst at Comscore.

In the past, films like “1917,” “Hidden Figures” and “Silver Linings Playbook” – which were merely nominated for the award – generated 50% or more of their domestic box office revenue after scoring a nod, according to data from Comscore. For 2014’s “American Sniper,” 99% of its box office ticket sales came after its nomination, a whopping $346 million.

This year, all of the best picture nominees saw less than 13% of revenue from post-nomination box office except for one. “Women Talking,” one of the smaller films up for the top award, generated 77% of its revenue after the nominations, or around $3.9 million, according to Comscore data.

“The Oscars bump is not a new phenomenon,” said Brandon Katz, an industry strategist at Parrot Analytics. “For decades, we’ve seen contenders pick up extra box office ticket sales once the picture nominations were announced. But what has changed more recently, particularly as the Oscars have taken place a month later than usual in recent years and they’ve been impacted by Covid, is a streaming bump.”

Parrot Analytics determined that the 10 best picture nominees saw an average audience demand increase of 21% in the week after receiving the coveted nomination. This demand metric is calculated by looking at consumption, including piracy, social media posts and interactions, social video views and online research on sites like IMDb and Wikipedia.

Much of that demand likely manifested in streaming. Only six of the 10 best picture nominees posted comparable box office data in the week after the nominations were posted.

“The Banshees of Inisherin” saw the biggest percentage bump between the week before nominations and the weeks after, with ticket sales jumping 381%. However, that represents a jump from $73,000 in box office receipts to $352,000.

During that weekend, fellow nominees “Everything Everywhere All at Once,” “The Fabelmans,” “Tar,” “Triangle of Sadness” and “Women Talking,” each generated under $1 million in ticket sales despite receiving significant bumps in audience traffic.

Only “Avatar: The Way of Water,” which saw ticket sales decline 21% during the weekend after the nominations, generated more than $1 million – tallying $15.9 million in domestic receipts.

The staggering difference has a lot to do with when these films were released, their availability on streaming platforms and the genres of the films.

The blockbuster “The Way of Water” was in its sixth week in theaters and carried momentum at the box office, while “Everything Everywhere All at Once” only just returned to the big screen after a nearly sixth-month hiatus from cinemas.

Notably, by the time nominations were revealed “Everything Everywhere All at Once” had already been in the public zeitgeist for almost a full year. The film was released in late March 2022.

Movies are now everywhere all at once

Traditionally, Oscar bait films are released in the last quarter of the year, with the majority hitting cinemas in November and December. For this year’s nominees, only three debuted during the last two months of last year.

In the past, the Academy Awards ceremony has been hosted in February, so even those films released in October may have still been playing exclusively in theaters had the pandemic not pushed the event into March.

However, this year, at the time of nominations in late January, eight of the 10 films nominated for best picture were available on streaming. But that’s not necessarily a bad thing, said Katz.

“In the last couple of years everyone has said: movie theaters versus streaming. I never viewed it like that,” Katz said. “I don’t necessarily think the data supports that. I actually think those two mediums can be additive and complimentary and not oppositional.”

Katz noted that some films get a box office increase from the nomination, but the availability of titles on streaming can build buzz and momentum during the later portion of the voting period.

“Obviously, it’s hard to argue with the dollar sign and box office figures,” said Wade Payson-Denney, an analyst at Parrot Analytics. “But that’s just one part of the equation nowadays. Streaming plays such a big role.”

“All Quiet on the Western Front” generated the biggest bump in demand, up 59% in the week after its best picture nomination. The film ran for a limited time in theaters, just long enough to drum up Oscar contention, before transitioning to its home on Netflix. The fact that the film was only available on streaming is likely why it saw the biggest jump in demand.

This also explains why there is no box office data for the film.

On the opposite end of the spectrum, “Avatar: The Way of Water” and “Top Gun: Maverick,” the biggest box office smashes of 2022, saw demand drop.

For “Maverick,” the fall in demand is likely because the film has been out in public since May and been available to stream since late December. “The Way of Water” is still in theaters and won’t be available to stream until the end of this month. Those that wanted to see these films have had ample time to do so or had so recently seen them, they didn’t feel the need to watch them again or pirate them.

