Movie vs. Franchise

The Wall Street Journal had an article — “Sequels Come Fast, Furious as Studios Aim to Cut Risk” — a subject we’ve covered here considerably the last few years, most recently here, noting that there are a record 27 sequels scheduled to be released in the U.S. and Canada in 2011. Much of the rationale does have to do with cutting risk. But there’s another dynamic at work. From the WSJ article:

The studios all are exploring various mixes of a few strategies to address the challenges: cranking out sequels to blockbusters, placing smaller bets elsewhere and experimenting with pay-per-view options for movies at home.

The biggest piece involves “franchises” — big-budget films with the potential to spawn sequels, tie-in merchandise and other sources of revenue. Among their other advantages, sequels don’t require as much marketing to build name recognition.

“We are trying to address what some of the issues are in the industry through franchises,” said Jeff Robinov, president of Time Warner Inc.’s Warner Bros. Pictures Group.

Rich Ross, chairman of Walt Disney Co.’s Disney Studios, sums up the strategy simply: A franchise movie “starts with the human connection to the story and characters, but downstream there are opportunities to own the DVD, see live stage versions, buy apparel, toys, or other licensed products.”

Franchises are not only considered a safer bet, they are also thought to be cash cows. And for good reason. Compare the numbers of Alice in Wonderland and Toy Story 3 in terms of overall revenues:

Both movies grossed $1B at the box office worldwide. But check out those ancillary retail sales:

Alice in Wonderland: $600M.
Toy Story 3: $8.8B.

And that right there sums up why if you write a script that has the potential to become a franchise, you are more likely to get a more receptive read from buyers.

For more of the WSJ article, go here.

HT to Judy Potocki for the link.

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