Marvel Enterprises

Marvel Enterprises owns one of the oldest and most recognizable collections of superhero characters in the entertainment industry. Its proprietary library includes Spider-Man, X-Men, The Hulk, Blade, Daredevil, Elecktra, Iron Man, The Fantastic Four, Captain America, Ghost Rider, and The Avengers. With over 4,700 characters, Spider-Man is arguably Marvel's most popular character. Spider-Man has the widest demographic appeal of any of Marvel superheroes. Historically, Marvel's main strategy was to focus on activities that required minimal capital investment, such as licensing deals for a wide range of other products, ranging from toys to video games, apparel party items, and food.

Marvel Enterprises was now faced with deciding how to use its library of characters. Should Marvel continue to capitalize on the strength of a limited set of prominent characters, primarily Spider-Man? Or should Marvel decide to shift focus to a larger set of lesser-known characters that might have the potential of becoming blockbuster characters but were largely unknown to the wider public?

Marvel should focus on managing the library of characters to foster long-term value. While Marvel has had a history of success of Spider-Man and Spider-Man merchandise licensing, there are a number of additional Marvel characters which are relatively untapped sources of profit. There are various other media outlets for Marvel comic book characters exposure, primarily movies. A new movie release can offer $30 and $80 million worth of free advertising for Marvel. Movies are a billion dollar industry. Marvel should focus on branding their lesser known characters in to movies, and then there will be a downstream ripple effect on their licensing products. A successful selling Spider-Man movie leads to selling Spider-Man comic books, video games, action figures, or a Spider-Man T-shirt. The possibilities are endless. The licensing division can Marvel other characters in to a variety of media, including movies, TV programs, video games, animation and theme parks.

With the exception of The Punisher, historically, all of Marvel's licensed character's movies had captured the highest box-office grosses in their respective opening weekends. In addition four of those movies held on to that position for two weeks and all sequels had outperformed the originals. (Exhibit 7b) This is clear evidence that there is a definite market for comic book character movies. Specifically for movies targeted to children and or families. Of the eight Marvel character movies released between August 1998 and April 2004 (Exhibit 7a), the 5 PG-13 rate movies were the most profitable. The three R rated movies had lower profit margins. These lower box office revenues do not just affect movie profits. The popularity of a Marvel character in a movie will affect the popularity of the toys for that character and a number of other licensed