At the time of this writing, “Avengers: Endgame” amassed $1.2B in worldwide box office sales over its opening weekend, smashing records all over the world.
Casting aside that I’m a Marvel fan boy, I think it’s fair to say that Marvel Studios is very special. What they’ve done with their movies — both individually and connecting all of them into an ongoing narrative — is unprecedented. And there’s a lot that they’ve done right that almost any brand, in or out of the movie industry, can learn from to emulate their success.
So let’s look at what they’ve done to date, how they got there, and what brands can take away from it.
What have they accomplished?
Prior to “Endgame”, quantitatively, they’ve produced 21 consecutive #1 films over the course of 11 years making a total profit of $14B+ (worldwide box office less production budget, not including any marketing costs or adjusted for inflation). No small feat.
Qualitatively, they single-handedly reinvigorated and are dominating a genre that we all thought went extinct thanks to essentially one movie: 1997’s “Batman and Robin” with George Clooney as lead. Sure, there were Spider-Man and X-men movies after that and before the MCU which were successful, but they didn’t set up an entire universe as a result and were handled by other studios.
But digging deeper here, what they did as a movie studio was an amazing feat.
Marvel Studios transformed themselves into a meaningful brand
At my current ad agency, we use a stat that says if a brand disappears tomorrow, a large majority of consumers wouldn’t care. So the question becomes, how do you make people care about your brand?
Marvel Studios formed because Marvel Entertainment didn’t want to license their characters out to other studios anymore. They felt the other studios weren’t staying true to the characters or their source materials, so they wanted formed a studio to tell their own stories the way they wanted to.
Over time, Marvel Studios not only made people care about their movies and characters, but in the process, turned the studio itself into a brand people came to care about. They did this by respecting their audience. Consumers in today’s world are savvier than ever and know when a subpar product is rushed to market for the sake of making a quick buck. So Marvel Studios went slow, developing a cadence of films that allowed moviegoers to feel invested in each individual character and growing with them like an old friend, staying true to the source material and modifying things to fit the times so long as they advanced the storytelling. The studio generally avoided rushing release dates and stories at the expense of the viewer and overall narrative. They showed fans that they cared about their own product, which came across as caring about their audience. Dishes in restaurants are only as good as the passion the chef puts into cooking them.
An example of a brand that fell from grace from rushing out poor quality product was Guitar Hero. It became a household name and a cultural phenomenon in the mid-late 2000’s, but out of greed grew too quickly and put out too much product as to saturate the market while also pumping out poor quality (perceived by many to be just a cheap cash-in).
As years passed, moviegoers came to trust the Marvel Studios brand and started to develop high/positive expectations over the studio’s future pipeline. Very few movie studios have this trust (I would put Pixar on that list). As beloved as the Harry Potter franchise is, do people care about the fact that Warner Bros produced the movies? Do you care about what untitled movie MGM will unveil in 2021?
Becoming a meaningful brand is an incredible accomplishment. If you look at other industries, there is a small proportion of products where the consumer cares about the manufacturer or producer. Do you care about the fact that Diageo imported Guinness for you, or do you just love Guinness? Do you care that Republic Records is going to release a new album from one of their artists, or that it’s actually Taylor Swift who’s releasing a new album?
They were a first mover
Being a first mover has its pros/cons. Apple wasn’t the first to make an mp3 player, but arguably produced a best-in-class one with the iPod. AirBnB wasn’t the first online home rental company, but is arguably the most widely used now. On the flip side, Samsung launched the first foldable phone, but is currently experiencing issues.
Marvel Studios not only set the precedent in creating successful interlocking movies, but they’re still the best at it today. And their investment in telling stories over time is clearly paying off as “Endgame” proved.
To capitalize on Marvel’s successful movie universe model, Warner Bros’ DC Comics studio rebooted their entire line of characters to follow suit. But the general consensus has been that they rushed to introduce characters to market. They established a “Justice League” before they established the individual characters. Universal Pictures also attempted to make a universe but has put it on hold. As the studio that owns all the famous movie monsters — Dracula, Frankenstein, Wolfman, Mummy, to name a few — they quietly tried to make a “Dark Universe” with “Dracula Untold” (2014) and “The Mummy” (2017) reboot with Tom Cruise, which featured Russell Crowe as Dr Jekyll and Mr Hyde to help set up future movies. Like DC, the consensus is that Universal rushed to put out product that would help sell future movies, investing in sequels before allowing moviegoers to invest in the characters.
