What’s next for Disney after Endgame, Star Wars IX?

2019 is set to be a very bittersweet year for the Walt Disney Studios. On the one hand, it is bringing the curtain down on two mega-billion franchises while it has two live action flicks releasing. It also has the release of Spiderman: Far From Home to look forward to, but I don’t think that that counts here. As for the two mega-franchises it is bidding adieu to, I know you have figured out the ones I am talking about. Marvel’s ‘Infinity’ saga for the Avengers and Lucasfilm’s ‘Skywalker’ saga for Star Wars. It may seem like a huge setback for the studio that brought us Mickey Mouse but with in the grand scheme of things, it looks like the force is with the Studio.

The studio’s humble beginnings are a matter of lore and only shine when compared to its current share of $98 billion worth of assets and nearly $60 billion worth revenue in 2018. Let’s just say that AT&T, Time Warner, Netflix and other so called conglomerate do not even come close to them in terms of revenue generation. Apple might, but then Apple is a technology firm that is only now getting into providing its own original video content. And with Disney all set to launch its video streaming service, Disney+, at the end of this year let’s just say we know where all our money will be going next year.

Disney’s biggest asset has not just been their ability to create unique content. One of the core advantages it has often held over the competition is its ability to hedge it bets on the next-big-thing in the entertainment industry. It bought Marvel studios and Lucasfilm at a time when one was starting out and the other was all but looking into the abyss.

So, what next for Disney?

Just like it did before, Disney is now hedging its bets on the live action remakes of our childhood classics. It is all set to release two of our favourite films: Aladdin and Lion King in Summer 2019. Given that its original Avengers franchise is all set to end with the release of Endgame on April 26, it has already had an exhausting year. But it’s slate is still more-or-less full with another Marvel movie releasing later in the year. But after the success of the live action remakes of Cinderella and Beauty and the Beast, it was but natural for the studio to push for more similar movies.

I was hit by a wave of nostalgia when Disney dropped the live action trailers of the Lion King and Aladdin. Though Will Smith as the blue genie did make me gag for a minute, I guess the nostalgia of it all made up for any qualms I had about the casting. The Lion King is being directed by Iron Man, Iron Man II and The Jungle Book director Jon Favreau. Favreau announced that Childish Gambino himself, Donald Glover, was going to voice Simba. And that just made the day of all Glover fans. Aladdin on the other hand is being directed by Lock,Stock and Two Smoking Barrels and Sherlock Holmes director, Guy Ritchie. Now, I know what you are thinking: What was Disney thinking. But, maybe have a little faith people. But the film really won brownie points when it decided to cast actors of middle eastern and asian descent for its lead roles of Aladdin and Princess Jasmine.  

While Aladdin is going to release on May 24, Lion King is going to release on July 19. Aladdin’s release slot was first set aside for Star Wars Episode IX.

The seemingly perpetual growth of Disney

Disney is one of the few movie studios that can be referred to as unicorns. No, not the type that pop every now and then when you are stoned, but the one that had survived and only churned out profit irrespective of the financial setbacks the world around it is facing. The studio, best known for its multifaceted film division, which is one of Hollywood‘s major film studios, is based at the eponymous Walt Disney Studios in Burbank, California. Founded in 1923, it is the fourth-oldest among the major studios. Not only that, it also brings in an annual estimate of $9 billion a year in revenues from its entertainment division alone. And to put that number into perspective, Netflix raised the same amount of debt to finance its new shows division in 2018.

But now it is even getting into a video streaming with Disney+. News of the launch of the streaming had been percolating for quite some time. It was only last week that they officially announced its launch in November 2019 with a price tag of $6.99 per month or $69 annually. Given that it is very competitively priced with Netflix, it will be seen if it can defeat the Netflix juggernaut. With subscriptions and revenue. But Apple is also set to launch its streaming service though it has not yet released its price point. So, that is something else that can muddy the waters.

But given its slate to movies, impending releases and new television shows it is going to launch, the success of Disney+ is all but set in stone. Who would not want a one stop shop for the Avengers to meet Luke Skywalker and Princess Ariel. Or the X-Men to meet Kim Possible.

The Marvel and Lucasfilm acquisition

Now this is where things get really interesting for Disney. It announced a $4.24 billion bid to acquire Marvel Entertainment in August 2009 which essentially included their movie and television production wing, its comic book multiverse, its merchandising wing and its licensing wing. The deal entailed each Marvel shareholder getting $30 and 0.745 Disney shares in exchange for one Marvel share. The deal was finalised on December 31, 2009 and Marvel was officially delisted from the New York Stock Exchange from January 1. It is essential to note here that Marvel had only released the first Iron Man (2008) movie till then which had essentially kicked off the Marvel’s cinematic universe. And Marvel did not have much of a budget then. Robert Downey Jr., the highest paid actor in the world right now, was only paid $500,000 for his first appearance as Iron Man.     

No film franchise has caught the imagination of the entire world like Star Wars has. And no, neither Fast and the Furious counts nor does the Marvel Cinematic Universe. It may seem the case given the time difference between the Star Wars’ actual hype and that of the others, but Star Wars changed pop culture. But it also gave it Jar Jar Binks. So, I can see where the skeptics may disagree with me. But Disney decided to buy this Studio in 2012 when things were not looking so bright for it, or so some market gurus say. Disney bought them for $2.2 billion cash and $1.85 billion in stock. But it was not just their movie production and distribution that they bought. They also bought all of Lucasfilm’s subsidiaries like their merchandising wing and their video game syndication wing. But the distribution of their original six films is with 20th Century Fox.  

What’s the key to their success?

Disney’s meteoric rise to the top of the entertainment food chain is widely studied among marketers and business schools, the world over. Here is why I believe they are at the top.

  1. They have mastered the most successful mantra: Content is King. If you look closely at all the products and characters released by Disney, each of them has a more-or-less perpetual life-cycle that is often squeezed for maximum effort by the studio. It has long ago understood that a good story is the backbone of any successful venture.
  2. Focus on quality: Like most successful businesses on the planet, Disney pays close attention to the quality of the products it is putting out in the market. And it is not shy to pump money to make the products look like a Disney product. They also believe in the Steve Jobs mantra: You have to spend money to make money.

  3. Think big: One gross misconception people have is that Disney is only in the movie-making business. But Disney makes most of its money from Disneyland and merchandising of its products. Also, Disney has a specific vision for its company and its shareholders. So it plans to achieve its vision by rolling up its sleeves and working out the day to day kinks to achieve the final output.


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