Marvel's Smart Financing, Content Development Strategies Paying Off

5/5 - "The Superhero business is booming. Marvel Entertainments first self produced movie, Iron Man, dominated the weekend box office earning an estimated $201m in global receipts in its debut. At the same time, on Wall Street, the company didn’t fare badly either. Marvel posted better a better than expected quarter and raised 2008 guidance. These numbers are only a small part of a bigger story."

"On the Street, Marvel reported net income of $45.2m or 58 cents a share. That result beat adjusted analyst expectations of 45 cents a share on revenues of $113.5m. The company also raised sales outlook for the rest of 2008. The lower end of the projected net sales range is now set $370m, up from $360m. Income is forecast in a range of $1.35 to $1.55 a share, up from a range of $1.30 to $1.50."

"The first step in the reinvention was animation. Rather than relying fully on licensing income, Marvel Studios took all creative development and design responsibilities on titles to built around Marvel characters. They contracted out animation duties to third parties and the releases were issued Direct to DVD.

The second part of the plan was the key: film finance and feature production. Rather than licensing characters to the studios and taking a production credit, Marvel would build a true studio of their own. That would allow them to control development, set release schedules, and more importantly, give them the lion’s share of all non-theatrical revenue (DVD sales and rentals, merchandise and toy sales, video games, and TV licensing). The deal also insures Marvel has the films in their own library – a vault from which future revenue streams will come back to them, rather than enriching some other studio."

"Chairman David Maisel told the New York Times more than a year ago: there “[hasn’t] been a new studio making $100 million movies since DreamWorks,” he said. “We’re going Hollywood, but in a smart way.”

That seems, so far, to be accurate."