Despite a sustained recovery from dramatic pandemic declines and robust growth opportunities, Disney (DIS +2.03%) stock remains down 26% this year. It's still battling through the streaming wars as well as the rising costs, global economic challenges, and pessimism that are affecting the stock market.
And, though some may not have realized, there are many reasons to be hopeful about the future.
The highest-grossing film studio in the world
The name Disney may conjure up visions of Mickey Mouse and Disney princesses, but the House of Mouse owns several top film production studios and some of the most-loved movie franchises, such as Star Wars. It acquired Marvel Studios in 2009 for $4 billion, which was considered a huge sum at that time. But since then, Marvel has been the top-grossing film studio in the world, with more than $26 billion in sales. Its 2022 hit Doctor Strange in the Multiverse of Madness has grossed nearly $1 billion at the box office just by itself.
NYSE: DIS
Key Data Points
Marvel content across channels is known as the Marvel Cinematic Universe, or MCU. The studio has released 29 movies since the MCU began in 2008, right before the Disney acquisition. It released a second summer hit, Thor: Love and Thunder, which has taken in about $750 million in worldwide ticket sales. Both of these films are Disney's only movies in the top 10 highest-grossing films this year.
To say Marvel lifts its share of Disney's weight is an understatement.
Milking Marvel for all it is worth
Management is clearly aware of what Marvel does for Disney as a whole, and it's creating a large slate of content to feed into fandom. Aside from its films, Disney produces series based on Marvel characters to stream on Disney+. This has the obvious effect of pleasing fans and keeping them active and engaged. But there's even more.
Disney CEO Bob Chapek said, "We have seen each new Disney+ original Marvel series attract incremental viewership and new subscribers that hadn't previously engaged with Marvel content on the service." He noted that these new viewers then go on to more fully engage with Marvel content across channels and through products, parks, and games, adding more sales into Disney's pockets.
In light of that, releasing Marvel content onto Disney+ has much more benefit than hooking in Marvel viewers as subscribers. It cycles back to increased ticket sales for future films and other revenue. In this way, Disney has a distinct edge over similar streaming services. Between all of the various parts of its whole, it can make so much more money out of each subscriber.
Much more to come
Last week was a busy one for Disney, with both Disney+ day and D23, Disney's live expo with performances and news about everything taking place in the Disney empire. The company included updates about many Marvel projects, and there's a huge amount of content the studio is churning out to keep the wheel turning. This includes one more theater release in 2022, Black Panther: Wakanda Forever, set to debut in November. It has four films slated for release in 2023, three in 2024, and two already planned for 2025. All of these films are either sequels of previously successful films or prominently feature known characters from the MCU.
Getting back to how streaming plays into this, it also has another series launching in October on Disney+, as well as a one-off special. Then it has five series or specials planned for next year and six more content pieces in production for the future. To round it up, Marvel is also launching an animated feature on the Disney channel.
How does it affect Disney stock?
Disney makes its magic by providing entertainment that its customers know and love, producing content, products, and experiences. These are all powered by the characters and themes dreamed up by its talented pool of creators. These come from all of its studios, but Marvel is a crucial generator of content to drive revenue in all areas. As Disney revenue finally exceeds pre-pandemic levels, and its stock still lags, it's the well-oiled Marvel machine that is playing a big role in its overall growth strategy. As Marvel continues to roll out its content, Disney benefits in sales, and investors should see the stock move higher to reflect the company's sustained market power.
