Upcoming Marvel, Star Wars Movies Should be Focus for Disney

When I was a kid, I loved Walt Disney  (NYSE: DIS  ) for its theme parks and cartoons. As an adult, I love Disney for its robust portfolio of media franchises and resorts. However, one thing has constantly frustrated me about the company -- its inability to learn from the costly mistakes of its film studio business.

Under CEO Bob Iger, who took the top post in 2005, Disney became a film-making giant, acquiring Pixar Studios in 2006, Marvel Entertainment in 2009, and Lucasfilm in 2012. With all of those studios combined under one umbrella, Disney was well-positioned to dominate summer blockbusters for years to come. Yet it still misfired with expensive bombs like Mars Needs Moms, John Carter, and The Lone Ranger.

For every step that Disney takes forward with its hugely profitable Pixar and Marvel films, it takes a step back with poorly planned attempts to launch original franchises. In my opinion, Disney has a habit of overestimating the appeal of its franchises, its actors, and its creative staff. Let's look at two major examples.

Johnny Depp is not the answer to everything
Pirates of the Caribbean, the 2003 film that grossed over $650 million worldwide on a budget of $140 million, was a surprising hit -- considering that it was loosely based on a classic ride at Disneyland. Its success convinced Disney that people loved Johnny Depp, and a franchise was born.

Pirates of the Caribbean. Source: Fanpop.com 

The next two movies in the trilogy in 2006 and 2007 grossed over $2 billion. Although the trilogy reached a definitive conclusion in the third film, Disney produced a fourth film in the franchise, On Stranger Tides, with only a handful of the original cast returning. Although the film received mediocre reviews, it still grossed over $1 billion worldwide on a budget of $250 million.

So deep was Disney's faith in Johnny Depp that it expected his star power to carry The Lone Ranger, a dusty old franchise that many people weren't familiar with, to box-office success. To date, The Lone Ranger has only grossed $245 million worldwide, not enough to cover its production budget of $215 million, plus worldwide marketing costs. An unfamiliarity with the character, poor reviews, and the notion that Depp's Tonto was merely Jack Sparrow in war paint, all contributed to the film's poor box-office performance.

Disney was obviously shocked by The Lone Ranger's failure, pushing the next installment of the Pirates franchise, originally scheduled for a summer 2015 release, back into the summer of 2016 to rethink its budget and script.

Animated directors can't always direct live-action films
Just as Disney put too much faith in Johnny Depp, it also believed that Andrew Stanton [Editor's note: the original version of this article misreported the director], the acclaimed director of Toy Story, could do no wrong. The company believed in Stanton so much that it allowed him to pursue his dream project, a big-screen adaptation of John Carter, a lesser-known science fiction tale from Tarzan author Edgar Rice Burroughs.

John Carter. Source: Cinemasquid.com

Although Stanton had no experience directing live-action films, Disney handed him a production budget of $250 million to make his vision a reality. The result was a box office bomb that only grossed $280 million worldwide -- not nearly enough to cover its global marketing costs.

The problem with John Carter was the same as The Lone Ranger -- it featured an arcane character unfamiliar to today's younger generation and naively expected audiences to flock to witness the big-screen spectacle.

Concentrating on the Marvel Universe, Star Wars, and Pixar instead
Rather than repeatedly trying to launch its own new franchises with dated and obscure characters; Disney should focus on expanding the Marvel Cinematic Universe, continuing the Star Wars series, and maintaining the quality of Pixar films.

The Avengers and Iron Man 3 -- the first two Marvel films wholly produced by Disney -- are only the start of a cinematic empire. Here is a schedule of Disney's upcoming potential blockbusters.

Year

Upcoming Disney Movies

2013

Thor: The Dark World (Marvel)

2014

Captain America: The Winter Soldier (Marvel)

Guardians of the Galaxy (Marvel)

2015

Marvel's The Avengers: Age of Ultron

Ant Man (Marvel)

Star Wars: Episode 7 (Lucasfilm)

Inside Out (Pixar)

The Good Dinosaur (Pixar)

2016

Finding Dory (Pixar)

Unannounced Marvel film

2017

Unannounced Marvel film

Source: Wikipedia.com

This schedule excludes films that have not yet been announced, as well as Spider-Man, X-Men, Wolverine, and Fantastic Four -- which are produced by Sony and 21st Century Fox. Regardless, Disney now has so many hot franchises that it doesn't need to take on risky, top-heavy projects like John Carter or The Lone Ranger.

Building a third pillar of growth
It's important to remember that films only accounted for 14% of Disney's top line last quarter. Its media networks and parks and resorts businesses are far more important, respectively accounting for 46% and 32% of its total revenue.

Although Disney's box office blunders won't sink the company, they should streamline their film studio operations to form a firm third pillar of growth. Diversifying its revenue would be wise, since its media networks are facing increasing competition from Fox Sports 1, and theme park attendance can be weighed down by macro headwinds.

