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Walt Disney (NYSE: DIS ) is always looking for another top-shelf franchise idea. The House of Mouse may just have found one in a story you probably associate with a totally different studio.
The Wizard of Oz is about as classic as a movie can get. If you're into spinning Pink Floyd's Dark Side of the Moon album instead of the film's regular soundtrack, you'll know to start the CD at the MGM lion's third roar.
Sure, Disney's movie-themed theme park in Florida used to be called "MGM Studios," but the Mouse no longer owns the rights to the venerable studio's name. More to the point, rival studio Time Warner (NYSE: TWX ) owns The Wizard of Oz nowadays and will re-release the movie in 3-D this year. The 3-D conversion will first hit theaters and then the DVD and Blu-ray market to commemorate the 1939 film's upcoming 75th anniversary and Warner Bros.' 90th.
But Disney takes the next logical step. L. Frank Baum's classic Oz books have finally entered the public domain, which leaves the door open for anybody to base new material on his world and cast of characters. Disney was built on doing exactly that, if you recall foundational masterpieces such as Snow White and Cinderella, and is not shy about trying it again.
Enter Oz the Great and Powerful, which opened Thursday night with some success. And it's already spawning sequels.
Mickey ears on Dorothy?
The Disney flick collected about $2 billion in Thursday night tickets and midnight screenings. Put that figure next to early takes for other Disney features, and you arrive at a domestic opening weekend between $70 million and $100 million -- firmly in blockbuster territory. I would expect the movie to gross about $300 million at home and another $350 million around the world for a total box-office haul of at least $750 million.
Disney executives can smell the gold already. The studio ordered up a sequel even before the first tentpole had been raised, according to Variety.
So it looks as if Disney's take on Oz is here to stay. Early ticket counts already proved that this movie will be nothing like last year's megaflop John Carter. You won't see much of that Carter character around Disney's cruise ships, theme parks, and lunchboxes. The reimagined Wizard is a different story.
It's also a different visual spin on some very familiar material. Disney can use L. Frank Baum's text all day long, but the original Wizard of Oz movie is still firmly under Warner's copyright umbrella. So the Wicked Witch of the West shows up again, but she's a slightly different color and lacks that familiar mole on her chin. Dorothy's ruby slippers are Warner's property (they're silver in the books), and you won't see the Yellow Brick Road swirling away between the Munchkins -- Warner's design, not Baum's.
You can bet that Time Warner would have sued the celluloid off this movie, given half a chance. The company has a core property to protect, after all.
Raising new tentpoles for fun and profit
The old MGM movie is still a fantastic film, but time has passed it by in many ways. I expect audiences to absorb this fresh take on the well-worn world to create a new canon, without chin moles but including James Franco and Mila Kunis. This is a brand-new franchise for Disney (not counting failed reboot attempts under license, decades ago).
It might not have the Hulk-powered punch of the Marvel portfolio, and it remains to be seen if Oz can stand shoulder to shoulder with Buzz Lightyear's Pixar friends. And you know there's no way to top the Star Wars saga, particularly with core actors such as Harrison Ford and Carrie Fisher coming back to bolster the Disney-produced sequels (and let's hope Disney keeps its prequels in Oz from now on).
But placing third or fourth in a race of that caliber is no small potatoes. Disney will milk this time-honored cash cow for decades to come. Nobody, but nobody, does it better.
It's easy to forget that Walt Disney is more than just the House of Mouse. True, Disney amusement parks around the world hosted more than 121 million guests in 2011. But from its vast catalog of characters to its monster collection of media networks, much of Disney's allure for investors lies in its diversity, and The Motley Fool's new premium research report lays out the case for investing in Disney today. This report includes the key items investors must watch as well as the opportunities and threats the company faces going forward. So don't miss out -- simply click here now to claim your copy today.