Disney/Marvel: Last of the Independent IP
Disney/Marvel Hybrids: When IP Worlds Collide
Bob (Iger) the Brand Builder, indeed. Who doesn’t love the new Mouse House under Bob Iger? With Pixar as the premium family + crossover adult animation brand acquisition to start (and building direct access to Apple which makes iTunes Video/Apps/Music more lucrative for its properties), followed by Marvel, a brand known originally for its comic books, which is now creating merchandising gold with Iron Man – not to mention the recent Guillermo Del Toro “Disney Double Dare You” line of films/merch, and ImageMovers … and Disneynature – Disney is “crossing genres” while building enormous brand reach in the entertainment marketplace.
Forget the licensing deals that Disney has to earn/work out with competing studios, the real driver is that Iger can start turning on merchandising for upcoming Marvel IP (intellectual property, e.g., the original characters) while cashing in on the current crop of merchandise.
And growing it – meaning every studio salivates at Disney’s ability to merchandise product (and not just Disney DVDs) and grow brand share.
So if Disney can extend the Spider-Man or Iron Man or X-Men brand merchandise, it’s a win-win for all parties until Marvel’s external deals terminate and the Mouse House can own it outright.
The lesson learned many decades ago with George Lucas and a little property called Star Wars is that merchandise rights are extremely valuable, especially as they help build continuity between film and franchise (e.g., sequel) releases.
In Marvel’s case, pre-Disney, they also move you away from a pure for-hire production company. Think of it as entertainment windowing being improved on by actually branding your properties to draw revenue year-round.
Now that Disney is on its acquisitions’ run again, expect the other studios to start trying to create value quickly on both internal IP catalog (Warner Bros’ Robinov taking more control of D.C. Comics) and looking for bargain basement IP acquisitions. We’ll list a few of the more interesting IP catalogs or filmmaker relationships that New Medici would scout after the jump…
IP Catalogs or Filmmakers We’d Be Acquiring @NewMedici:
Dreamworks Animation (and PDI): Shrek, Kung Fu Panda, Madagascar, etc. Paramount has some control, but as Spielberg excused himself with Reliance financing, Katzenberg’s Animation could do similar. Where’s the Kung Fu Panda merch on the market?- Summit Entertainment: Two words: “Twilight Saga.” Plus, one assumes with Twilight’s success, Rob Friedman and team are scouring for the next teen sagas. Call it the revolving Harry Potter franchise meets new audiences.
- Lionsgate: Horror, urban comedy, action – and a huge IP library that primarily plays in home entertainment. A studio looking to create more brands, it’s been building them up in the torture porn/horror milieu and in a big way with successful cable/paytv programs like Mad Men and Weeds. Now that it has its own channel with TV Guide, shared pay channel with Epix, and Joe Drake / Mandate, its mini-(major)-brand status should start to swing higher. Minus the hard-R films, their independent filmmaker accessibility should start down-rating to PG-13 (i.e., safe branding space) levels. Tyler Perry has made a nice platform with them, if he can open up urban beyond or further with Madea and House of Payne, expect him to join this IP/filmmaker hit list.
- Lucasfilm: George will never sell, as he lives for the independence on Skywalker Ranch and the Presidio offices and fan league; but if he did, it would be a big auction.
- Participant Media and/or National Geographic: Fits with the recent launch of Disneynature, Disney’s nature arm where one assumes they exploit every endangered and non-endangered specie as a stuffed animal, although Participant doesn’t hold any film rights. Expect social good properties to emerge in publishing and event access. With NatGeo, an enormous library, but how much of the content is public domain, in nature (so to speak)?
- Peter Jackson / Wingnut Films + WETA: On a recent visit to Wellington, New Zealand (or “Wellywood”), Jackson’s home base is the for-hire, go-to oasis. As his group is starting to build out IP based on LOTR success and returns, one would think a little more of Jackson’s IP independence could be secured.
- Jim Cameron / Lightstorm: If Avatar captivates the merchandising will validate the release, and Cameron is usually on the edge of creating great worlds. If you partnered him up on more PG-13 fantastical fair, or a John Lasseter, one can only wonder where it would go.
- Michael Bay / Platinum Dunes + Digital Domain: The Transformers comeback kid has a lot of IP he can blow-up in a good way, plus the digital toolset to handle the tech side.
Neil Gaiman: The graphic novelist beloved by the fanboys for Sandman, Coraline, American Gods, etc. The literary rockstar of sci-fi and fantasy, who if he joined the media circus in a bigger way, could be its second or third coming of Peter Jackson or Jim Cameron.- Seth MacFarlane / Fuzzy Door: Tied to Media Rights Capital in terms of creating for proprietary IP, and of course he has his $100 million deal Fox Broadcasting deal, but his merchandising efforts could blow past the South Park haze if fully realized.
- J.J. Abrams / Bad Robot: Another multiplatform-hyphenate, Abrams is the master of renovating brands. Less fantastical than Burton (below), but beyond his lucrative production deal with Paramount, his efforts in tv and film scream IP expansion.
- Tim Burton / T.B. Productions: Good at embellishing worlds that others have created, he could resurrect the IP of many fallen fantasies, while building up his own IP lot, a la 9, etc., a more artistic Pixar expression, perhaps.
- Hasbro, Mattel, Activision: Expensive and perhaps obvious, but the IP from each of these should be much more multiplatform as part of a larger media company.
