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Can Stiff Competition Derail Disney Box Office Rule in 2019?

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The preceding festive weekend saw what it had expected to see — packed theatres and record-hitting domestic box-office sales for the big-ticket releases.

Aquaman, a production of AT&T’s (T - Free Report) Warner Bros., raked in record sales of $67.4 million and still counting at the North American box office. Walt Disney’s (DIS - Free Report) Mary Poppins Returns was right behind with $23.5 million weekend collection at the domestic box office.

Meanwhile, Bumblebee grabbed the third position, fetching an estimated $21.6 million during the weekend for Viacom’s (VIAB - Free Report) Paramount at the domestic box office.

Disney Dominates 2018

Even though Aquaman grossed about $483 million worldwide since its release on Dec 14, almost 10 times more than the estimated $51 million that Mary Poppins Returns made globally since its Dec 19 release, the year was ruled by Disney films.

Earlier this month, Disney Animation’s flick Ralph Breaks the Internet reached the zenith of the top 10 weekend domestic box-office estimates, enabling the company to achieve the worldwide $7-billion mark year to date as of Dec 10.

In January 2018, Disney’s Black Panther alone generated $700 million in domestic sales to become the third-highest blockbuster in the United States.

Per Box Office Mojo, with $3 billion year-to-date collection at the domestic box office, Disney’s Buena Vista studio currently captures the maximum share of the Studio market at 26.3% compared with Warner Bros.’ 15.6%.

All in all, 2018 is undoubtedly proving to be a great year for the domestic box office. Per Hollywood Reporter, the 2018 domestic box office is heading for a record haul and is projected to hit $12 billion. With another holiday weekend to go before the year ends, it remains to be seen how the box office ushers in 2019.

Strong Line-up for 2019

The interesting line-up of Disney movies next year including Captain Marvel, Dumbo, Aladdin, The Lion King, Toy Story 4 and the next Avengers film is expected to deliver yet another year of massive hits.  The Avengers: Infinity War had made a whopping $258 million on its opening weekend domestically. This in turn, augurs well for the success of its sequel in the series. The Lion King as a classic favorite is also a much-anticipated film lined up for the following year.

While the Disney package looks attractive, Warner Bros.’ The LEGO Movie 2, Detective Pikachu, Minecraft and the next of The Conjuring series appear quite promising for the company. Considering the smash hit The Nun, which logged around $54 million at the domestic box office on its opening weekend in September, the next film of The Conjuring series too seems to be a much-touted one.

Severe Competition Dictates Strict Measures

Even though the box office is dominated by Disney, the company faces stiff rivalry in other areas that it operates in. Disney is expected to launch its online streaming service in late 2019 to counter competition from established players in the market, namely Netflix (NFLX - Free Report) and Amazon Prime.

The streaming service is said to feature content from Pixar, Marvel, Lucasfilm and National Geographic. Additionally, Disney is working on building its original content portfolio for its streaming service.

Disney’s planned acquisition of a majority of 21st Century Fox’s assets will significantly expand its content portfolio and is expected to boost the company’s competitive edge against Netflix and Amazon Prime.

Moreover, AT&T is expected to invest heavily in HBO that further intensifies competition in the content market. Further, a strong line-up of movies from the likes of Warner Bros. and Paramount is likely to make it difficult for Disney to repeat its 2018-like dominance.

Disney currently carries a Zacks Rank #4 (Sell).

Both AT&T and Viacom carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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