The media and entertainment industry has some big names that have benefitted from blockbuster movies that released during the recent past. The success or failure of a single movie can impact the financials of companies of this sector to a great extent. One good example is the Walt Disney Company (DIS, Financial). This company enjoyed tremendous success from the animated movie, “Frozen” last year. The movie not only went on to win the Oscar for the “Best Animation Movie”, but also resulted in Disney earning millions of dollars in revenues. It would be apt to say that Disney is still living in the laurels of Frozen. This year, the stock is set to soar once again with the release of yet another Star War series of movies, “The Force Awakens”, towards the end of this year. So apart from Disney, who are the other companies who are set to win handsomely from this movie? Read on to know more:
Increased traffic to theatres will benefit this company
Recently, many people choose to watch movies in the comfort of their homes – either on their high-def entertainment systems or through the internet. One of the premier names in the theatre industry, AMC Holdings (AMC, Financial), along with other theatre companies, suffered from losses due to the decreased rate of turnouts of the general public to theatres. The top management of AMC was of the opinion that people were not interested to come to theatres, because of lack of quality of films. This is all set to change now with the release of the movie, “Star Wars: The Force Awakens”. Belonging to the super-successful “Star Wars” series, this movie will surely draw thousands of people to the theatres, thereby improving the profit margins of AMC to a great extent. During the last quarter of 2014, almost all the theatres suffered huge losses and the overall performance was down by 4.3%. AMC was the only theatre company that witnessed around 14% increase in its audiences. The share price trend of the company for the last few years is as follows:
Cutting edge technology comes to the rescue
With technology entering into all the sectors today, can the entertainment industry be left behind? Audiences prefer to watch movies on IMAX screens that are powered by high definition technology these days. This is where IMAX cinemas (IMAX, Financial) stand to gain a lot. With the release of Star War series of movies this year, this theatre is expected to witness improved performance in business. It is a universal truth that all Star Wars series of movies are filled with world-class visual effects and some of the best surrounding sounds and technology. Viewing these kinds of movies on IMAX screens is sure to grant viewers an experience that they would never forget in their lives. In the last 12 months or so, the share prices of IMAX have gone up by 20% and the signs are looking quite bright with the impending release of yet another blockbuster. Let us look at the stock movement of IMAX for the last year here:
Conclusion
Things are indeed looking bright for the media, entertainment and video-gaming industry for 2015 due to this mega budget movie that is going to be released during the end of the year. Anticipations are already sky-high about the impact that this movie could do to these companies. Though Walt Disney would take the lion’s share of profits from the release of “Star Wars: The Force Awakens” as it is producing the movie, the above two companies stand to gain immensely as it will guarantee more people returning to theatres for movie-watching experience. More people would mean more business for these companies.