Note: With the filmmakers, sure you can get yourself into a studio production/overhead deal, but better to create a multiplatform/IP term deal. All-you-can-eat or -create should be embedded into every multiplatform IP deal.
Call it “plug and play and IP”… Said filmmakers who have created amazing properties might also concentrate building out their legacies, i.e., the bench of creative geniuses who apprentice underneath them imho.
Already quite valuable IP owned by big media:
- Steven Spielberg / Dreamworks SKG (Reliance): With most of the past highest grossing films (Indiana Jones, E.T., Jurassic, etc.) in history, and with IP running through various studios including biggies Viacom and Universal, he should ultimately create his own line of merch.
- Blue Sky Studios: Picked up by 20th Century Fox in 1997, the Ice Age movies make a killing (Ice Age: Dawn of the Dinosaurs worldwide box office: $808 million; plus Horton Hears a Who) but aren’t merchandised heavily enough imho.
- Guillermo Del Toro: Recent Disney deal – Disney Double Dare You. Let’s see how deep Guillermo’s creative bench is, but we bet he creates a great PG/PG-13, light horror slate for Disney and gets them into a parent-friendly (and merch savvy), fantasy/horror state.
- Oprah Winfrey: The “O,” and in big league play with Discovery re her new OWN network. She’s created a legacy of new talk/strip show talent: Dr. Oz, Rachael Ray, Dr. Phil, (Tyler Perry), etc., but how does she create younger fare/viewers and merchandise opportunities? The social good + lifestyle approach may well enhance her IP play.
Background Disney/Marvel Reference:
Bob Iger on CNBC: “We’d like love to attract more boys, and we think Marvel’s skew is more in boys’ direction. Although there’s a universal appeal, we think, to a lot of their characters and a lot of their story. Just look at Spider-Man and Iron Man films. This is a great fit. But we obviously know Disney has a lot of products that are more girl-skewed than boy. And we’d like the opportunity to go after boys more aggressively.”
“Marvel Super Hero Island at Universal’s Islands of Adventure and the Marvel characters
5 Picture distribution deal with Paramount: Iron Man 2, Thor, Captain America, Avengers, and Iron Man 3
3 additional Spider-Man franchise movies in development with Sony
The boldest Big Media CEO with an acquisition that “highlights Disney’s strategic focus on quality branded content, technological innovation and international expansion to build long-term shareholder value”. Now the question is whether the other moguls can keep up with him, especially Time Warner CEO Jeff Bewkes who’s sitting on a pile of cash after the spinoff of Time Warner Cable and needs to start making acquisitions and adding value to the company instead of just buying back the company stock.
via Nikki Finke’s Deadline Hollywood Daily.
Movies: According to Box Office Mojo, comic-book adaptations make an average lifetime gross of around $96.8 million.
Publishing: In 2008, Marvel controlled 41% of the dollar share of comics sold at independent comic-book stores, and its net sales from publishing, including advertising, came to $125.4 million, according to its annual report. Also, “motion comics” – animated online, via ipod, etc.
Licensing: Popular characters can appear on anything from statuettes to bedding, and retail sales of products featuring entertainment characters came to about $9.88 billion in 2008, according to Ira Mayer, president and publisher of The Licensing Letter. He estimates Disney controls 35% to 40% of the market and believes any one character can generate up to $1 billion in a given year. Marvel’s net sales from licensing came to about $292.8 million in 2008, according to the company’s annual report.
Television: According to TNS Media Intelligence, “Smallville” earned $65 million in ad revenue in 2008.
Theme Parks: Disney generated about $11.5 billion in 2008 revenue at its parks and resorts, according to the company’s 2008 annual report.
Video Games: icensed Marvel games have grossed nearly $1.3 billion since 1995, and are the fourth-highest-grossing non-video game license in the industry (following the NFL, NBA, and Star Wars). In total, Superhero licenses have grossed over $1.5 billion since 1995. U.S. computer and video-game-software sales grew 22.9% in 2008 to $11.7 billion, according to the Entertainment Software Association — more than quadrupling industry software sales since 1996.
via Media News: Disney’s New Superhuman Powers – Advertising Age – MediaWorks.
“This transaction combines Marvel’s strong global brand and world-renowned library of characters including Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor with Disney’s creative skills, unparalleled global portfolio of entertainment properties, and a business structure that maximizes the value of creative properties across multiple platforms and territories,” said Robert A. Iger.
“We believe that adding Marvel to Disney’s unique portfolio of brands provides significant opportunities for long-term growth and value creation,” Iger said.
“Disney is the perfect home for Marvel’s fantastic library of characters given its proven ability to expand content creation and licensing businesses,” said Ike Perlmutter, Marvel’s Chief Executive Officer. “This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney’s tremendous global organization and infrastructure around the world.”
News Corp.’s Twentieth Century Fox has rights in perpetuity to make movies based on the X-Men team and individual characters, Fantastic Four and Daredevil. There have been three hit “X-Men” movies, as well as this past May’s spinoff “Wolverine.” Movies based on characters Deadpool and Magneto are in development.
The two “Fantastic Four” movies were solid hits as well, selling $330.6 million and $289 million worth of tickets worldwide, respectively. “Daredevil” (2003) took in $179.2 million and was something of a disappointment, while 2005 spinoff “Elektra” was a flop, grossing just $56.7 million.