As if the separate success of its original animated features and original live action films weren't enough already, Walt Disney Co. (NYSE:DIS) is now combining the two to tap into another major source of growth -- live action remakes of its previous animated features.
Cinderella has been a major success for the company already. In addition to winning critical acclaim, it has already brought in more than triple its production costs at the box office. In the wake of this success, Disney announced plans to start development of a live action version of Mulan.
Disney's successes in this genre include Maleficent (told from the perspective of the villain from Sleeping Beauty), Alice in Wonderland, and now the recent Cinderella. Next up, Disney is working on live adaptations of Alice in Wonderland: Through the Looking Glass (2016), Jungle Book (2016), Beauty and the Beast (2017), Dumbo, and now Mulan (both still TBD).
A plethora of tried and true ideas...
One of the biggest assets Disney has is its vast and already hugely successful vault of classic films. As one of the first players in the industry, founder Walt Disney started producing mainstream animated features with his company's iconic Snow White and the Seven Dwarves in 1937. Since then, the company has released over 1000 films, drawing in more than $37 billion in total box office revenue.
Mulan was a major animated feature hit in 1998, one that also proved how well a strong female heroine could perform with mainstream audiences, which gave it extra attention and acclaim.
It is also a great choice for Disney to turn into a live adaption. The movie doesn't have so many fantastical elements like grand magic or many animal characters, instead being a basic love and war movie set on the mountains of China -- thus, the story will be easily adaptable to live film. While many of Disney's movies do have those more over-the-top elements, I'm confident Disney will still be able to make those movies successful as live action adaptations, based on how well Alice in Wonderland was made.
...which are much cheaper to produce
Because Disney already has the rights and story lines for these films, they can produce them with a faster turn-around from start to finish, and at lower costs. Consider that Cinderella cost the company around $100 million to produce, compared with about $260 million to make the animated original Tangled.
Not all of Disney's live action remakes will be this cheap, and obviously the more fantastical the story (with more magical elements, elaborate settings, etc), the more expensive the film. Still, these live action remakes look to have a cost-to-box office ratio that is very appealing. Alice in Wonderland (originally based on the book by Lewis Carroll, but adapted by Disney as an animated feature in 1951) and Maleficent each cost about $150 million, while these live action adaptations to date have grossed about $1 billion and $750 million, respectively.
One more reason to keep loving Disney
These live action movies seem to be a hit with a wide range of audiences, especially among adults nostalgic for the original films of yester-year but with an appreciation for the more adult remakes. But don't think that Disney is using these remakes because it is out of original ideas. The company's upcoming original animated and live action films, like Inside out (June), and Tomorrowland (May) will prove it has more new concepts in the tank.
Disney has been able to constantly reinvent and add to its revenue streams, which now consist of so much more than just original animated films. The company's media networks segment and theme park segment are also doing incredibly well, each driving their own large return. Furthermore, Disney's merchandising arm is thriving, due in part to the success of these remade films. Altogether, the trend toward more live action remakes complementing Disney's already well-performing movie segment is just one more reason to keep loving this company for the long term.
Bradley Seth McNew owns shares of Walt Disney. The Motley Fool recommends 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.