Forget Saving the Galaxy, Disney Needs Star Wars and Marvel Heroes to Deliver at the Box Office

TL;DR

Disney's movie studios and consumer products segments have significant growth potential and are expected to contribute to filling the gap left by concerns about subscriber losses in their media networks.

Transcript

Sean O’Reilly: Okay so the last business that Disney of course has their hand in, is movie studios, all that. What’s going on there? Will that save them? Vincent Shen: Yeah. So we’ve kind of gone in order. We talked about how their media networks, it’s still growing but people have those concerns about the subscriber losses. Second-biggest segment ... Read More

Key Insights

• 🛩️ Disney's movie studios and consumer products segments offer significant growth opportunities despite making up a smaller portion of the company's revenue.
• 🫱 The release of Star Wars: The Force Awakens is expected to break records and generate substantial revenue.
• 🏛️ The Marvel Cinematic Universe has a built-in fan base that contributes to the success of its movies.
• 👍 Secondary character launches, like Ant Man, have proven to be successful at the box office.
• 💪 Consumer products, especially those related to Star Wars, have shown strong popularity and sales.
• 🍃 The success of these segments can help fill the gap left by concerns about Disney's media networks.
• 🎙️ Disney's investment in movie studios and consumer products is expected to drive future growth.

Questions & Answers

Q: What is the potential growth for Disney's movie studios and consumer products segments?

Despite making up a smaller portion of Disney's revenue, these segments offer significant growth opportunities. Consumer products showed strong income growth in 2015, and the release of Star Wars: The Force Awakens is expected to generate massive ticket sales and boost toy sales.

Q: How do Star Wars movies perform at the box office?

Star Wars movies have historically performed well at the box office, with each film in the Marvel Cinematic Universe generating an average of $750 million in worldwide ticket sales. With 15 Marvel titles set to be released between now and 2019, there is a built-in fan base that gives some certainty to movie performance.

Q: How do secondary character launches, like Ant Man, perform at the box office?

Secondary character launches, such as Ant Man, have also proven to be successful, with over $500 million in box office receipts. This demonstrates the potential for lesser-known characters to draw audiences and generate significant revenue.

Q: How do Disney's movie studios and consumer products segments contribute to filling the gap left by media network concerns?

While these segments make up a smaller portion of Disney's revenue, their growth potential can help offset losses from media networks. The release of multiple Marvel titles, along with the popularity of the Star Wars universe in consumer products, indicates a strong outlook for these segments.

Summary & Key Takeaways

• Disney's movie studios and consumer products segments together account for about 14% and 9% of the company's top line respectively.

• Consumer products saw robust operating income growth of 29% in 2015.

• The release of Star Wars: The Force Awakens is expected to be a huge moneymaker, with record-breaking presale ticket numbers and strong box office predictions.