UPDATE (ADDS DETAIL): After Earth, The Lone Ranger, R.I.P.D., and World War Z are among the “most notable candidates” to join the ranks of “several high-profile failures” from the major studios that Cowen and Co’s Doug Creutz predicts this morning. He worries Summer 2013 has “the most crowded release slate in recent memory” and could produce at least eight underperformers. Creutz has been making these domestic predictions for five of the past seven years. Here are his latest studio-by-studio prognostications:
Disney is at risk, Creutz says. He agrees Iron Man 3 will be a hit and projects domestic box office of $350M, and Pixar’s Monsters University should do well to the tune of $250M, but if The Lone Ranger bombs it could “sustain the perception that Disney’s film studio has some serious problems away from the Marvel-Pixar axis.” He expects Lone Ranger to generate $120M domestically but says it’s “a strong contender for an early write-down.” Westerns typically don’t play well overseas, he notes, recalling how even Will Smith’s star power couldn’t save 1999’s Wild, Wild West.
The analyst also forecasts that Paramount is “likely to have a one-up-one-down summer” with Star Trek Into Darkness probably making $250M and World War Z nowhere near that. He predicts just $85M for World War Z, which “had a troubled production” forcing a delay from the original December 2012 release date. It’s also up against Man Of Steel, and he says “buzz has been elusive for the film, as we think audience attention has been drawn to more well-known properties”. The analyst thinks this makes the zombie thriller “another likely candidate for a big write-down”.
Sony “has a lot riding on this summer’s results” but could be disappointed, Creutz says. After Earth ($80M) has the benefit of starring Will Smith, but the analyst notes that director M. Night Shyamalan “has had a string of box office misfires and outright disasters” including The Last Airbender. Meanwhile This Is The End ($75M) is one of the four adult comedies that have a shot at breaking out, but Creutz says “the trailers are more odd than funny.” White House Down ($90M) might suffer because the premise — described as Die Hard at the White House — “feels a bit stale” after following several similar films. He says Grown Ups 2 ($125M) has some of comedy’s “most dependable box office stars” — Adam Sandler, Kevin James, David Spade, and Chris Rock — so the analyst gives it an edge vs. the other adult comedies. And he warns that The Smurfs 2 ($80M) “is coming at the tail end of a summer season that will likely already have seen four other higher quality animated films.”
Universal has “sure-fire hits” with Fast & Furious 6 ($200M) and Despicable Me 2 ($250M), but Creutz is worried about R.I.P.D. ($50M). Although “anything can happen,” it has had “significant problems in production” and “appears to be an attempt to mimic the action-comedy success of Men In Black” and looks like “an enormous long shot.”
Fox is “in OK shape,” Creutz says. He believes toon Epic could see $100M domestically but miss the top 12 due to competition from Iron Man 3 and Star Trek 2. Laugher The Internship ($70M) has a shot, but the analyst says only one adult comedy is likely to be in the top dozen. The Heat ($70M) is one of the others, and has “a bit less star power.” And The Wolverine ($190M) is “likely to make the winner’s circle” if there isn’t “serious audience fatigue around action films” in late July.
Creutz says Warner Bros is “best positioned of all the major studios” to have a strong summer and predicts $220M for successful Superman reboot Man Of Steel. He predicts The Great Gatsby could generate $150M domestically and “might” make the Top 12 as “one of the few films this summer not directed at kids or young men.” He thinks The Hangover Part III will gross $225M. He expects Pacific Rim to hit $150M, though he warned that audiences “might be relatively tired of action fare” by mid-July.
Creutz says Lionsgate is making “a bit of a strategic mistake” with Red 2 ($75M). Although the original 2010 movie was a surprise hit, the sequel is “up against much higher-budget summer action fare” and will “probably mark the end of the franchise.” No matter: He says the film should do “tolerably well,” and points out Lionsgate has the Hunger Games sequel Catching Fire and Ender’s Game this fall.
He notes how DreamWorks Animation‘s one entry, Turbo ($171M), is an event film and characterizes the studio as “regaining momentum” with the success of The Croods. But he worries the new toon also faces too much competition and will be sandwiched between Epic and Sony’s Smurfs 2.
Looking at data going back to 2001, the analyst notes that 12 films released from May through July typically account for 75% of the summer box office — which he expects will hit $3.65B, “essentially flat with 2012.” And the breakdown by genre has been consistent: Action-adventure films haven’t accounted for more than seven of the top 12, and no more than three animated films joined the group. That’s a problem. Studios have spent $100M+ apiece on 12 action-adventure spectacles (he includes Lionsgate’s Red 2, though it’s “arguably on the border” of qualifying) and five animated films for this summer. If history is a guide, “at most nine of these are likely to achieve a level of box office success justifying their cost.”
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