Franchises: Cash cows or stray dogs for the entertainment industry?
Par Camille Farah
“Everything we do is about brands and franchises”, Disney’s CFO Jay Rasulo said in 2015[1], summarizing the American major’s strategy. However, in the wake of Solo’s failure in movie theatres worldwide – analysts expect the Star Wars spin-off to lose 50 to 80 million dollars[2], one may wonder why Disney, and other major movie or video game studios, stick to the franchise strategy.
The franchise that lays the golden sequels, prequels, spin-offs, and reboots
Numbers speak for themselves: among the top 10 box offices of all time, eight movies are part of a franchise[3], and two of those are Marvel movies still screening in theatres around the world. Only nine movies out of the top 50 box offices are not franchise-related – seven if you consider Avatar as the first instalment of a franchise and Titanic as a reboot. Still, if the offer in franchise titles is so abundant, it is because the demand keeps asking for more. Viewers are now used to waiting for a following episode and keeping up with longer storylines, probably in part thanks to the wide success of series. But even more so, audiences look for more complex and intricate plots and enjoy watching the characters they became so fond of grow and evolve along the way.
To achieve complexity and character growth, studios need solid franchises, which should be both flexible and bankable, thus allowing not only numerous titles under the same trademark to be released, but also to bring in large revenues every single time. Nonetheless, building new intellectual properties (IPs) is not easy. Disney’s John Carter or The Lone Ranger are considered iconic examples among the industry of failed attempts to do so. That is why studios do not let franchises go so easily: Sony rebooted Spider-Man for the third time rather than selling it to Disney, NBCUniversal tries to revive memorable IPs such as Jurassic World or Halloween[4], and Fox refines its target audience with titles like Deadpool or Logan aimed at older viewers. In addition, leveraging former IPs diffuse the risk of creating new ones, especially in the video game industry. It takes a lot of resources to come up with a brand new franchise, as Naughty Dog or Rockstar Games did with The Last of Us or Red Dead Redemption respectively, because everything has to be built from scratch while still offering at the end a complete new experience to the players. Franchises tend to reassure creators, investors, and consumers of easy success, but in reality that is not always the case.
Franchise or the Poisoned Chalice
Yet, in the last two years or so, many franchise movies did not perform so well. 2016 Independence Day, Ice Age, Alice in Wonderland, The Huntsman[5], but also 2017 Pirates of the Caribbean or Transformers are some examples among many[6]. In particular, NBCUniversal’s Mummy was very disappointing because it was supposed to launch their Dark Universe franchise, revolving around the studio’s big monster assets such as Dracula or Frankenstein, but after this box office bomb, the whole franchise may be compromised.
However, because majors tend to focus so much on IPs and franchises, they often forget what moviegoers really want: quality and novelty. Indeed, when both are lacking, the franchise fatigue kicks in. Notably, because the franchise must go on, the audience knows that the main characters will never (really) die. It makes any challenges faced by the heroes trivial because everybody knows that, one way or the other, they will succeed – or come back to life.
Obviously, it is a matter of pace: Hollywood releases simply too many IP movies and because of growing competition from other forms of entertainment or leisure activities, consumers become pickier when it comes to spending time and money. Above all, they now have higher expectations that still need to be heard, hence the current emphasis on over-the-top and direct-to-consumer services so as to be able to gather enough customer data and understand their needs better. That is at least what Disney may be aiming for when acquiring 21st Century Fox and thus gaining control over the streaming platform Hulu, on which their IPs will be distributed, surely exclusively. Actually, IP titles do not necessarily decrease risks, because they are often very expensive to produce, but if they are not innovative enough and do not tell a compelling story, they will not attract audiences.
Franchises are more than meets the eyes
Despite all the challenges that come with IP management, franchises are not just about releasing new movies or video games. As a matter of fact, a strong IP works on any formats, as evidenced by the many superheroes TV shows. They either introduce new characters and elements of the universe (Marvel’s Agents of S.H.I.E.L.D. or Jessica Jones), or shine a new light on a well-known story. That is how DC’s Gotham, telling the origins of Batman and the villains he will encounter, presold internationally without any pilot. This is true for video games too, since many franchises have been or will be adapted to the big screen. Ubisoft even created a subsidiary film production company, Ubisoft Motion Pictures, to manage the conversion of their IPs into movies (Assassin’s Creed) or TV shows (Rabbids Invasion).
But even better, IPs can be licensed, and more often than not, licensing begets massive revenues, especially in merchandising. Star Wars’ producer, Gary Kurtz, estimates that the franchise earnt three times more in toys than with the movies[7]. Not only can IPs become any kind of consumer products, but they can also become experiences. Customers, and millennials in particular, are looking more and more into living things rather than buying and consuming them. Location-based experiences such as festivals and conventions, museums and exhibits, but also theme parks[8], can bring life to the franchise universes and offer immersion in their worlds. For instance, Disney will open in 2020 areas dedicated to Marvel in Los Angeles, Paris and Hong Kong Disneylands, while NBCUniversal put together a Jurassic World exhibit (currently located in Paris).
Yet, if people are still excited about the video game convention E3, book tickets in advance for Avengers: Infinity War to make sure to watch it during its opening weekend and are willing to buy consumer products printed with their favourite superheroes’ logos, that is because a well-managed IP will give birth to an international and loyal fan base. Fans will indeed always come back, even if disappointed with an instalment of the franchise – as DC movies have proven, and they will spend on additional contents, side products and experiences. Franchises bring people together within communities, because most franchises also target an international audience.
In the end, if franchise titles do not always meet expectations, the value of an IP is not solely based on a couple of movies or video games, but on everything related to their universes. To make an IP flourish, movie and video game studios should understand their audiences, offer a variety of interactions with the characters they love and, in some cases, know when to adapt their franchise strategy.