Diversification Strategies Case Study

Marvel Comics: Forward Integration into Movie-making

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Abstract:
In April 2006, with a market-share of 43.93 percent, Marvel Comics was the leading publisher of comics, graphic novels and magazines in the US. Yet, it was not the contributions from its publication sector that had helped Marvel Entertainment Inc., to quadruple its profits over three years to $103 million by the end of 2005. It was the licensing of its comic characters for movies that had helped the company which was on the brink of bankruptcy in 1997, to achieve such a success.

Avi Arad, Chief Executive of Marvel Entertainment’s Marvel Studio unit, was to a great extent, responsible for the revival of Marvel’s fortunes. It was under his leadership that the company licensed its characters to make movies. Till 2005, the company only licensed the characters to film studios like Fox and Sony who made the movies and cornered most of the profit. However, in 2006 the company decided to foray into movie making and was planning to set up its own independent film studio. Though Marvel was positive, analysts were skeptical of the company’s move in this direction.

The question is: will it succeed in its new venture?

Pedagogical Objectives:

• To understand the business model of Marvel Comics
• Marvel Comics business strategy of licensing of its comic characters to movies
• Revival strategies of Marvel Comics through Marvel Studio unit.

Keywords : Marvel Entertainment Inc.; Comics; Avi Arad; movies; The Hulk; Spider-Man; bankruptcy; DC Comics; Perelman; characters; licensing; production; Restructuring / Turnaround Strategies Case Study; distribution; marketing; Blade