Sequel The Hunger Games: Catching Fire seen to get most of revenue from overseas

Updated: Thursday November 21, 2013 MYT 9:42:23 AM

Sequel The Hunger Games: Catching Fire seen to get most of revenue from overseas

LOS ANGELES  When the sequel “The Hunger Games: Catching Fire” debuts worldwide on Friday, industry analysts believe the movie from studio Lions Gate Entertainment  will set international box offices ablaze in a bigger way than the first film. The original “Hunger Games” movie in 2012 became a smash hit with strong sales in the United Statesand Canada, but pulled in less than half of its box office grosses in overseas markets, a modest foreign take by blockbuster standards. Today’s biggest Hollywood movies often earn 50 to 70 percent of their revenue overseas.To lift overseas sales for “Catching Fire,” earlier this month Lions Gate sent actress Jennifer Lawrenceand her co-stars on a whirlwind tour with premieres in five European cities in five days, taking the unusual step of promoting the film in several foreign markets before the big U.S. premiere, held on November 18 at the 7,000-seatNokia Theatre in Los Angeles.

By the time the film’s scrappy heroine Katniss Everdeen pulls back her archery bow on Friday, “Catching Fire” will be playing in 65 markets around the world including China, a simultaneous opening the studio set to dramatize the movie’s debut as a global event.

The first “Hunger Games” film collected just 41 percent of its $691 million in total ticket sales outside theUnited States and Canada, according to the Box Office Mojowebsite, the third lowest foreign percentage among the top 100 films of all time.

For “Catching Fire,” Lions Gate took deliberate steps to fuel international interest in the films, which are based on Suzanne Collins’ novels about an oppressive post-apocalyptic society that stages teen death matches to maintain order among its citizens.

Back in May, Lions Gate was stoking interest with a lavish party at the Cannes Film Festival in Franceattended by Lawrence and co-star Liam Hemsworth. Behind the scenes, it had secured new distribution deals around the world to maximize sales in each country.

“We’re confident that we have positioned ‘Catching Fire’ as a global phenomenon that will continue the growth of the franchise,” Lions Gate CEO Jon Feltheimer told Wall Street analysts on a November 8 conference call. The studio expects the sequel will “significantly outperform” the first movie in overseas markets, Feltheimer said.

Evercore Partners analyst Alan Gould believes “Catching Fire” will light up box office charts around the world. He projects $950 million in global sales, with $575 million, or 61 percent, from overseas markets.

The second film stands to benefit, says Gould, from the attention the first movie gave to the franchise. International sales of the books in the series have jumped, he said.

Lions Gate also has partnered with stronger international distributors that will help it secure placement of the film in prime theater locations, the analyst said.

The premieres in London, Berlin, Paris, Madrid and Rome will help boost overseas ticket sales higher, he said.

Foreign sales “are the biggest driver of the stock,” said Gould, who rates Lions Gate “overweight.” Investors will extrapolate results from “Catching Fire” to the two upcoming sequels “Mockingjay Part 1” and “Mockingjay Part 2,” coming in November 2014 and November 2015, he added.

“Catching Fire” is already performing better than its predecessor overseas, according to Lions Gate, which says the sequel had ticket sales of $6.3 million in Brazil last weekend, more than twice the initial sales for “Hunger Games” in that country.

The domestic box office for the second film will likely be similar to the first installment, said Phil Contrino, chief analyst with Boxoffice.com, who currently projects “Catching Fire” will generate sales of $385 million during its theatrical run in U.S. and Canadian theaters.

In 2012, “Hunger Games” generated $408 million in the United States and Canada, ranking it as the year’s third-best selling movie.

Lions Gate has more on the line this time, having spent about $130 million to make “Catching Fire,” a boost from the $80 million it spent to produce the prior film. In both cases, the studio spent roughly $55 million on marketing, according to a person familiar with the matter.

The film has already generated buzz on social media. Facebook “likes” on the “Hunger Games” page have jumped to 11.6 million from 3.1 million just before the first movie debuted. And that number is being boosted by the increasing amount of foreign interest in U.S. films, says Contrino.

“It’s really part of a boom right now,” he said. “This movie is poised to take full advantage of that.” – Reuters

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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