Disney vs. Time Warner: Clash of the Superheroes

If you've been to the movies lately, you are most likely familiar with the recent surge in superhero blockbusters. The big-budget spectacles easily win over the summer movie crowds and often go on to generate in excess of a billion dollars.

No two companies capture the superhero genre better than Disney (DIS 0.16%) and Time Warner (TWX). These media giants control the most prestigious names in the realm of all things superhero-related: Marvel and DC.

Marvel
Disney acquired Marvel Entertainment in 2009 for approximately $4 billion in cash and stock. At the time, the acquisition represented one of the largest deals ever for Disney, second only to the $8.06 billion acquisition of Pixar in 2006. 

The move gave Disney control of all of Marvel's comic book characters, which numbers well over 5,000 and includes the popular line of Avengers heroes, Captain America, Hulk, Iron Man, and Thor. The first stage of the Avengers saga, dubbed "Phase One," has been met with a great deal of success, including several movies that went on to generate well over $1 billion at the box office.

However, Disney is already well into the second phase of its Avengers story arch and the question that has to be asked is, how many more movies can Disney get out of the popular superhero foursome? After a while, Disney will run the risk of over-saturating the market with too many Avengers-themed movies.

Fortunately, management at Disney is unleashing a new wave of Marvel characters at just the right time. In 2014, Marvel's Guardians of the Galaxy will hit theaters and introduce audiences to a new superhero team. Although the movie is set in the same cinematic universe as Avengers, it will focus on characters that moviegoing audiences have yet to see and therefore should help take some of the pressure off of Marvel's already proven box-office draws.

DC
Time Warner does not have the same problem as its competitor because the company is still in the very early stages of building its new superhero brand. However, Time Warner's DC unit also does not have the same robust character lineup that Disney's Marvel unit has.

Fortunately, DC's biggest superhero names are two of the biggest draws in entertainment, period: Batman and Superman. In addition to these popular names and their suite of complimentary characters like the Joker and Lex Luthor, the DC unit also includes characters like Constantine, Green Lantern, and the Watchmen.

While the incredibly popular (and lucrative) "Dark Knight" trilogy that was directed by Christopher Nolan reached its epic conclusion last year, Time Warner has big plans for Batman going forward. Batman is set to join Superman in the upcoming Batman vs. Superman movie, which is a sequel to Zach Snyder's recent Man of Steel film.

The convergence of popular DC characters in film is most likely leading to a "Justice League" movie, which will no doubt draw strong comparisons to Marvel's Avengers film. Whether the Justice League can topple the Avengers at the box office remains to be seen.

What is becoming increasingly clear is that Time Warner is taking the same approach that Disney employed so successfully with its Marvel films. If Time Warner can pull off the cinematic feat successfully, the company may have a recurring billion-dollar franchise on its hands.

Popularity
Movies on both sides of the superhero battle have already enjoyed success on a massive scale. Here are a few examples of the more popular movies in each division's lineup: 

Numbers courtesy of BoxOfficeMojo.com.

The data above indicates that Marvel has been more successful at the box office than DC has been in recent years. However, both film divisions have several movies that have generated over $1 billion in revenue.

The opportunities
There are several opportunities for growth with both entertainment properties. As was mentioned prior, Disney is already well under way with its "Phase Two" set of Marvel movies, which includes Iron Man 3 and the recently released Thor: The Dark World as well three more soon-to-be-released Marvel Studios movies. Phase Two will culminate with the second "Avengers" movie, set for a 2015 release. 

Also, in the company's most recent conference call , Disney announced that it has plans to develop lesser-known Marvel characters for television via a new deal with Netflix (NFLX -9.09%). The agreement gives Netflix four serialized superhero programs, which will significantly bolster the streaming company's lineup of original content. These series will then culminate with Marvel's The Defenders, a Netflix-exclusive mini series event that will focus on the four cult heroes, Luke Cage, Jessica Jones, Iron Fist and Daredevil, as they assemble into a reimagined dream team. 

All that Time Warner has to do to maintain success with its DC division is to properly advance the story arcs of its two signature characters, Batman and Superman. Fortunately, Disney has already demonstrated how it can be done and management at Time Warner simply needs to hire the proper creative talent to capitalize on this. With Christopher Nolan and Zack Snyder overseeing things at DC for now, Time Warner seems set to duplicate at least some of Disney's success going forward. 

The victor
Unfortunately, there is no clear victor here. Both Disney and Time Warner have ample opportunities to grow their superhero brands in the coming years. While Disney has clearly been more successful so far and is able to launch new projects and spinoffs easier due to a built-in story foundation, Time Warner seems to be just getting started with its superhero saga.

What is clear, however, is that both companies are positioned to capitalize on the seemingly insatiable thirst for superhero content. From this, investors stand to benefit in the long-term.