This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Time Warner: Impact of Latest Harry Potter Film on Stock

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Trefis ) -- Warner Brothers, Time Warner's (TWX) movie entertainment arm, is going to launch part 2 of Harry Potter and the Deathly Hollows in 3D during 2011. We take this opportunity to estimate the value of such movies from Time Warner's perspective. Time Warner competes with Viacom (VIA), News Corp (NWS), CBS (CBS) and Disney (DIS) in the media and entertainment business.

Our price estimate for Time Warner's stock stands at $35.51, in line with market price.

Success of Part 1

Harry Potter and the Deathly Hollows Part 1 earned global box office revenues of close to $950 million, with 31% coming from the U.S. box office and the remaining 69% coming from the international box office. This suggests that this movie alone accounted for a good portion of Time Warner's annual box office revenues. We should note that, since the movie launched in late 2010 and remained in theaters into 2011, the revenues cited above are spread across both years.

Looking Ahead to Part 2

With the expected launch of part 2 in 2011, the year is shaping up nicely for Time Warner's movie arm. Since 3D movies often have ticket prices about $3 higher than regular movies, the company get an added boost to revenues.

With a successful theater run for part 2, Time Warner can gain both domestic and global box office market share. We estimate that Warner Brothers is the most important division for Time Warner, representing about 35% of the company's stock value. We include the company's box office business within this arm, and estimate that box office operations single-handedly generate 12% of Time Warner's stock value.

While a slight uptick in box office market share for 2011 alone is immaterial, the company's stock value could see real upside if these market share gains can be sustained over the long-term. You can drag the trend line in the interactive charts above to see how changes to Time Warner's box office market share outlook can affect the company's stock value. See our full analysis for Time Warner here

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.

Stock quotes in this article: TWX 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,501.65 -12.72 -0.08%
S&P 500 1,875.39 -4.16 -0.22%
NASDAQ 4,126.9670 -34.4910 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs