Disney Buys Marvel: Superheros and Where the Boys Aren't

From Whiskey's Place.
Disney, desperate for growth in entertainment, has made a deal with $4 billion to buy Marvel Entertainment. As detailed by Deadline Hollywood Daily there are many entanglements to the deal, including Marvel's licensing deals with Hasbro (which makes Marvel Comics character based toys), Sony, Fox, and other studios that have extensive rights to make films of characters including the X-Men, Spider-Man, the Fantastic Four, and Ghost Rider. Disney will have to pay considerably more to make those deals go away and gain exclusive control over all of Marvel's characters. Nevertheless, Disney is driven by one single factor: tween girls are not enough. Not enough, anyway, to keep the cash flow going for Disney at a time when cash-strapped parents are thinking twice about $100 Hannah Montana concert tickets, and efforts to push tween stars Demi Lovato and Selena Gomez have flopped. DVD sales are down, dramatically, and piracy, among other factors, threatens to seriously impact Disney's long term cash flow.

Like other studios, Disney also has to combat the decline in DVD sales. Hollywood still makes the bulk of its profits from home-video sales. But that market, which grew more than 15% a year between 2000 and 2004, has begun to wilt. According to Adams Media Research, consumer spending on home video fell 9% last year. It projects home-video sales will fall between 8% and 10% for 2009.Mr. Iger has said DVD sales are in an irreversible decline, but he said Marvel's strong brand profile should offer a measure of protection. "They are not immune from the changes that we're seeing," Mr. Iger said, referring to Marvel, during a conference call with analysts Monday morning. "But they have established a footing that we think is more solid than what you typically see in the nonbranded, noncharacter driven movie."


Disney desperately needs boys (and their parents cash despite Disney CEO Iger's statements in the WSJ link above that they don't) and all efforts to develop anything along those lines internally have flopped. Hence the deal for Marvel. As in my post from last year, "Comic Books Dirty Little Secret: They Don't Make Much Money," if Disney thinks that buying Marvel Comics will give them a sudden insight into what tween and teen boys, along with young men, think and like, they are in for a rude awakening. Sadly, the total clue-lessness of Disney in regards to creating what boys like is indicative of an Entertainment Industry that has become totally dependent on a female audience, to it's detriment. Disney spent considerable money on market research with focus group guru Kelly Pena, the "Kid Whisperer" to figure out what boys liked to develop Disney XD, a channel aimed at boys.

While Disney XD is aimed at boys and their fathers, it is also intended to include girls. “The days of the Honeycomb Hideout, where girls can’t come in, have long passed,” said Rich Ross, president of Disney Channels Worldwide. Disney XD, which took over the struggling Toon Disney channel, has improved its predecessor’s prime-time audience by 27 percent among children 6 to 14, according to Nielsen Media Research. But the bulk of this increase has come from girls. Viewership among boys 6 to 14 is up about 10 percent. Disney's Rich Ross is listed as one of the more powerful openly gay men in Hollywood by After Elton. It is questionable how well he and other execs operating in the very gay friendly and female-oriented Disney empire understand and relate to boys concerns, let alone straight male concerns and desires in entertainment. Disney has been successful in creating girl-friendly series and movies, featuring Selena Gomez and Demi Lovato. But neither Lovato nor Gomez have been able to break out to the degree that Miley Cyrus has, hampered by a down economy and the miscues of Disney expecting a large Hispanic contingent of fans. A critical error given that Hispanics consume Spanish Language media, most of it from Mexico (Telemundo and Univision).

Disney has found that tween girls are not enough, not enough to keep the cash flows Disney is accustomed to, in a down economy and where few successors to the Pop Princess parade of Britney Spears, Christina Aguilera, Hillary Duff, and Miley Cyrus have "hit." Certainly none of Disney's internal measures, including Disney XD have been "boy friendly" and Disney itself has no track record of providing entertainment boys like. Execs seemed puzzled that the Jonas Brothers and "High School the Musical" are not pulling in boy viewers. Hence the deal for Marvel. With characters, situations, and storylines that appeal to boys and young men. Disney certainly needs them, being unable to develop that on its own. But if Disney expects that Marvel executives will be able to provide much-needed expertise on boys, they have another thing coming. Marvel Comics for example in their 2006 10-Q filed with the SEC admits their readership "extends" through the mid thirties. A trip to your local comic book store on New Comic day (Wednesday) will up that by about five years, in your own estimation. Marvel has made forays into online comics, aimed at younger audiences, and not dependent on Diamond Distribution (the sole distributor for the 2,500 comic shops where Marvel's weekly comic books can be purchased). However, those efforts have only netted a few million dollars per year, as stated in their Annual Report filed with the SEC. Note within that report, the 2008 revenues from publishing (Comic Books) amounted to about 19% of revenues.

