The Walt Disney Company (NYSE:DIS) has been on an absolute roll at the box office lately, and the company has a wealth of blockbuster properties that ensures the hits will keep coming. But as impressive as Disney's box office slate is, a much greater share of its revenues are actually derived from its theme park and resort business. While filmed entertainment accounted for roughly 15% of Disney's top line in the last fiscal year, its parks segment accounted for 31% of sales.
The House of Mouse's theme park business is already healthy, and the company is in the early stages of utilizing some of its biggest box office powerhouses as theme park assets. It's even making a rare move to incorporate a film property it doesn't own into its parks, partnering with 21st Century Fox (NASDAQ:FOXA) to bring one of the most successful films ever into The Magic Kingdom.
These billion-dollar movie franchises will help Disney unlock untapped magic at its theme parks.
If there's one animated property that's hotter than hot right now, that property is definitely Frozen. The film's incredible $1.27 billion gross came somewhat out of the blue, but Disney has been quick to capitalize on the Frozen frenzy. Popular characters like Elsa, Anna, and Olaf made their debut at the Orlando Disney World park last July, and a larger attraction based on the blockbuster hit is coming to Epcot this summer -- and is sure to be a big draw. The cast of the popular film is also set to receive plenty of spotlighting on each of Disney's four cruise ships this summer.
It's difficult to overstate just how popular Frozen is. The film stands as the second-highest grossing franchise opener in history and the fifth-highest grossing of all time, and last quarter saw incredible receptivity to Frozen merchandise propel the company's consumer products segment to 22% growth year over year. Disney has announced a sequel for an unspecified release date, and additional movies in the series are likely.
At more than $2.78 billion internationally, James Cameron's Avatar has grossed more money at the box office than any other film. Disney is partnering with the legendary director and 21st Century Fox to bring the incredible world of Avatar's Pandora to its theme parks. The first Pandora exhibit will be set up in at Disney's Animal Kingdom park. Production at the Orlando location began in early 2014 and was budgeted at roughly $500 million with a target for a 2017 opening. The House of Mouse also has global theme park rights to the Avatar franchise and will almost certainly be making good use of them. Three more film sequels are due, with the first set to bow in 2017, and each new release should propel interest in Disney's Avatar attractions.
Fox is making its own foray into theme parks, with its Twentieth Century Fox World park set to open in 2016 in Malaysia. The park will reportedly open with around 25 rides based on properties like Ice Age and Planet of the Apes. Additional locations could follow, but Fox is unlikely to use the Avatar property since Disney holds the rights. Fox will also be unable to use characters from X-Men and The Simpsons because they are licensed to Comcast's Universal parks.
Disney is hoping to release a new Star Wars film on a yearly basis, kicking off with Star Wars: The Force Awakens this December, and it's also expanding the presence of the legendary sci-fi series in its parks. Visitors can already take part in events like Star Tours and Star Wars Weekends, but Disney CEO Bob Iger has confirmed that the company is looking to significantly increase the presence of Jedi-related attractions.
Rumors have long suggested that large "Star Wars Land" attractions would be built, and Iger's recent description of the plan for Star Wars expansion at parks as "ambitious" -- and confirmation of a long development and building timeline -- would seem to point in that direction. Star Wars has one of the widest and most enthusiastic fan bases of any franchise, and high-quality attractions set in the galaxy far, far away could drive huge traffic to Disney parks.
The Marvel Cinematic Universe
When Disney purchased Marvel for roughly $4 billion in 2009, the company acquired rights to use the comic book publisher's famous characters, but there was a catch. Universal holds the license for Japan and U.S. territories east of the Mississippi, but Disney is free to make use of Marvel's big characters at its California Disneyland park and other locations around the world. Universal's license also doesn't apply to Marvel characters like the cast of Guardians of the Galaxy. Now that previously lesser-known characters like Starlord, Groot, Rocket Raccoon, and others are getting some spotlight, Disney has a way to open attention-grabbing Marvel attractions in territories where Universal has rights to the more established names.
Disney is already expanding its use of Marvel characters, with a major Iron Man ride being built in Hong Kong and set for a 2016 opening. Films in the Marvel Cinematic Universe have grossed more than $7 billion at the box office, and the Marvel merchandise is a strong performer, so there's plenty of incentive for Disney to better utilize the characters at its parks in the near future.