“Sunday’s telecast will serve as a three-hour plus infomercial showcasing the films and performances that are the most notable of the year,” Dergarabedian said. “This should translate to an increased desire for viewers to seek out these films at home.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal distributed “1917” and “The Fablemans.”

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Business

Lululemon shares jump as holiday-quarter sales surge

Published

57 mins ago

March 29, 2023

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A Lululemon sign is seen at a shopping mall in San Diego, California, November, 23, 2022.

Mike Blake | Reuters

Lululemon on Tuesday reported strong holiday-quarter sales, suggesting wealthier shoppers are still purchasing yoga pants and tops despite rising prices for essential goods.

The company also issued upbeat guidance for its new fiscal year.

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We're initiating a position in this retailer as a turnaround play

Shares of Lululemon jumped about 11% in after-hours trading following the report. Through Tuesday’s close, the stock is about flat for the year, putting the company’s market value at $40.87 billion.

Here’s what the company reported for the three-month period ended Jan. 29, compared with Wall Street expectations based on a survey of analysts by Refinitiv:

Earnings per share: $4.40 adjusted vs $4.26 expected
Revenue: $2.77 billion vs. $2.7 billion expected

Lululemon’s fourth-quarter net income fell to $119.8 million, or 94 cents per share, from $434.5 billion, or $3.36 per share, a year ago. Excluding impairment and other charges related to the acquisition of Mirror, as well as other items, per-share earnings were $4.40.

Revenue rose to $2.77 billion from $2.13 billion a year ago.

The company expects fiscal 2023 revenue of between $9.3 billion and $9.41 billion, topping Wall Street’s expectations of $9.14 billion, according to Refinitiv estimates. The company expects full-year profit of between $11.50 and $11.72 per share, compared with Refinitiv estimates of $11.26 per share.

“Looking ahead, we remain optimistic regarding our ability to deliver sustained growth and long-term value for all our stakeholders,” said Chief Financial Officer Meghan Frank in a statement.

The Vancouver-based athletic apparel retailer said total comparable sales for the fourth quarter increased by 27%. Also called same-store sales, the metric includes sales from stores open continuously for at least 12 months.

“We believe that it is one of the few companies in the space that has a very long pathway for growth, and it’s also a very highly visible one,” said Rick Patel, managing director at Raymond James.

Patel said his firm, which maintains a strong buy rating on the stock, sees upside in Lululemon’s international business and its men’s business, and that the worst of the company’s inventory struggles are in the past.

In December, Lululemon said inventories at the end of its third quarter were up 85% year-over-year. The company said Tuesday that as of the end of 2022, inventories were up 50%.

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Business

Home prices cool in January, even falling in some cities, S&P Case-Shiller says

Published

9 hours ago

March 28, 2023

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A “For Sale” sign outside of a home in Atlanta, Georgia, on Friday, Feb. 17, 2023.

Dustin Chambers | Bloomberg | Getty Images

Home prices cooled in January, up only 3.8% nationally than they were a year earlier, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. That is down from 5.6% in December.

Prices have been falling for seven straight months, but the decline was a bit smaller in January. That was likely due to a brief drop in mortgage rates and a resulting jump in sales.

The 10-city composite rose 2.5% year over year, down from 4.4% in December. The 20-city composite also rose 2.5%, down from 4.6% in the previous month.

Home prices have been cooling due to higher mortgage rates. The average rate on the popular 30-year fixed mortgage set more than a dozen record lows during the first two years of the pandemic, briefly going below 2%, but it grew sharply. Since fall, the rate has been hovering in the high 6% range, although it’s been volatile in recent weeks due to several bank failures and the resulting stress on the overall banking industry.

“Despite this, the Federal Reserve remains focused on its inflation-reduction targets, which suggest that rates may remain elevated in the near-term,” said Craig Lazzara, managing director at S&P DJI, in a release. “Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months.”

Prices were lower year over year in San Francisco (-7.6%), Seattle (-5.1%), Portland, Oregon (-0.5%) and San Diego (-1.4%). They were flat in Phoenix.

