'Black Panther' is one of 2 reasons a Wall Street analyst is optimistic about the movie business in early 2018
- RBC raised its forecast for the movie-theater business in the first quarter of 2018.
- The success of "Black Panther" and of 2017 releases was the reason.
- However, RBC warns that the second half of 2018 might not be as rosy.
"Black Panther" is shattering records at the box office, and it has one Wall Street analyst rosy about the entire movie-theater business.
In its opening weekend, "Black Panther" was expected to earn $165-170 million domestically. It ended up snagging a whopping $242 million - even beating the latest "Star Wars" movie.
That's good news for the movie-theater business, which has had to combat the narrative that it's in a slow, secular decline for quite some time. In fact, it's such good news that RBC analyst Leo Kulp has updated his box-office forecast upward, and wrote in a note Thursday that the outlook for the first quarter had "improved dramatically."
"We had been expecting a 12% decline but it looks like 1Q could end up closer to flat," Kulp wrote.
He cited two reasons:
"First, Black Panther substantially outperformed our expectations. We now expect a $500mm+ domestic gross, more than double our previous $220mm estimate. Second, the flow through from late 2017 releases was much stronger than we anticipated. While Star Wars: Last Jedi ended up being light, Jumanji and The Greatest Showman were particularly strong. Several Oscar contenders like The Shape of Water, Darkest Hour, Three Billboards, etc. also contributed."
And Kulp isn't the only one in the industry who has taken notice of what the success of "Black Panther" means for the business, and particularly how it might hint at strong first quarters to come.
"The industry is certainly moving towards a more balanced release calendar," Jeff Bock, a senior analyst for Exhibitor Relations, told Business Insider recently. "Old Hollywood adages are being thrown out the window because audiences, no matter what season, have an insatiable appetite for event films - provided they deliver the goods."
Beyond the first quarter
Kulp also said the second quarter was looking "even stronger" than it had been for the movie-theater business.
But Kulp's optimism doesn't extend to the second half of the year.
He wrote that much of the content in the second half of 2018 is "either untested content designed to appeal to younger audiences (like Peter Jackson's steam punk film Mortal Engines) or remakes of older IP that we aren't convinced resonates."
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