Time Warner (NYSE:TWX) has topped 2013 with highest global box office grossing. The company’s studio Warner Bros benefited from titles such as The Hobbit: The Desolation of Smaug, Man of Steel, Gravity, Pacific Rim, The Great Gatsby, We’re The Millers, The Conjuring and The Hangover Part III. These movies performed well in 2013 and the studio grossed $4.12 billion in the global box office.  In the U.S., the studio’s market share went up to 17% compared to 15% in 2012.  Warner Bros might continue to ride high this year given its solid lineup that includes 300: Rise of An Empire, Godzilla and The Hobbit: There and Back Again.
Time Warner’s Movie Business
Time Warner’s Film and TV Entertainment segment consists of businesses managed by Warner Bros that principally produce and distribute feature films, television shows and video games.
For the first nine months in 2013, the Film and TV Entertainment division’s revenues were $8.32 billion and operating income was $751 million.  This contributed 37% to Time Warner’s overall revenues and 16% to its operating income. The lower contribution to profit can be attributed to higher marketing costs involved in this business. The theatrical content accounted for less than half of these revenues, while the rest were related to television. The pure movie business accounts for only 6% of Time Warner’s value, according to our estimates. We estimate the total theatrical film revenues will be around $2 billion in 2014. However, any changes to this estimate will have a minimal impact on Time Warner’s stock due to its small position in the mix.
What Is Driving Warner Bros. Growth?
For Warner Bros., DC Universe characters are the key to success in the movie business. The DC Universe is the shared universe where most of the comic stories published by Time Warner’s DC Comics take place. The studio is also benefiting from a shift in its strategy by bringing different characters into each other’s film. For instance, there were six DC world characters present in Man of Steel and the studio may move forward with more of such attempts. 
On the other hand, Comcast’s (NASDAQ:CMCSA) NBCUniversal has been focusing on its strategy to partner with international franchisees and target the international box office, while Disney (NYSE:DIS) has been eying bigger franchisee names and come up with a limited number of releases. Given their solid box office performances in 2013, all three studios appear to be on the right track.
It will be interesting to see how the battle unfolds between the top studios in 2014, given the competition from Disney and Viacom’s Paramount Pictures (NASDAQ:VIA). Disney’s Need For Speed and Captain America: The Winter Soldier, along with Viacom’s Transformers: Age of Extinction, Hercules and Teenage Mutant Ninja Turtles, are the popular titles scheduled for release in 2014.
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