Marvel's Comic books are written for, edited by, and purchased by, a few men in their late thirties and early forties, who want "hip/trendy" versions of their childhood superheros. Gay themes pop up constantly, as do openly gay superheros, excessive political correctness, and other things that are death to male tween, teen, and young adult popularity. Noticeably, NO comic book character has been allowed to kill, much less punch out, Osama bin Laden, despite Comic Book writer/producer Frank Miller ("Sin City," "300") desire to write such a story. Instead we have Spider-Man teaming up with Obama. To presumably, Hope and Change villains instead of fighting them.

It is true that the deeply assimilated Jews who created comics, from Siegel and Schuster (Superman), to Bob Kane (Captain America) to Stan Lee (Hulk, Fantastic Four) were able to tap into young adolescent boy's fantasies of power, of leadership, of success with girls, and so very well. In ways still remembered anywhere from seventy to forty years ago. But no real new "hit" character has been created at Marvel since the Punisher in 1974, thirty five years ago. While appealing to young men, the Punisher is certainly not a character appropriate or popular with young boys, who prefer more upbeat and colorful characters. And that's it — no new characters since then that are anything but minor.

Disney's problem, assuming it succeeds in buying Marvel, is that Marvel is coasting on the work done decades ago. All of its existing writers and editors, perhaps more skilled than those of the past, are simply incapable of inventing new characters and situations that appeal to young men and boys. Instead they simply recycle through extra doses of political correctness, existing characters and situations. Leaving nothing new and exciting for boys to claim as their own. Which is not surprising, comics are available only in comic book shops, because of exclusive distribution deals with Diamond Distribution. The Comic book shops number only 2,500, and comics can sell for $5 a copy, putting them out of reach of casual purchases by boys. Much of the publishing revenues are now coming from "trade paperbacks" or compilations of various issues that comprise story arcs, such as the Punisher-Daredevil-Nomad cross-over from the 1990's "Dead Man's Hand." (Sean's note, this paragraph is one of the clearest explanations of my problems with the comic book market i've read.)

Disney has among it's entertainment empire a TV network that is very, very female-oriented and likely to remain so, cable channels that are very female oriented, and ESPN. Its challenge is to integrate Marvel Comics characters into it's existing empire in a way that draws boys and young men to its existing cable and broadcast channels. Which as a practical matter means pairing up available characters like Thor, Captain America, Iron Man, and the Punisher with ... the Desperate Housewives, Grey's Anatomy, and Lost. Or "the Wizards of Waverly Place" and "Princess Protection Program." Disney will have to spend billions more to reap money from movies with comic book characters Spider-Man, the Fantastic Four, the X-Men, and Ghost Rider, particularly if the company also wants to integrate Thor, Iron Man, the Hulk, and so on into the mix (which is a fan favorite and proven winner). Part of the charm of the "Marvel Universe" back when it was read by 12 year old boys, was that characters like Daredevil or Captain America or the Punisher or Ghost Rider could pop up into the middle of a fight between Spider-Man and the Kingpin, and change things. The extended social universe of the New York City based writers and editors, who all knew each other, was mirrored in the comic books and the young male fans loved it.

Now, a collection of loosely organized executives, many of whom do not have a lifetime of working together, some of whom are openly gay (and thus removed from the most basic concern of young men — young women), and most of whom have spent lifetimes producing or managing the production of content aimed at women and girls, must integrate very different content aimed at boys. Of course there must be a "Honeycomb Hideout, where girls cannot come in" because boys do not wish contests to find the twirliest princess nor angsty drama nor other things that appeal to girls but turn boys off.

Prediction: the acquisition of Marvel by Disney will be a share-holder value destroying bust, making the already age-skewed Marvel Comics into "girl friendly" territory and thus of no interest whatsoever to young men and boys.