Universal Pictures is poised for record profit after its string of hits

Timing is everything.

Universal Pictures is poised for its most profitable year ever after a string of blockbusters that have surpassed expectations. This weekend, the movie “Jurassic World” rampaged across the globe, scoring the biggest opening of all time with $524 million in tickets sold worldwide.

The studio has racked up more than $3 billion in global ticket sales and is outpacing all of its Hollywood rivals. And it reached that milestone faster than any studio, thanks to big hits such as “Furious 7,” “Fifty Shades of Grey,” both of which also have grossed more than $500 million in worldwide receipts, and the plucky “Pitch Perfect 2.”

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FOR THE RECORD:
Universal Pictures’ profit: An article in the June 16 Business section about Universal Pictures’ box-office receipts said that the studio did not release any films in 2014 that made more than $70 million domestically. In fact, Universal did not release any movies last year that cost more than $70 million to produce. —
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“We are having a very good year,” said Nick Carpou, president of domestic distribution at Universal Pictures. “It’s an embarrassment of riches.”

But this is a year that almost wasn’t.

Three of those films — “Jurassic World,” “Furious 7” and “Fifty Shades” — were initially scheduled to run in 2014. Various circumstances — a tragedy, creative considerations and a heavy dose of strategic marketing — bumped them to this year’s slate.

When “Fast and Furious” star Paul Walker died in a car crash in 2013, midway through shooting the latest installment, the production was thrown into limbo. Filmmakers wrestled with their emotions and whether even to finish the picture.

Early in the production on “Jurassic World,” executive producer Steven Spielberg decided the film, which relies heavily on computer-generated dinosaurs, would benefit from another year of work. Studio executives acquiesced to Spielberg, who directed the 1993 original “Jurassic Park.”

With “Fifty Shades,” Universal’s marketing team lobbied for the Valentine’s Day weekend release date, figuring that was their best chance to boost the film’s box-office prospects. Men, who otherwise might recoil at watching a steamy romance film, would allow their girlfriend or spouse to select the movie. Their strategy worked.

Even the Comcast-owned studio’s next potential blockbuster, “Minions,” was first scheduled to run last December. The spinoff of the hugely successful “Despicable Me” franchise was delayed until July 10 to make room for a massive rollout of toys and other products.

Chance certainly played a part in Universal’s blockbuster year. But analysts point out that the studio still needed a strong hand of cards to play — and now it’s cashing in.

“It’s just a matter of getting as much money from the table as they can,” said analyst Phil Contrino of BoxOffice.com. “You’re talking about well-paid executives being very strategic about how they place, how they market and how they make these films.”

When the final weekend box-office receipts were tallied Monday, the movie stunned the industry by setting a domestic record with $208.8 million during its first three days, with nearly half of that coming from 3-D screenings.

The huge haul boosted Universal past the $1-billion mark in domestic box-office receipts and into the No. 1 spot among studios with 21.5% of the market, according to data firm Rentrak. Universal crossed that threshold in record time, beating the previous record that was set in 2008 when Paramount Pictures released “Iron Man” and “Indiana Jones and the Kingdom of the Crystal Skull.”

It might still be a tight race by year-end to see which studio comes out on top. Warner Bros. currently is No. 2 with $967 million and a 20% market share, and Walt Disney is third with $882 million and 18.2% of the market.

Executives at Los Angeles-based Universal couldn’t remember a time the studio finished a year No. 1 at the box office. This year marks a contrast from last year, when Universal released few big-budget films. None of the studio’s 2014 projects cost more than $70 million to produce.

Beyond the shift in scheduling the films, several other factors contributed to this year’s standout performance. Universal has benefited from a reinvigorated management team, greater emphasis on international distribution and marketing, and movies that play well in 3-D and on Imax screens.

Nearly two years ago, NBCUniversal made high-level management changes at the studio. Donna Langley was given expanded duties and promoted to chairman of Universal Pictures. She is in charge of production, marketing and specialty label Focus Features. Jeff Shell, who previously ran NBCUniversal’s international TV division, was brought in as chairman of Universal Filmed Entertainment Group.

As part of the changes, the studio has been ramping up its international efforts to take advantage of the burgeoning market in China and other countries. For example, “Jurassic World” racked up nearly $100 million in ticket sales in its first five days in China.

“This movie redefines the stratosphere of international box-office potential,” said Jason E. Squire, a film business professor at USC. “It’s a confirmation of what executives have been saying for years, which is that the local market is basically mature, and the real profitability growth is overseas.”

Universal executives also are putting more emphasis on marketing, which was evident in how the studio promoted “Jurassic World.” Previews of the film aired during high-profile sports events, including a Thanksgiving Day football game and the Super Bowl. That provoked early interest that kept building — to the delight of theater owners who just last week were fretting about the summer box office.

Higher ticket prices were part of the equation. Audiences were willing to pay extra to see “Jurassic World” on big screens and in 3-D, which can cost about 25% more than a typical ticket.

Theater technology company RealD said 3-D screenings generated nearly half of the domestic box-office total for the film and about 65% of the international grosses. Imax theaters posted records, generating $44 million in ticket sales worldwide on 806 screens, with about $21 million of those grosses coming from its North American theaters.

“This is a movie that demands to be seen with a group of people,” said Greg Foster, chief executive of Imax Entertainment. “It’s not the kind of thing you want to see on an iPhone, on an iPad or alone. They wanted to go see it in a big, giant theater.”

Theaters quickly added additional screens to show the film as early audiences gushed about the film and ticket sales heated up. Analysts also attributed the success to its family friendly plot, nostalgia for Spielberg’s original and lead actor Chris Pratt’s rise to stardom.

“The numbers just kept building and they continued to surprise over the weekend,” Carpou said.

However, the movie’s success wasn’t a sure thing. Not all reboots are successful, and on paper “Jurassic World” came with plenty of risk. The film took more than a decade to come to life. It has been 14 years since the last “Jurassic” film, and “Jurassic World’s” 38-year-old director, Colin Trevorrow, had just one previous feature to his name, a low-budget independent film.

Universal is also not taking home all the money. Legendary Pictures contributed about 25% of the estimated $150-million production budget for “Jurassic World,” meaning the company will collect a significant chunk of the grosses after Universal splits the revenue with theater owners.

The hot streak for Universal is expected to continue. The raunchy teddy bear comedy “Ted 2” comes out June 26, followed by “Minions” next month. Later this summer, the studio will release “Trainwreck” with comedienne Amy Schumer, followed by N.W.A. biopic “Straight Outta Compton.” And in October, the highly anticipated “Steve Jobs” will hit theaters.

For Universal, “Minions” is particularly important because the studio owns the film and doesn’t have to split the proceeds with a co-financier.

Universal has been heavily marketing the film, which tells the origin story of the mischievous, bright yellow sidekicks from the “Despicable Me” movies. The 2013 “Despicable Me 2” brought families to the theaters in droves as it hit $970.8 million globally, and “Minions” could be even bigger, box-office observers say.