If Disney finally learns from the mistakes of its box office bombs, I believe that there will be bright days ahead. Yet the Disney of the next decade will not be represented by Mickey Mouse or Donald Duck -- rather, they will be led by the Avengers and Jedi Knights.

The battle of the superheroes

The world can't get enough of superheroes. Super powered movies have been some of the highest-grossing films of all time, and as these franchises continue to grow, the numbers are only going to get more impressive. The Motley Fool's new free report "Your Ticket to Cash In on the Superhero Battle of the Century" details what you need to know to profit from your favorite superheroes. Click here to read the full report!


Read/Post Comments (10) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 24, 2013, at 12:42 PM, groundhg1 wrote:

    Wow, is this really an article telling Disney to not be imagnetive or creative in its moving making, but to simply follow the money?

    This is exactly what is wrong with Hollywood, it didn't make money therefore it can't be good.

    I own shares of Disney too, and I care a whole lot more about Mr. Disney's "Keep Moving Forward" than I do Mr. Sun's "Bright Days Ahead".

    You should be ashamed for thinking about dollar signs when it comes to the creative element of the Disney empire.

  • Report this Comment On September 24, 2013, at 1:16 PM, ickabodx wrote:

    John Lasseter didn't direct John Carter. Andrew Stanton did. John Lasseter isn't even a producer in that movie.

    Nice job taking an extra 30 seconds to do some fact checking.

  • Report this Comment On September 24, 2013, at 1:24 PM, cubsblue23 wrote:

    I am getting really tired of Fools (and in these cases that is true in many aspects) posting on Disney when they obviously have no clue. Let's list the upcoming films you left out just through 2014.

    Frozen

    Saving Mr. Banks

    Muppets Most Wanted

    Bears

    Maleficent

    Planes: Fire and Rescue

    Alexander and the Terrible, Horrible, No Good, Very Bad Day

    Big Hero 6

    Tomorrowland

    Into the Woods

    One or two bad movies are not a reason to basically shut down film ops. John Carter is now in an area of profitability due to merchandise, overseas, and DVD/Bluray sales. Lone Ranger may not end up there but the actual loss will not be close.

    Look for some of the above films to be great hits and others to not do so hot but shutting down Disney creativity would kill the company. It's what made them.

  • Report this Comment On September 24, 2013, at 1:28 PM, schuylervj wrote:

    Disney is Disney largely because of their animation, be it CG or hand drawn, to dismiss this in favor of marvel crap is going to prove a very risky decision as there are more animated fans than super hero fans. Disney should have a separate studio for Marvel and keep their main focus on animation which is where the Disney legacy got started. This new direction is very troubling.

  • Report this Comment On September 24, 2013, at 1:49 PM, TMFSunLion wrote:

    Thanks for reading, everyone.

    I don't mean that Disney should stop making other films altogether. I'm simply saying that it shouldn't take $200 million+ risks on arcane franchises without thinking things through, as they did with John Carter and Lone Ranger.

  • Report this Comment On September 24, 2013, at 3:05 PM, pkallday wrote:

    While I agree that Disney should focus attention on newly acquired licensed properties like Star Wars and Marvel, what made Disney great in years gone by was the fact that they were innovative and creative; and this was apart from the notion that something could be turned into a franchise. That idea at the front has stifled the process of doing something original, epic, and novel. When you begin with the idea of creating something that will be classic, that is what leaves room for future and latent potential. Building with the expectation that you have something that will generate future success without the emphasis of a present value, you've already limited your success.

  • Report this Comment On September 24, 2013, at 6:20 PM, slothropT wrote:

    So what you're telling Disney is: Forget the Mouse, the Duck, the Nephews, all the dogs, and give yourself over unto space operas and comic books. Your ideas STINK

  • Report this Comment On September 24, 2013, at 7:13 PM, walleye117 wrote:

    Disney will have another Bomb on their hands with Ant Man. Most people never thought of the comic as a major hero. Most kids never heard of it.

    Disney can't keep rehashing Marvel comics. The have gold on their hands with Mickey Donald and Goofy. But the problem is this thing called "Political Correctness" They don't show Donald getting hit on the head with a hammer, or Mickey making sexual innuendos toward Minnie. Heaven forbid you call Goofy "retarded" or falling in Hell. Those are the things that made Disney famous, and the characters fun to watch. If you watch the most recent cartoons the character has to do stupid things that aren't funny but make you angry, because no one can be that stupid.

  • Report this Comment On September 24, 2013, at 9:47 PM, grievousgeorge wrote:

    Disney needs to let go of Lucasfilm and Marvel RIGHT NOW and come up with better ideas for THEIR OWN MOVIES. It did not create the two franchises and don't deserve their money.

  • Report this Comment On September 25, 2013, at 12:58 AM, Adonis70 wrote:

    You forgot to mention the Marvel/Disney movie to be released, Nov. 17, 2014, Big Hero 6. It is the first animated Marvel film to be released theatrically via Walt Disney Animation Studios: http://www.imdb.com/title/tt2245084/?ref_=sr_1

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2649954, ~/Articles/ArticleHandler.aspx, 9/1/2014 10:09:23 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement