23 May, 2008

Viacom, Paramount look to capitalize on Indiana Jones

Viacom (VIA) is most certainly a giant media conglomerate, but now and again an event within one business division becomes a rally cry for consumers, shareholders and potentially traders. Viacom hopes that Paramount, George Lucas and Steven Spielberg can deliver theatrical box office records with the latest installment of the Indiana Jones film franchise.

The 4th film in the series, Indiana Jones and the Kingdom of the Crystal Skull opened Thursday and is aiming for box office records over the American Memorial Day long weekend. A 5 Day domestic gross north of $150Million would be a great start for the film. Some analysts are hopeful for over $170Million. Considering the budget for Dr. Jones was around $180Million, with by most estimates, about as much spent on marketing, Paramount needs the box office to come through in a big way! If anyone can do it, it's George Lucas, as his string of successes rank very highly with cinema history's best and most lucrative filmmakers.

The worldwide theater push for the first Indiana Jones film in almost 20 years appears to have set Paramount on the right track to continue its 2008 Summer movie blitz. Paramount was the distribution partner for Marvel Studios (MVL) Iron Man, the biggest film so far this year. While Marvel gets to keep the bigger piece of the pie for Iron Man, Paramount is alone in profiting from the latest escapades of senor Indiana. Can a company as big as Viacom really move off the strength of 1 movie? Absolutely! Will it? Time will tell.

In the past, movies that have captured the imagination of the general public, and created a media frenzy, as has been seen lately with Indiana Jones, certainly have the potential to spread into the trading floors. A good start to Indy, will mean big business for Paramount Pictures and in turn its parent Viacom. Critically the film has done decently well, and it'll be repeat business that will really drive profits. While first week box office records would dominate the headlines, the real profit driver will be the first month.

That is of course, if average folk across the United States want to get into their SUVs, drive to the theatre paying over $4/gallon for gasoline. If one film had the potential to make people forget about economic troubles, it would be the adventures of Indiana Jones.

Disclosure: Author does not own VIA, does own MVL

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