Miami, Tampa and Atlanta again saw the hottest annual price gains of the top 20 cities. Miami prices were up 13.8%, Tampa prices up 10.5%, and Atlanta prices rose 8.4%. All 20 cities, however, reported lower prices in the year ending January 2023 versus the year ending December 2022.

Homebuyers may be seeing more flexible sellers this spring, but there are still too few homes available for sale. Mortgage lending may also tighten in light of pressure on the banking system.

“More expensive, less available borrowing, especially with an unclear economic outlook, is likely to continue to limit buyer demand. Though home sales are expected to rebound in line with seasonal trends, this spring’s sales pace is expected to remain lower than last year, as uncertainty and high costs limit activity,” said Hannah Jones, economic data analyst for Realtor.com.

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Business

Virgin Orbit extends unpaid pause as Brown deal collapses, ‘dynamic’ talks continue

Published

1 day ago

March 28, 2023

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107213152-1679493885006-gettyimages-1246113389-launcherone_rocket.jpeg

NEWQUAY, ENGLAND – JANUARY 09: A general view of Cosmic Girl, a Boeing 747-400 aircraft carrying the LauncherOne rocket under its left wing, as final preparations are made at Cornwall Airport Newquay on January 9, 2023 in Newquay, United Kingdom. Virgin Orbit launches its LauncherOne rocket from the spaceport in Cornwall, marking the first ever orbital launch from the UK. The mission has been named Start Me Up after the Rolling Stones hit. (Photo by Matthew Horwood/Getty Images)

Matthew Horwood | Getty Images News | Getty Images

Virgin Orbit is again extending its unpaid pause in operations to continue pursuing a lifeline investment, CEO Dan Hart told employees in a company-wide email.

Some of the company’s late-stage deal talks, including with private investor Matthew Brown, collapsed over the weekend, people familiar with the matter told CNBC.

Hart previously planned to update employees on the company’s operational status at an all-hands meeting at 4:30 p.m. ET on Monday afternoon, according to an email sent to employees Sunday night. At the last minute, that meeting was rescheduled “for no later than Thursday,” Hart said in the employee memo Monday.

“Our investment discussions have been very dynamic over the past few days, they are ongoing, and not yet at a stage where we can provide a fulsome update,” Hart wrote in the email to employees, which was viewed by CNBC.

Brown told CNBC’s “Worldwide Exchange” last week he was in final discussions to invest in the company. A person familiar with the terms told CNBC the investment would have amounted to $200 million and granted Brown a controlling stake. But discussions between Virgin Orbit and the Texas-based investor stalled and broke down late last week, a person familiar told CNBC. As of Saturday those discussions had ended, the person said.

Separately, another person said talks with a different potential buyer broke down on Sunday night.

The people asked to remain anonymous to discuss private negotiations. A representative for Virgin Orbit declined to comment.

Hart promised Virgin Orbit’s over 750 employees “daily” updates this week. Most of the staff remain on an unpaid furlough that Hart announced on Mar. 15. Last week, a “small” team of Virgin Orbit employees returned to work in what Hart described as the “first step” in an “incremental resumption of operations,” with the intention of preparing a rocket for the company’s next launch.

Virgin Orbit’s stock closed at 54 cents a share on Monday, having fallen below $1 a share after the company’s pause in operations.

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Virgin Orbit developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight. But the company’s last mission suffered a mid-flight failure, with an issue during the launch causing the rocket to not reach orbit and crash into the ocean.

The company has been looking for new funds for several months, with majority owner Sir Richard Branson unwilling to fund the company further.

Virgin Orbit was spun out of Branson’s Virgin Galactic in 2017 and counts the billionaire as its largest stakeholder, with 75% ownership. Mubadala, the Emirati sovereign wealth fund, holds the second-largest stake in Virgin Orbit, at 18%.

The company hired bankruptcy firms to draw up contingency plans in the event it is unable to find a buyer or investor. Branson has first priority over Virgin Orbit’s assets, as the company raised $60 million in debt from the investment arm of Virgin Group.

On the same day that Hart told employees that Virgin Orbit was pausing operations, its board of directors approved a “golden parachute” severance plan for top executives, in case they are terminated “following a change in control” of the company.

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