- Hollywood studios are shifting their biggest franchises to streaming TV.
- Netflix is also rethinking its franchises and recently introduced new divisions to help its effort.
- Analysts say it could have major implications for the theater and movie business.
- Visit the Business section of Insider for more stories.
The biggest media companies are rethinking how they approach franchise building.
The coronavirus pandemic has accelerated legacy media’s push into streaming and as Disney, WarnerMedia, and more look to build their own direct-to-consumer platforms while movie theaters struggle, they’ve begun to tap into their libraries of intellectual property.
The ramifications will be felt throughout the entertainment business long after the pandemic, as blockbuster franchises increasingly become cross-platform affairs.
“There’s a trend of world building and expanding IPs into something that’s cross platform,” said Shawn Robbins, the chief analyst at Box Office Pro. “It will be a major advantage for both [theatrical and streaming].”
He added: “We’re in the midst of ‘peak streaming’ right now, but the landscape will shift yet again when a fully operational [theatrical] market and recovering economy are in play.”
But not everyone is convinced that theaters will still be a major driver long term.
“Looking at the next five to 10 years, it’s bad for theaters,” said Jeff Bock, the senior media analyst at Exhibitor Relations. “Theaters are not going to be the first choice. Studios will see if they can stretch something into a series instead of a movie trilogy.”
Netflix, which doesn’t have Disney’s rich library of IP to draw on, has also been rethinking its approach to franchises. Last year, it introduced new teams dedicated to event/spectacle and franchise TV shows.
“The thing that many studios are able to do is create great franchises,” Reed Hastings, the Netflix co-CEO, told The Hollywood Reporter in September. “We’re making great progress on that with ‘Stranger Things’ and other properties, but compared to ‘Harry Potter’ and ‘Star Wars,’ we’ve got a long way to go.”
Disney and WarnerMedia are ahead of the curve
The most notable example of this shift is Disney Plus’ “Star Wars” live-action series, “The Mandalorian.” While it premiered in November 2019 before the coronavirus had spread widely, its success was a precursor for Disney Plus content over the next few years.
At its investor day conference in December, Disney announced plans for 10 “Star Wars” and 10 Marvel TV shows exclusive to Disney Plus. While there’s plenty of Marvel movies in the works, Disney announced just “Star Wars” feature: “Rogue Squadron,” directed by the “Wonder Woman” filmmaker Patty Jenkins,” to be released in 2023.
“Disney is cognizant that the feature films need a break after some didn’t meet expectations on some level, whether with critics or financially,” Robbins said.
Disney is also looking to snag content based on books and podcasts with a new division called the creative acquisitions department, which will identify new IP for its TV networks and streaming platforms.
Over at WarnerMedia’s HBO Max, the company is planning multiple DC movie spinoffs. And both Variety and The Hollywood Reporter reported last month that a “Harry Potter” series was in early development at HBO Max (Warner Bros. and Max denied the reports in a statement).
Max has had a slower start than Disney Plus, which had nearly 87 million subscribers worldwide as of December, but is showing signs of growth with more than 17 million activations, up from 12 million in early December. High-profile, big-budget originals are could boost Max and give it a competitive edge.
Disney and WarnerMedia aren’t the only legacy media companies building their streaming components. NBCUniversal’s Peacock launched in July and ViacomCBS’ Paramount Plus debuts in March.
But Bock said that Disney and WarnerMedia are ahead of the curve with franchise building via streaming.
“Netflix took the rug out from under studios because it realized how important content is,” Bock said. “Disney Plus realized this and Max is making the same play … other studios are waiting in line.”
Netflix is building bigger franchises
Companies like Disney and WarnerMedia can dip into their catalog of properties to build out franchises, but Netflix is starting from scratch.
To help build its own franchises, the company recently introduced two new teams: the franchise-TV division led by Netflix’s VP of international originals Kelly Luegenbiehl and the event/spectacle-TV division led by VP of original drama series Peter Friedlander.
According to a person familiar with Netflix’s strategy, the franchise division focuses on properties that could inspire spinoffs like “The Witcher.” For the event division, think of more contained stuff, like “The Queen’s Gambit” or the upcoming “Three-Body Problem,” from the “Game of Thrones” showrunners David Benioff and D.B. Weiss.
The streaming giant also has its sights on video-game IP, with shows in the works based on popular game franchises like “Resident Evil,” “Tomb Raider,” and “Assassin’s Creed.” Video games are the third biggest category for upcoming Netflix TV adaptations following books and comics, according to the research firm Ampere Analysis. But as Netflix continues to explore untapped properties, that could grow.
“As operators search for fresh IP, it is commercially astute to examine the games sector where a huge amount of time is being spent by key demographics,” said Piers Harding-Rolls, Ampere Analysis’ research director for games. “Using that brand awareness to draw in new audiences or to engage existing subscribers means that games IP is increasingly considered a viable area to develop.”
Netflix isn’t the only streaming giant expanding its IP search right now.
Amazon is building a collection of genre properties like “The Boys” and “The Expanse.” Soon it will release a “Lord of the Rings” TV series, stepping into a universe that Warner Bros., a traditional Hollywood studio, has already tackled on the big screen. Amazon paid $250 million for the rights, according to The Hollywood Reporter.
The surplus of content coming to streaming could have major implications for Hollywood and the theatrical market as audiences get their fix of fan-favorite franchises at home.
Robbins, the Box Office Pro chief analyst, thinks this would benefit both theaters and streaming services, while Bock thinks it’s worrisome for theaters as consumers increasingly want the choice to stay home to watch. At any rate, the pandemic has accelerated many of these shifts.
“There’s a demand for this content like never before,” Bock said.
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