“You may not have noticed it but Disney has just reinvented the film and entertainment industry. Industry records that have stood for decades are falling like dominos, furthermore you’re already probably hooked. In this article I describe Disney’s new, simple but revolutionary business model and expose the marketing premise behind it, that over the next decade will help Disney bring in over $300 Billion in net new revenues. Once you understand the model, try applying it to your own industry. Education, retail, sport and tourism? They’re all game.”
The world of entertainment changed forever in 2010 and there’s no going back – not that you, or your kids would want to. As the orange incandescence of explosions from your state of the art 60 inch 4K TV continue to light up your living room so brightly that your neighbours think your house is on fire I doubt you even noticed Disney’s new revolution. The revolution was subtle and easy to miss but is as obvious as a punch in the face when you notice it.
Sequels have been the mainstay of the blockbuster since James Bond, Jaws and Star Wars first burst onto cinema screens in the 60’s, 70’s and 80’s. You know the formula. A studio releases a film that becomes a box office hit and then two to three years later they follow it up with a sequel. Repeat.
Excluding merchandise and adjusting for inflation, in twenty two years Jaws grossed $1.8 Billion. In twenty seven years Star Wars has grossed $9 Billion. In forty one years James Bond has grossed $14.4 Billion. That’s a lot of Hans Solos, Wookies and Aston Martins.
Break the formula
All of these franchises have one thing in common; they follow the same old formula. However, in 2009 Disney bought Marvel Entertainment for $4 billion and then swiftly scooped up Lucas Film and the Star Wars franchise for $4.05 billion in 2012. At first the acquisitions made sense, they’d help expand Disney’s audience and boost revenues but that wasn’t the genius - that first appeared in 2012.
It took Star Wars nearly three decades to gross $9 billion at the box office but it took Disney’s Avengers franchise just two years to gross over $5 billion, and everything indicates that their earnings are accelerating fast. The type of fast that leaves the Millennium Falcon in the interstellar dust looking for a jump start.
Buying the Marvel franchise gave Disney the rights to a multitude of characters, but the real stroke of genius came when they used them to underpin a new business model. If Disney can bust box office records in two years with a franchise that had up until then been tripping along, then imagine what they can do with Star Wars.
Stories as a tapestry
In the past a sequel followed a logical format. Studios took a single central character, for example Batman, James Bond, Jaws, or theme, like Aliens, Monsters Inc, and X-Men, then told the story along a linear timeline. Occasionally, such as Batman Begins in 2005 and Monsters U in 2013, the films would skip backwards and forwards to different points in the story. This type of staid storytelling is endemic within the entertainment industry, whether it’s books written by Tom Clancy or Clive Cussler or TV series such as The 100, but in 2010 Disney crafted a new formula and their returns have been sky rocketing.
Our life stories are a tapestry - created by innumerable interactions with innumerable other people and objects, each of which helps to weave a new story and create a new reality. But just as our own stories are influenced by others, so we too influence and become a part of other peoples stories. It’s this tapestry, and the emotions that go with them, that Disney is tapping into with great effect. Disney has discovered that every screen choreographed interaction is an opportunity to bring a new character out of the shadows and into their own spotlight. An opportunity to create a new storyline, a new spin off, a new blockbuster.
Traditionally studios would expose a character, faults and all, then develop the spin offs as distinctly separate franchises. But now every few years or so Disney are reuniting these new characters, and merging themes to create legendary Epics. Epics like the Avengers that ignite your imagination, that help you buy into a cause, a war, a new type of franchise. If you miss one of the individual spin offs it makes it harder to understand the context behind the epics, dampening your experience of them.
Consequently, whether you see them at the box office or watch them when they appear on Netflix, eventually you catch up and create your own mission to watch every spin off - even if they involve B or C list characters that you don’t care that much about. Ant Man anyone? That’s the power of this new model. Not only does it entice you to watch more and spend more but at some point you’ll invariably find your children pulling you to the nearest merchandising aisle. However, don’t think it’s enough to just buy all of Captain America’s replicas and the cool gadgets, he needs to team up with Iron Man and the Incredible Hulk. And Spiderman. And Thor. After all moms and dads you can’t have an Epic Battle with just one character. Then there’s the proliferation of new digital content on the App Stores. Lock the doors, hide your wallets and unplug your tablets.
Disney has shown that their new business model works and now they’re repeating the format with Star Wars – worker robots and rebels with attitude? Those will be the next new series on Disney XD but why stop there when you’ve got other franchises like Toy Story, Monsters Inc and Pirates of the Caribbean crying out for attention. Even Disney’s Sofia the First is getting in on the act with Crackle Sofia’s pet Dragon getting the treatment - I have two young children and it happens to be on the TV all the time…
When you begin to look for Disney’s new entertainment model you suddenly start seeing it everywhere.
For years studios have relied on individual sequels to drive big numbers at the box office but when sequels begin to lose their mass market appeal, the studios have to pin all their hopes on the next blockbuster character. By developing a new franchise model where storylines and A, B and C list characters interact with each other, Disney has broken the mould and now it’s not too far away from breaking every franchise record on, and off our blue and green planet.
Here’s a question to stir things up – what do you think would happen if Disney applied this new business model to their ESPN franchises? Mickey Mouse is sitting behind his desk smiling…
About the author: Recognised in 2013 by the public as one of Europe’s leading emerging technology and disruptive innovation experts Matthew Griffin works with Her Majesty's Government and Private Sector organisations around the world to help them foresee the opportunities and threats that emerging technologies and trends will have on business, culture and society at large. Twitter me @mgriffin_uk
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