Away Travel is a start-up that was born from the fact that consumers didn’t have any emotional connection to their luggage. So they set out to become a travel experience brand, rather than just a luggage brand — a first mover of sorts for luggage manufacturers. But they couldn’t deliver their first batch of luggage in time for Christmas. Instead of rushing to deliver poor quality luggage, they shipped out a coffee table book for the holidays, which was positioned as a value-add with the promise of luggage in Q1 the following year. Away raised $50M in Series C in 2018 and achieved profitability in 2 years as a result.
How did they get here?
So how did Marvel Studio become a meaningful brand that moviegoers have come to trust and love? There are four main areas where I think they’ve been smart in.
Diversification
Negative fan boys will argue that all their movies are formulaic and sure, to some degree they do follow a familiar outline. But when you look closer, each movie was a byproduct of the casting choices and different directors coming together to carve out its own identity, tone, and story, yet having some continuity to ladder up to the overall ecosystem and longer narrative.
Marvel Studios dug deep into their library of characters to provide different perspectives and stories, and in their marketing campaigns was able to differentiate the movies. How else do you explain that they were able to sell audiences on seeing a move about a talking racoon and grunting tree? Giving moviegoers a different experience each time helped avoid fatigue. Some examples:
- “Captain America: First Avenger” was a period piece, while the sequel “Winter Solider” was more of a spy thriller and “Civil War” had political undertones
- “Ant-Man” was a heist film along the lines of “Ocean’s 11”
- “Guardians of the Galaxy” was a space opera paying homage to “Star Wars”
- “Spider-Man: Homecoming” was a “Ferris Bueller” coming of age film
- “Thor Ragnarok” was a comedy, completely tonally different from the previous 2 movies, which wound up giving the character a little more depth and charm
- “Black Panther” was lauded for its accurate portrayal of African culture, despite Wakanda being a fictitious country
- “Captain Marvel” was marketed as a movie celebrating female empowerment without demeaning male audiences
By contrast, critics of the Warner Bros DC universe felt that they relied on Batman and Superman too much to anchor their business plans. When they finally tried to diversify and bring other characters and movies into the mix, critics felt that all their universe movies had the same grit, color palette, and tone — moviegoers got fatigued. After years of criticism and box office results, they decided to make Shazam into a comedy matching the tone of Tom Hanks’ “Big” — and it became box office gold.
And if you look at Marvel Studio’s movies as products or SKUs, then their collection and diversification of movies could be considered a portfolio of products that form an ecosystem. This isn’t too different from Apple. They have their iPhone, iPad, Apple Watch, Apple TV, MacBook — all of which have different roles and all work individually, but all live as part of an ecosystem designed to enhance the user’s overall experience.
Calculated profitability
They’ve had a remarkable run at launching #1 movies. But because not every movie shatters box office records or makes more money than the previous one, some look solely at the numbers as “a disappointment”.
Ant-Man, arguably the silliest of all the characters in terms of name and powers, was perceived as a disappointment by many because the first movie only made $57M on opening weekend when it came out in 2015. Whereas the previous three movies in 2014–15 made $191M, $94M, and $95M respectively on opening weekend (chart below). But “Ant-Man”’s profitability is 299%. It only cost $130M to produce but raked in $518M in worldwide sales.
The real story is two-fold:
- From a financial perspective, as the 12th movie to be released, Marvel Studios had already made $6.5B in total profits from previous films. So financially, not only could they take a risk, but they understood it’s not about “bigger is better”. Taking a smaller (pun intended) character and making the budget smaller, meant that they didn’t need to make a lot back to make a profit. The sequel, “Ant-Man and the Wasp”, also had a budget of $130M but made $623M worldwide, an even higher ROI of 379%.
- And as the 12th movie, the studio had established themselves as a meaningful brand and people knew what to expect from it. By this time, people were invested in seeing how this odd and fun character would fit in with the rest of the MCU. And the studio was confident that it could make its money back.
Many companies are so focused on quick and immediate sales, profitability, and quite frankly greed, that they are unable to play the long game. Guitar Hero, previously mentioned above, prioritized quick profits over quality, diversification, and satisfying their customers.
Leadership
Every successful brand has a visionary behind the wheel. Someone who is a driving force, a key decision maker, has the ability to look light years ahead, and not only see the big picture, but is also involved in the little details. Amazon has Jeff Bezos. Marvel Studios has Kevin Feige.
Mr Feige is involved with casting choices, choosing directors, developing storylines, setting the tone, and making the decisions on which character to bring onscreen and when (with the criteria that they help move the story rather than simply make money).
