Marvel Is Taking Over Disney -- and That's a Good Thing

Marvel is suddenly the most important studio in Disney's portfolio, and that creates opportunities to create value for years to come.

Jan 10, 2014 at 4:04PM

When Disney (NYSE:DIS) agreed to pay $4 billion for Marvel in 2009, it was a steep price for a studio with little filmmaking experience. A few years later, the vision for Marvel predicted by Disney CEO Bob Iger is playing out and the studio is becoming the face of Disney.  

When you consider the success Marvel has had over the past few years, it's probably good that Disney is giving it such a prominent role, and it's only going to grow as Marvel's characters develop and new distribution outlets emerge.

Marvel takes over the box office
In the past two years; Marvel has come to dominate the box office for Disney. Iron Man 3 and The Avengers nearly doubled the second- and third-best performing films of the year, and both were tops at the box office overall for the year.

Disney Domestic Box Office

1st Place

2nd Place

3rd Place


Iron Man 3

$409.0 million


$289.4 million

Monsters University

$268.5 million


Marvel's The Avengers

$623.4 million


$237.3 million

Wreck-It Ralph

$189.4 million


Pirates of the Caribbean: On Stranger Tides

$241.1 million

Cars 2

$191.5 million


$181.0 million

Source: Box Office Mojo.

What's important about this box office success is that Disney can translate it to more superhero films and TV shows in the future.

Spinoff season for Marvel
Agents of Shield is the first major Marvel spinoff to the small screen, and it has done well, ranking second behind the ever-popular NCIS on Tuesday nights on ABC, one of Disney's networks. The next spinoff from Marvel's box-office success will come on Netflix, which recently agreed to a deal that will bring series about Daredevil, Jessica Jones, Iron Fist, and Luke Cage to its streaming service.

On the big screen, besides continuing with classic heroes like Thor and Captain America, Marvel is creating new opportunities to develop characters with Guardians of the Galaxy, due out this year. As time goes on, more of these spinoffs will pop up and Disney will find ways to create more value from a world of Marvel characters across a variety of platforms.  

How to build value, Disney style
What makes Marvel a phenomenal investment for Disney is that the characters will live on for years in a variety of ways.

Dis Marvel Image

Marvel merchandise now sits alongside Disney and Pixar goods at Disney stores. 

Not only does Disney own major television networks, in the last fiscal year the company generated more than twice as much revenue and more than five times as much operating income from parks and resorts as it did from studio entertainment. That's where Disney separates itself from the competition.

The key to drawing customers to these theme parks is having rides and characters that are popular. Mickey Mouse is no longer the draw he was when Disney World opened, but Iron Man or the Hulk walking about the park or helming a themed ride creates a new draw.  

Marvel is the future of Disney
Theme parks are where Disney can create long-lasting value for shareholders and it's why the company is so well positioned for the future of media. With strong characters from Marvel, Disney gets not only box-office success but also content to distribute through existing media networks and new streaming sources, as well as at theme parks. No other media company has that kind of cash-generation cycle, and Marvel is becoming the face of all of these businesses.

How Disney wins long-term
One of the reasons Marvel is so important is for the future of media. With cable's reign over consumers coming to an end, there's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it, but that won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends Netflix and Walt Disney. The Motley Fool owns shares of Netflix and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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