Marvel the licensing juggernaut

20^th May 2019

The editorial unit

The editorial unit

20 May 2019

When Disney acquired Marvel for $4billion back in 2009, some in the industry questioned whether it represented value for money. Nine years on and with Marvel representing over half of Disney’s $7 billion annual box office revenue last year, few would argue that it hasn’t worked out

For the American entertainment behemoth, but it’s merchandise where the acquisition has really paid dividends.

Disney is renowned for eking out every penny for each of its franchises and much of that is done via its licensing deals. Disney clearly saw an opportunity to add value to its purchase by leveraging its existing relationships with brands that successfully marketed many of their products. They already had licensing agreements for anything from stuffed animals to couture jewellery, so ramping up this side of the business was a logical next step.

The appeal of Marvel is the demographic of people interested in the superheroes that are portrayed on the big screen. Whereas Disney characters are almost exclusively aimed at children and teenagers, Marvel films are aimed at an older audience. Not only does this prevent cannibalisation of existing markets, it allowed them to license the brands in other markets that Disney traditionally steered well clear of. One such area is the licensing of the Marvel brand for a range of games, although the company has more recently stated that it is to phase these deals out in favour of more family-friendly policies.

Other projects are moving forward apace though, with a recent tie up with fortnite said to represent a new wave of commercial tie-ups between games and the big screen. Marvel characters are perfect in this respect. Who doesn’t want to play in a battle arena as their favourite superhero?

Whilst Disney has been on an acquisition spree in recent years, what it has been adept at doing, is adding value via its extensive business network and contacts. This has led to a vast increase in both revenue and profits, a trait that looks set to continue as it bids to become the largest entertainment company in the world. Licensing of products and the creation of themed merchandise is one strategy that they seem to have gotten spot-on looks set to continue for years to come.

The editorial unit