Media Index
By Richard Bruce BA, MA, and PhC in Economics

Disney's Five Blockbuster Movie Strategies

Disney has had a lot of success producing blockbusters. In 2016 five of the top five biggest movies measured by worldwide box-office were Disney. At this writing 2017 three of the top five movies by worldwide box-office are from Disney. This success is based on five strategies.

These five strategies are Star Wars, Marvel, Pixar, Disney's non-Pixar animated movies, and live action remakes of past Disney animated movies.

In addition to these five Disney has one blockbuster franchise, Pirates of the Caribbean. Well, it had this franchise when I started writing this, it looks like we may have seen the last of these.

Disney also takes risks trying to create new blockbuster franchises, for example, The BFG and Alice Through the Looking Glass both in 2016, and both of which failed. Furthermore, Disney produces some relatively small budget prestige projects including dramas and nature documentaries.

While a franchise, like Pirates of the Caribbean, can be exploited every few years each of these five strategies is normally used every year, sometimes more than once in the same year. Disney's plan is to produce one Star Wars movie a year. Disney is putting out two or three Marvel movies a year. The other three strategies are usually used once a year, but sometimes twice, or occasionally not at all.

Star Wars

Disney bought Star Wars for about four billion. Their plan is to produce one film based on the Star Wars universe a year, alternating between the episodes of a trilogy, and stand alone stories. After they finish the present trilogy they will presumably launch another multi-movie story, assuming that Star Wars continues to bring in enough money to justify the enormous expense of the movies.

In addition to earning money on the movies, Disney also earns money on television shows, video games, books, comics, toys, costumes, lunch boxes, etc. The money earned on these is huge. Star Wars was valued at three billion before Disney bought it, even though Lucas was not producing new movies. Disney paid a billion dollar premium which they hoped to make up by using their superior marketing skills to sell Star Wars stuff, making profits on new Star Wars movies, and no doubt selling, even more, stuff because made the new movies. I suspect they have already earned back that billion dollar premium.

Marvel

Disney also bought Marvel for about four billion dollars. While they own Marvel comics, video games, toys, costumes, etc., other studios own the movie rights to many Marvel characters, most importantly Fox owns the right to produce X-Men and Fantastic Four movies. Columbia and Disney are working together on Spiderman movies because Columbia owns the right to make Spiderman movies. Marvel/Disney have been putting out two or three Marvel movies a year.

Once again the Marvel movies have been so profitable that they may have paid off any premium that Disney paid over the market value of Marvel before the deal.

Pixar

Disney bought Pixar for about eight billion. Pixar averages about one movie a year. An old rule of thumb was that a movie was profitable if the box-office was twice the production budget. All but one Pixar movie made that standard. The exception was The Good Dinosaur. China did not show it, which is a major reason for this failure.

Pixar's record is very impressive but Blue Sky which produced the Ice Age movies and Illumination Entertainment that produced the Despicable Me movies also have similar records of consistently profitable movies. So it appears that Pixar's success reflects at least in part the success of CGI (Computer Generated Image) cartoons.

Disney Non-Pixar Movies

The non-Pixar movies from Disney have been doing very well since Disney took over Pixar, this is probably because John Lasseter the head of Pixar has also been running Disney's movie animation studio. Pixar, on the other hand, has not been doing as well as it did before, which probably reflects the division of John Lasseter's attention between the two studios.

Live Action Remakes of Disney Animated Movies

The fifth strategy at Disney is to remake their old animated hits as live action movies. These movies are a combination of live action and photo-realistic CGI special effects. The 2017 hit is The Beauty and the Beast. The 2016 hit was The Jungle Book. The 2015 hit was Cinderella. Each year the hit is bigger than the last year, so this looks like Disney's up and coming strategy.

Computer Generated Images, CGI, are Key

Computer generated images are a key to all five strategies. The Pixar and non-Pixar animated movies are all CGI. The Star Wars, and Marvel movies are dependent on computer-generated images for special effects. The remakes of Disney's animated classics are even more dependent on CGI.

People only see a handful of movies a year in theaters, the average is four or five in the United States. Part of the excitement with these blockbuster movies is seeing what the technology is capable of as it improves year by year.

Forty years ago when the original Star Wars movie came out the world was blown away by the special effects. The fate of the Death Star might be used as an apt metaphor for our minds. But that first Star Wars movie was written to be filmed. It was written so the special effects would work.

When Speilberg produced Jurassic Park he had to make dinosaurs, animals that actually existed in the past, work. But of course, none of us have ever seen a real dinosaur, other than birds. The less we know the easier it is for the special effects experts.

With the Marvel movies, they had to bring what we already know from comics and children's cartoons to life. This was more difficult, the more the audience knows the harder it is to fake.

Bringing the animated classics to life with a combination of live action and photo-realistic CGI is perhaps more impressive still.

In the latest Star Wars movie, Rogue One, they may have been going for the ultimate trying to fake Peter Cushing's Grand Moff Tarkin and Carrie Fisher's young Princess Leia. Many have criticized the result, but I and perhaps a lot of the audience, are fascinated by the attempt. If it did not work this time, perhaps in a few years.

CGI allows Disney and Hollywood in general to offer something new. Great drama and comedy have been produced in talking pictures since about 1930, almost ninety years. The movie that relies on good acting and writing must compete with all those decades. The special effects blockbuster and CGI cartoon have less to compete with and an inherent advantage over the movies of even a few years back.

Regular Strategies - A Disney Tradition

I have identified five strategies that allow Disney to regularly produce one or more blockbusters a year, but strategies like this are a long Disney tradition. In the nineties, Disney would put out one major animated film each summer. These blockbusters started in 1989 with The Little Mermaid, which was followed by Beauty and the Beast, Aladin, The Lion King, Pocahontas and others. There was always a romance. Many of these were princess movies, but many were prince movies where the male was the central focus, for example, Aladin, and The Lion King.

The once a year strategy seems to go back to the start of Disney's movie link cartoons with Snow White. There were many skipped years, sometimes several in a row, when Disney animated films were not doing so well. Furthermore, there were many years when there were a couple of films, but one was special, not part of the formula, for example, Fantasia, and Tim Burton's The Nightmare Before Christmas.

In the nineties Disney followed a formula with television animation, releasing a new series every year as part of its Disney Afternoon. So formulas, generally formulas well done, are a Disney tradition.

At this point, they are doing well for Disney movies. The young adult fiction series Harry Potter, The Lord of the Rings, The Hunger Games, Twilight, and others have faded. Many of the old franchises, Disney's Pirates of the Carabian, but also The Transformers, Planet of the Apes, and others are getting more marginal box office and may be fading soon. Disney's strategies are strong now and may represent the future, for a while, then things will change.


Last edited July 12, 2017

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