This is what other studios lack, like Warner Bros DC for example. They don’t have a specific vision for what they wanted to accomplish with their hero universe, seemingly settling for what they believed to be cash cows with Superman and Batman anchoring everything. They actually thought Zack Snyder was that person, but arguably he didn’t have the strategic vision, passion, respect for and understanding of the source material, or expertise to manage an entire universe at a scale that could rival Marvel Studios.
And lack of leadership has affected other brands as well. Blockbuster had the opportunity to buy Netflix back in the day, but passed on it because their leadership didn’t see that streaming was the future. Meanwhile, Uber had to oust it’s CEO and Founder due to the toxic culture he enabled — this allowed Lyft to grow as the better alternative.
Competitive positioning
When releasing a movie, studios are actually competing with all forms of entertainment, like Netflix, video games, sporting events, concerts, and the like. But naturally, they are mainly competing with other movies.
Over time, once Marvel Studios established themselves as a juggernaut of a movie studio, they commanded the market. After a slew of hits, they understood their strength in positioning and value proposition with its audience and among its competitors. In other words, once they chose a release date, no other studio wanted to compete, which is another reason for their profitability.
In 2015, “Captain America: Civil War” was announced to be released on May 6, 2016, a date that Warner Bros’ “Batman vs Superman” had already secured and made public. Feeling confident in their product, Marvel Studios didn’t flinch — and was actually coy about it. Mr Feige often takes the high road when asked about competition and rather than disparage them, often says that there’s enough pie for everyone. But Warner Bros eventually moved their movie, which did go on to make $873M in worldwide ticket sales against a $250M budget, but was critically panned. “Civil War” on the other hand went on to make $1.1B in worldwide ticket sales also against a $250M budget with critical praise.
There are many brand wars happening today: Tesla vs Prius. Lyft vs Uber. Harry’s vs Gillette. Without going into too much detail or oversimplifying their strategy, here’s a quick snippet of why the former is outdoing the latter:
- Tesla defied convention and entered the electric vehicle market that valued economy over form and function. Elon Musk truly believed his Tesla to be a game changer and went after the high-end market, proving that EVs can be luxurious. Yes, it is facing some production issues, but they are still the face and future of EVs.
- Lyft took their branding and culture in the opposite direction of Uber. Uber tried to be sleek and exclusive. Their corporate culture set the tone which resulted in sexual harassment lawsuits. Lyft took on the persona of being “Your friend with a car.”
- Harry’s positioned themselves as the answer to men’s biggest problem with shaving: overly-expensive razors. They played the underdog and portrayed Gillette as a greedy corporate giant, a modern-day David vs Goliath. Their story was so compelling that it became a legitimate threat to Gillette.
Establish what your brand means to people and how it’s different than your competitors. Once you find your place in the marketplace, play up its strengths. While some brands choose to bash other brands, Marvel Studios has shown that once you become a meaningful brand to people, it doesn’t matter what the competition is doing — in their case, they became a brand that can truly say “If you build it, they will come.”
Assembling it all together
Yes, Marvel Studios has an advantage of having a library of characters that have been around for decades, but just because people might know them doesn’t mean people care. Marvel Studios made people care through a variety of strategies. And when you look at the totality of what they’ve done to date, it really is impressive.
Here’s a summary of takeaways that brands can emulate:
· Become a brand that means something to people. That will pave the way for many opportunities down the line.
· Establish the right leadership. Find those people who are passionate and truly understand the brand, the big picture, and the roadmap to get there. The choices they make will not only affect the brand but the audience as well.
· Respect your audience. Don’t view your audience simply as an ATM. Establish their trust because in this day and age, with the speed of information and social media, consumers will know when you’re being disingenuous.
· Don’t rush. Better to be late with product that’s meets or exceeds your audience’s expectations than be on time with subpar quality.
· Play the long game. Don’t prioritize short-term profits over what’s right for the brand or your audience.
And to be clear, I’m not suggesting that each movie from Marvel Studios was perfect. There are fair criticisms out there, but overall, I’d argue that you still generally walk away feeling entertained, inspired, and more happy than not to have experienced the film—and most importantly, feel like you’re growing up with all these characters. “Endgame” was a success not only because of the movie, but because of the closure people wanted and needed in seeing how their 11 year journey would come to an end.
As a fellow agency colleague of mine (and fellow fanboy) said: “Marvel is almost the ideal ‘branded house’.”
Excelsior!
