Comcast’s (NASDAQ:CMCSA) NBCUniversal has seen a great year so far with its movie business. The studio has taken 14% of the $10.64 billion U.S. box office revenues, its highest share since 2000, and released two of the three highest-grossing films of the year on a global basis.  The studio’s high ride was primarily driven by the success of Despicable Me 2, and Fast And Furious 6.
According to our estimates, NBCUniversal contributes close to 20% to Comcast’s value. While the movie business accounts for close to one fourth of NBCUniversal’s revenues, it contributes only 12% to the operating income. Such low value contribution can be attributed to the higher marketing costs involved in the movie business.
- Have Comcast’s Investments In Growth Increased In The Last Four Years?
- How Much Can The VoIP Segment Add To Comcast’s Topline In The Next Five Years?
- Threat To Pay TV Business Can Negatively Impact Comcast’s Value
- What Can Push Comcast’s Value Up In The Next Couple Of Years?
- Comcast Q1 Earnings: High-Speed Internet, Pay-TV And NBCUniversal Continue To Grow
- What Has Led Comcast’s Revenue And EBITDA Growth In The Last Five Years?
Movie Business For Comcast
Comcast’s Filmed Entertainment division includes production, acquisition, marketing and distribution of movies and stage plays worldwide by Universal Pictures. For the first nine months in 2013, the filmed entertainment division’s revenues were $4 billion and operating income was $290 million. This contributed 8% to Comcast’s overall revenues and 3% to its operating income. 
Universal Pictures has some critically acclaimed and popular franchises to its portfolio, including Jurassic Park, Fast and Furious, Bourne and The Transformers. Earlier in July this year, the studio inked a 5-year deal with Legendary Films. While Universal will market, co-finance and distribute Legendary films, the latter will expand its intellectual properties into Universal’s theme parks (See – Comcast Eyes More Theme Park Attractions With Legendary Films Deal). Legendary’s first big project with Universal Pictures may be Dracula, which is expected to release on August 8, 2014. Further, it may co-finance the Universal’s big budget and much-awaited Jurassic Park 4, which will begin production next year.
The theatrical business depends on the audience’s response to the movies. R.I.P.D. for instance was a disappointment for Universal this year, while Despicable Me 2 turned out to be one of the most profitable movies for Universal. Despicable Me 2 cost a modest $76 million to produce and so far it has grossed close to $920 million in box-office sales globally. 
It is understandable that a studio cannot deliver 100% hits. Some projects make money and some lose money. Overall things look very encouraging for Universal Pictures and it will be interesting to see if studio manages to repeat its success in 2014, given the tough competition from Disney and Time Warner. Disney’s Need For Speed and Captain America: The Winter Soldier and Warner Bros’ 300: Rise of An Empire and Godzilla are some of the popular titles that will release in 2014.Notes: