Disney (DIS) Shows the Way to Success With Franchise Formula

The Walt Disney Company’s DIS Black Panther has once again gone on to prove that the best way to ensure box office success is to take the franchise route. Major studios are fast catching up with the trend and relying on franchise films, as these are attracting more audience than standalone movies.

Of course, Steven Spielberg’s Ready Player One has earned a robust $53.2 million since its opening in theatres on Wednesday, with $41.2 million coming from the three-day Easter weekend. Yet it’s clearly Black Panther that is roaring at the box office — set to become the third-highest grossing movie ever in the United States and Canada.

In fact, Disney’s Star Wars: The Last Jedi was the highest grossing film of 2017, while Sony Pictures Entertainment, a division of Sony Corporation of America’s SNE, Jumanji: Welcome to the Jungle and Marvel Studio’s Guardians of the Galaxy, were the fourth and fifth-highest grossing films, respectively. Needless to say, franchise films are working better and Black Panther with its dream run at the box office reestablishes the fact.

Black Panther on Record-Breaking Race

Ready Player One may have witnessed a great opening weekend, making it Time Warner, Inc.’s TWX Warner Bros.’s, first No. 1 debut this year. But it has taken seven weeks for any film since the release of Black Panther to actually reach there. Lions Gate Entertainment Corp’s LGF psychological thriller Acrimony opened better than expected raking in $17.2 million but is again no match to Black Panther.

It isn’t that Black Panther’s success is a one-off instance for franchise films leading to higher ticket sales. The film has now earned $650.9 million in the domestic box office and $1.273 billion worldwide, accounting for 23% of all ticket sales in the first three months of the year, ending Saturday, according to comScore. And if everything goes the way it is, the film is on track to become the third-highest grossing movie ever in the United States and Canada.

Moreover, Black Panther’s success has had a direct impact on other standalone films such as Twenty-First Century Fox’s FOXA Red Sparrow, and Disney’s own A Wrinkle in Time, which have managed to collect a meager $45.7 million and $83.4 million, respectively.

Franchise Power Rules

The success of franchise films was seen last year too, with Star Wars: The Last Jedi emerging as the highest grossing film. Its total domestic collections are more than $620 million as of Apr 1, 2018, making it the eight-highest grossing film of all time in the United States. Moreover, Jumanji: Welcome to the Jungle,Guardians of the Galaxy and Sony’s Spider-Man: Homecoming, all franchises, took the No. 4, 5 and 6 spots in 2017 with box office collections of $402.8 million, $389.9 million and $334.2 million, respectively.

And when these figures are compared with standalone films such as Fox’s Shape of Water and The Post, and Warner Bros’ Dunkirk, which shared the maximum Oscar nominations and wins among themselves this year, we find meager box office collections of $188 million, $63.5 million and $81.7 million, respectively.

Disney Leads the Race

Over the last few years, a lot of Disney’s success can be credited to the franchises it owns. The production house has time and again banked on its long list of franchises that have helped the company earn hefty box-office revenues. If Black Panther set the cash registers ringing this year, Disney had an enviable set of box-office winners in 2017 with the likes of Star Wars: The Last Jedi, Thor: Ragnarok, and Pirates of the Caribbean: Dead Men Tell No Tales all doing exceeding well.

Moreover, from animation characters to the likes of Indiana Jones, Marvel Cinematic Universe characters and High School Musical, the company owns a wide array of franchises that have always helped it rake in healthy revenues. Among these, Marvel Comics characters such as Black Panther, Thor, Iron Man and Captain America are prized properties of Disney. In 2018, the film studio has an enviable line up of releases that include films like Ant-Man and the Wasp and Solo: A Star Wars Story.

That said, other studios are also banking on the franchise power. Warner Bros. has franchises like Fantastic Beasts, Lord of the Rings and Matrix, while Universal Pictures, owned by Comcast Corporation CMCSA, has franchises such as Jurassic Park, The Fast and the Furious and The Mummy. However, Disney seems to be way ahead in the race. Currently, Disney has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here .

In fact, ticket sales for films released by Disney Buena Vista studio accounts for a market share of more 31% of all ticket sales for 2018. And this again was driven by franchise films Black Panther, which brought in domestic sales of $631 million, and Star Wars: The Last Jedi that sold $103 million tickets in 2018. On the other hand, Columbia has a 14% market share of ticket sales this year, followed by 20th Century Fox with 13%. Comcast and Universal have 9% each and Warner has 9%.

In Conclusion

While it remains to be seen how Ready Player One performs in the coming weeks and if it can help Warner Bros. increase its market share of ticket sales, Black Panther continues to set new box office records. Interestingly, Ready Player One is Spielberg’s biggest opening since Indiana Jones and the Kingdom of the Crystal Skull, yet again a franchise film, which debuted in 2008 to $100.1 million. It now needs to be seen how Ready Player One performs over the next few weeks till Disney’s next big superhero film Avengers: Infinity War releases on Apr 27. 

Disney with the maximum number of franchises is leading the race with the power of the Marvel Comics characters it owns. And understandably, once these franchises come to an end, the studio is expected to fall back on its old franchises.

It goes without saying that, Black Panther’s success is only an attestation to popularity and command of franchise films at the box office. And all major film studios will keep relying on the franchise power to scoop up maximum revenues. Standalone films, which till a few years ago had their own appeal, definitely are losing out.

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