How Disney Will Make 'Frozen' a Billion-Dollar Franchise

The movie has become a billion-dollar hit, and now it's poised to become a billion-dollar franchise.

May 14, 2014 at 10:45AM

Frozen has taken in over $1 billion at the box office and Disney (NYSE:DIS) plans to create every possible spinoff possible from the hit movie. 

Disney has been spectacular at turning a hit into more than just a movie. Films like The Lion King have had long lives outside their theatrical releases -- everything from Broadway musicals to theme park attractions and licensed merchandise. Not every Disney film gets this treatment but Frozen, which came out for the 2013 Thanksgiving season, has climbed from hit status to cultural phenomenon. 

The movie had a strong -- but not record-breaking -- $67 million domestic opening weekend ($93 million over the Wednesday-through-Sunday holiday period). It wasn't even the top film that weekend -- The Hunger Games: Catching Fire from Lionsgate (NYSE: LGF) pulled in $110 million, according to Rentrak, which compiles box-office data. But Frozen crossed the line from just another Disney animated success to long-term money machine by simply never going away. Frozen has lingered in theaters. As of last weekend globally it was only $25 million from taking fifth place on the (not adjusted for inflation) all-time box office list from Iron Man 3, according to Box Office Mojo.  

How did Disney make Frozen a phenomenon?

Disney has had trouble marketing its princess movies to boys. Since the failed 2009 release of the movie The Princess and the Frog (which took in $267 million globally, according to Box Office Mojo), Disney has operated with the idea that using the word princess in a film's title limited audience. The company went one step further with its 2010 take on Rapunzel -- calling the movie Tangled to keep the title gender-neutral. That film brought in nearly $600 million globally -- a hit but not a hit on the scale of Frozen.

While it seems that boys would look beyond the title and reject the movie because its lead characters are two princess sisters, that was clearly not the case. On opening weekend, about 43% of the opening-weekend audience for the movie was male, according to exit polls. The first weekend of Tangled drew a crowd that was 39% male.

Had the movie been called Ice Princesses it wouldn't have played as well with boys. Disney was also clever with its marketing. It featured Olaf, a wisecracking snowman, as much as it did the female leads.

"Boys really respond to humor, and we fortunately had an enormous supply of that from Olaf the snowman," Dave Hollis, executive vice president for distribution at Walt Disney Studios, told The New York Times

The first signs it was more than a movie

The biggest Disney musicals that have had staying power are the ones with soundtracks that become ubiquitous. You don't need to have seen Beauty and the Beast to know all the words to Be Our Guest any more than you have to have seen The Little Mermaid or The Lion King to know their signature songs. 

The first sign -- for me at least -- that Frozen was more than another hit along the lines of Tangled was when I realized I could sing most of Let It Go -- the film's signature song as performed by Idina Menzel -- despite never having seen the movie and never having intentionally listened to it. Let It Go not only won the Oscar for Best Original Song, it unofficially became the anthem for tween girls everywhere.  

YouTube has thousands of videos of people performing the songs (along with parodies, foreign language versions, and just about anything else you can imagine). On a personal note, no less than 12 girls are separately performing Let It Go at my son's elementary school talent show.

What's next for Frozen?

Frozen cost Disney roughly around $250 million to make and market globally, according to The Times so the film is clearly already a huge moneymaker. The real money, however, comes from being able to capitalize on the franchise for years to come and Disney is prepared to do just that.

"This is definitely up there in terms of our top, probably, five franchises," said Disney CEO Bob Iger in a conference call last week. "So you can expect us to take full advantage of that over the next at least five years."

FBR Capital Markets broke down Disney's biggest franchises for CNN Money:

  • Mickey Mouse is on top taking in $4 billion in sales a year.
  • The Disney Princesses (Snow White, Cinderella, Ariel, Belle, Jasmine, Mulan, Tiana, etc.) bring in another $4 billion.
  • The Cars and Winnie the Pooh franchises each earn $2 billion a year.
  • Toy Story brings in $1 billion a year.
  • Frozen is expected to bring in $500 million to $1 billion in the next year, according to FBR.

The first place Disney will make some of that money is Broadway, where the movie will be turned into a musical, which will eventually tour the country and earn Disney licensing money as it gets performed in schools. The heroes of the movie -- Elsa and Anna -- will also soon begin appearing at Disney's theme parks. Iger hinted, CNN Money reported, that story books, videos, and interactive games are coming too. Theme park rides and shows have a longer gestation time but if Frozen stays on track expect those at the company's Florida and California theme parks.

Disney deserves credit

Frozen is a huge hit but the movie was not a sure thing when Disney released it. The film has female leads, which have struggled at the box office. Its princesses were less frilly than traditional Disney fare. The movie is also more of a classic fairy tale (it's very loosely based on the Hans Christian Andersen fairy tale The Snow Queen) at a time when the dominant animated films at the box office are generally more modern original stories released by Disney's Pixar brand, and, to  a lesser extent, DreamWorks (NASDAQ: DWA)

Every parent of a child under 10 may be sick of Frozen and Let It Go, but that's not likely to stop them form spending big as Frozen moves from movie to brand. You can already picture the army of Elsas and Annas next Halloween (wearing licensed costumes) along with the plush toys, bed sheets, and everything short of Frozen dinners -- even Disney has a line it won't cross.

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Daniel Kline has no position in any stocks mentioned. He has no plans to see Frozen but is taking his son to Disney World this summer. The Motley Fool recommends DreamWorks Animation and Walt Disney. The Motley Fool owns shares of 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.

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