Forty years! It was 40 years ago today that Star Wars hit movie theaters. George Lucas' tale is one of classic themes, with its Manichaean good vs. evil plotline and the heroes modeled after the archetypes laid out by Joseph Campbell in The Hero With a Thousand Faces.
No one, not even a visionary like Lucas, could have envisioned the success of Star Wars. To this day, even without adjusting for inflation, Star Wars (Episode IV: A New Hope, to put it properly) is still the 11th-highest grossing movie of all time. The highest-grossing film ever is The Force Awakens, No. 7 in Lucas' nine-part story, and really only James Cameron can come close to making hits like the Jedi Master did.
The Star Wars property, to use a Hollywood term, is now owned by Disney (DIS) , which is releasing new films based on Lucas characters under its Buena Vista films marquee. You'd be risking your life to call Star Wars a "property" in a room full of rabid geeks at a Star Wars convention, but people who know that Han Solo was wrong to use parsec as a measure of time (it's actually a measure of distance) when bragging about the speed of the Millennium Falcon are probably not that rational to begin with.
From an investment standpoint, it is wiser to look for the next Star Wars. Looking at the weekly grosses in 2017 from the excellent site Box Office Mojo shows two clear patterns.
With all the talk of cord-cutting and Netflix (NFLX) , things are actually pretty good at American cinemas. Year-to-date industry grosses have risen 1.9% and that is against a very strong year in 2016, when the aggregate box office gross rose 6.5%.
Yes, inflation is part of that increase, but the fact that movie exhibitors are able to raise prices is a sign of strength, not weakness. If everyone was binging on the couch every weekend, that would not be the case. People still go to the movies.
As a bit of a film buff, however, I can say what those moviegoers are going to see is uninspiring, to say the least. That is a less prosaic way of saying Hollywood continues to rehash the same tired old crap. But it works!
Alien: Covenant won last weekend's box office, and that continued the recent trend of franchise films dominating the screen. Eight of the last 10 weekend winners have been sequels, and with Pirates of the Caribbean: Dead Men Tell No Tales opening this weekend, it is likely that trend will continue.
So an investor could buy Disney, Viacom (VIAB) (Paramount), Fox (FOX) , Time Warner (TWX) or Comcast (CMCSA) (Universal) to gain exposure to the movie industry. Of that cohort, though, only Comcast, up nearly 18% this year, has outperformed the S&P 500. Viacom and Fox are actually down year to date and the corporate drama at Time Warner and the rapid loss of households for Disney's ESPN have caused those stocks to lag as well.
Clearly, though, investors are not as enamored with the cinema stocks as average folks are with filmed entertainment. The best indication of that is the performance of Lions Gate (LGF) , the closest thing to a pure play on the movies among listed stocks. LGF.B shares have fallen 4.6% this year, and that underperformance seems to be driving investors' lack of enthusiasm for Lions Gate's newly purchased Starz unit.
So my advice to you is to sit back, pop in a Blu-ray version of Star Wars and celebrate the 40th anniversary in style. While doing that, though, you should be investing your dollars in galaxies far, far away from filmed entertainment.