With its $3.8 billion purchase of DreamWorks Animation SKG Inc. Thursday, Comcast (NASDAQ: CMCSA) is now the owner of two movie studios.
So how does a Philadelphia cable company get so deeply rooted into the most byzantine of businesses, Hollywood movie-making? Almost by accident, it seems.
In a feature story tracking Comcast's steady march to movie-business power, Bloomberg connects the dots to how the MSO learned that the film biz can be consistently profitable if family hits are tied to theme park attractions and consumer products, much the way Disney has done it for decades.
"Initially, we underestimated the theme parks business," said NBCUniversal chief executive Steve Burke. "Once we understood its potential, we jumped in and increased our investment in new attractions and hotels."
Through its Universal Pictures division last year, Comcast saw Minions gross $1.16 billion at the global box office, while Jurassic World grossed $1.67 billion. These hits were then translated into rides, attractions and tchotchkes at NBCU's theme parks division, which saw revenue spike by 57.5 percent in the just-reported first quarter.
While Universal Pictures churned out hits in 2015, more would be better as far as family-oriented entertainment is concerned. For its part, DreamWorks Animation (DWA) has the goods, producing recent hit film franchises such as Madagascar, Kung Fu Panda and How to Train Your Dragon.
"They're borrowing a page from the Disney playbook," media analyst Craig Moffett said to Bloomberg. "They're turning characters into 360-degree brands and marketing them in theme parks and merchandising. Comcast has a collection of assets which allows them to promote DreamWorks characters in a tremendous number of places."
Initially, however, Comcast CEO Brian Roberts and his team approached NBCU's Universal Pictures asset with some trepidation.
"The movie business was everything Comcast didn't like," Jeff Shell, chairman of the Universal Filmed Entertainment Group, said to Bloomberg. "It's volatile. It's risky. It hasn't traditionally had good returns."
- reads this Bloomberg story
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