Can Murdoch make Chipmunks out of Na’vi?

January 6, 2010

Rolfe Winkler2.jpgAvatar’s $1 billion in ticket sales may garner all the headlines for News Corp’s Fox, which released the sci-fi spectacle. But the studio’s other holiday film, “Alvin and the Chipmunks: The Squeakquel”, may be more valuable to shareholders in Rupert Murdoch’s media group over the long run.

While Avatar packed them in, the latest offering from the world’s most popular singing rodent trio surpassed the quarter-billion dollar mark despite poor reviews and heavy competition. Indeed the Chipmunks demonstrate the importance of franchise value to the movie business.

Alvin, Simon and Theodore have been around since 1958, inspiring TV shows, hit songs and two feature films. The first film grossed $361 million at the worldwide box office while the second is already up to $255 million after just 12 days in wide release. Ancillary revenues like DVD and lunchbox sales could add millions more.

For investors, who prefer recurring profits and low risk to big bold bets on potential blockbusters, this is pay dirt. Like Spider-Man, Harry Potter or Batman, there is a long-term revenue stream attached to the Chipmunks. It’s partly why Disney – with its focus on princesses, pirates and now, with Marvel, superheroes – commands a higher multiple of earnings than many rivals.

Avatar doesn’t have to be a one-off. James Cameron says he’s thinking of making it a trilogy. But the 55-year old director took 15 years to make Avatar and hasn’t written a second script. And with the first film such a success, he may command an even larger ownership stake in any sequels.

As a one-timer, Avatar’s value to Fox may not be much beyond its contribution of $100 million (and counting) that JPMorgan estimates it will add to News Corp’s operating profits. But multiply by five the $40 million the Squeakquel will squirrel away, to reflect the likelihood the franchise will endure, and three 50-year old Chipmunks trump Mr. Cameron’s fictional Na’vi.


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Thanks Rolfe. Also see: -game-how-federal-reserve-monetizing-deb t/25806

Posted by Gregman2 | Report as abusive

That’s very funny, good to see that they taught you some other stuff at varsity. IanM. Banks also carries on about ‘Avatars’, I am reading ‘Look to Windward’, it is just much more tedious than the movie. It must be the most repeated shell-shocked TS Eliot passage (Consider Phlebas from Wasteland), apparently the opening scenes of Avatar made people vomit out here, I would hate to know what the next 30 years brings up. I just threw popcorn back at them and the dark. Hopefully we would have moved on to 4- and 5-D by 2040. Of course we all prefer to forget Isaac Asimov, Philip K Dick and Greg Egan. It makes better reading than the NYT.

Posted by Ghandiolfini | Report as abusive

Basil Rathbone as Sherlock Holmes – over a dozen releases. Die Hard. Star Wars. Planet of the Apes. And of course, Alien(s) whence the relationship with Cameron presumably grew into contractual agreement to do whatever, as long as it doesn’t lose money…

One might say, 20thC/Fox has a trick or two up its sleeve when it comes to sequels. Best thing they’ve going for them is keeping the Dirty Digger at bay unlike that other Newscorp outlet where his blue-in-the-face pundits reign in hideous binary 2-D, 24/7.

Posted by HBC | Report as abusive