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Franchise Films Power U.S. Box Office in Q2: Will 2H Repeat?

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The U.S. box office hit a record high of $3.3 billion in the second quarter thanks to summer hits like Incredibles 2, Avengers: Infinity War and Jurassic World: Fallen Kingdom. Moreover, the figures for June came in at an estimated $1.27 billion, the largest ever for the month, beating the previous record set in 2013, according to Hollywood Reporter.

Franchise films have been driving the box office for quite some time and the second quarter wasn’t any different. At the same time it also proves that the appeal for theatrical movie-viewing experience hasn’t faded at a time when streaming giants like Netflix, Inc. (NFLX - Free Report) and Amazon.com, Inc. (AMZN - Free Report) are giving film studios tough competition.

U.S. Box Office on Record-Breaking Spree

The U.S. box office recorded its highest-grossing quarter ever, with revenues of an estimated $3.3 billion. The new domestic box office record surpassed the $3 billion record set in June 2015. Moreover, June 2018 was particularly the best month, posting revenues of $1.268 billion, up 19% year over year.

Incredibles 2 topped the list, grossing $439.7 million, followed by Jurassic World: Fallen Kingdom, which garnered revenues of $264.8 million. Avengers: Infinity War has been the year’s single biggest hit, raking in $672.5 million in revenues.

Disney Leads the Race Yet Again

The U.S. box office was once again dominated by The Walt Disney Company (DIS - Free Report) in the second quarter. Disney was also the best performer in the first half of the year, making up for 36% of the overall yearly market share.

As of June end, Disney made an estimated $2.2 billion in domestic ticket sales, 66.4% higher than the same period last year. June was particularly good for Disney, as the studio made $556 million from five films, led by Incredibles 2. Disney has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .

Other Studios Follow Disney

Universal Pictures, owned by Comcast Corporation (CMCSA - Free Report) , finished second in June, with Jurassic World: Fallen Kingdom making $264.8 million. Time Warner, Inc.’s Warner Bros. too tasted success with it franchise film Ocean’s 8, which has made $116 million so far.

Twenty-First Century Fox (FOXA - Free Report) was the fourth-best performer although it didn’t have a release in June. However, the studio made $78.8 million last month, with another franchise film Deadpool 2 contributing 99% to overall revenues. Deadpool 2 has generated revenues of $311 million since its release in May.

A Quite Place from Paramount Pictures, a subsidiary of Viacom, Inc. (VIAB - Free Report) , earned $187.1 million, 10 times the film’s budget. Another movie, Sicario 2: Day of the Soldado, from Sony Pictures Entertainment, a division of Sony Corporation of America (SNE - Free Report) , opened with $19 million in the last week of June.

Price Performance

 

Franchise Films Score

The success of franchise films was seen last year too, with Star Wars: The Last Jedi emerging as the highest grossing film. Moreover, Jumanji: Welcome to the Jungle, Guardians of the Galaxy and Sony’s Spider-Man: Homecoming, all franchises, took the No. 4, 5 and 6 spots in 2017.

Understandably, all major studios will once again be banking on their franchise power in both the third quarter and the second half of the year. Analysts expect the box office to grow 4% year over year in the current quarter.

Disney has Ant-Man and the Wasp, the last Marvel Comics’ film up for release in July, while Sony has Hotel Transylvania 3: Summer Vacation. Universal’s Mamma Mia! Here We Go Again too releases this month. Paramount’s has Mission: Impossible — Fallout, which releases on Jul 27, and Lions Gate Entertainment Corp.’s (LGF.A - Free Report) The Spy Who Dumped Me are sure to make August a big month for the box office.

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