Wednesday, March 27, 2013

Iron Man 3: Worldwide Forecast

It’s the time of the year again when major blockbusters start blowing up records and out-doing most
analyst’s expectations.  Iron Man 3 is one of the most anticipated movies of Summer 2013. Not only is it of interest to aficionados and movie fans, but also to movie analysts for its “uncertain” box office performance. The questions such as, can “Iron Man 3” be considered a sequel to The Avengers or is it simply put a sequel to “Iron Man 2” that is chronologically after The Avengers?, are the main complexities of the situation. And from that other questions appear: Will Iron Man 3 join the billion dollar club?  Is the 3D a helpful extension?... Therefore, it seems that Iron Man 3 is one of those special cases that require in depth analysis and attention.

First off, we will look at what made the Avengers an incredible success. Marvel’s plans for its comic-to-movie process have confounded many people. The crux of its success is attracting as many fans and movie goers as possible. This was done by setting up three different movies with different characters, genres, and tones. And all these three movies were expected to end up interesting a larger demographic. And they did. The smart and effective use of market segmentation helped make the Avengers the third highest-grossing movie of all-time—a coveted seat by many film companies. So, how does this play out with Iron Man 3?

The marketing effort for Iron Man 3 has been efficacious which is exemplified by the view counts of many of the trailers and the increase in Facebook likes. The possible reason to this is the change in tone of the trailers (at least what is being advertised is). Previously, Iron Man 2 and Iron Man were far more lightweight and less serious. However, in Iron Man 3 trailers, the music, the images, are all different. The stakes are high, the action is on a large-scale, and most-importantly the humanity of the hero is being finally shown via his trepidation, his worries, his romantic interest, and the score of the trailer. The trailers even are in some ways analogous to The Dark Knight and The Dark Knight Rises—both in terms of the villain and the more profound and solemn tone. In another smart way to attract more people, the trailers also make a note about the Avengers (“New York”)—which clearly tries to make Iron Man 3 seem like a sequel to The Avengers.

With a strong marketing effort, the only remaining aspect that is important is obviously the material itself. Most billion dollars films are well-received, so having some worthy direction and special effects play a big role in the films chances at attaining the billion dollar seat. Although we can’t generalize, it is suffice to say from the trailers that the film has some entertaining scenes both action wise and critical wise—that will unequivocally appeal to a larger audience. One drawback to the film’s North American box office performance is the scheduling. The month of May is packed with three major movies that have overlapping demographics. Though it may pose a problem, the grosses should eventually normalize but the spread may not be even. In addition, the probability of approximately equal grosses is highly unlikely therefore it seems that one of the films would suffer from the high competition.

Internationally, Iron Man 3 should experience a staggering increase both due to the 3D and the positive reputation from the Avengers. Most importantly, however, is the Chinese addition internationally. The inclusion of Chinese production should notably increase its Chinese gross (not to mention the fact that it is a booming country). Russia should also be a player in its international cume. Thus, Iron Man 3 is expected to have a propitious rollout internationally.

Calculations put the Iron Man 3’s final worldwide gross at $944 million with $371 million from North America and $573 million from non-north American countries. The projections do not mean that film can’t reach the billion dollar mark. Our range is between $850-$1,100 million with a 44% chance that it can pass the billion dollar threshold.
Worldwide Forecast: $944 million (51.3% increase from Iron Man 2 and 61.3% increase from Iron Man)

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