As the announcement that Disney [DIS] is acquiring Marvel Entertainment [MVL] filters through the financial and entertainment industries, it is obvious that this is going to be a game-changer in a variety of market sectors, as they realize the far-reaching implications of an already-powerful media giant expanding its catalog of valuable assets to include a strong market demographic.
Marvel comics products and the merchandising and derivative TV and motion picture assets represent a fantastic opportunity for Disney to finally branch out of its family-oriented focus, toward a more mature audience as they transition into adulthood. The question would naturally be whether Disney may inadvertently cannibalize from their teen and early adult consumers to feed their Marvel audience numbers. Like Atari a few decades ago, there is definitely a negative impact to oversaturation of the market, and it is significantly worse for a company that competes across multiple sectors that has essentially multiplied its offerings through acquisition.
Management Perspective: Disney and Marvel
There are usually three options around M&A topics like this:
- the first is to attempt to merge two brands together to create a new synthesis that correctly blends the two together;
- the second is to allow one brand to dominate the other into oblivion;
- and the third is to create an environment that allows the two brands to co-exist on relatively equal footing.
The first two options involve ultimately having a single (hopefully stronger) brand by breaking down the categorization of the currently-different demographic groups. Unfortunately, as the markets have learned time-and-time-again, attempting the one-size-fits-all model is prone to a lot of fits and starts at best, and a disastrous outcome at worst. A deliberate, systematic weakening of the lesser broad-coverage brand would have been undertaken to allow the first option to be more successful, while a widespread weakening of the target brand would have to be performed for the second option. Either of these attempts would most likely cause some sort of comment or backlash from the affected consumer bases.
The third option requires more work to properly identify the demarcation between the two brands, and to strengthen the transitioning markers between the two. The emphasis should be to make transitioning between one brand to the other as seamless as possible, and to allow consumers who enjoy both brand to gain further benefit from their loyalty. This involves building extensions from one brand into the other; this may also cause negative comments from consumers who are of the “purist” bent, who prefer to see their favorite brand kept pristine.
Given the distinct natures of the Disney and Marvel brands and product lines, the third option may be best. Something that has been observed to be successful in the past, in the toy/gaming arena, is Hasbro and its acquisition of Wizards of the Coast, with regard to maintaining two separate and distinctive overarching brands, as well as the large spectrum of product lines within each. Also interesting is the transitioning of Pokémon fans to Magic the Gathering. Since both Disney and Marvel products cross several media formats, the opportunities for continued independent development and proliferation appear to be limitless.
Technology Perspective: Pixar and Marvel
An interesting item that Disney brings to the table is, of course, Pixar Studios and its 3-D animation technologies and implementations, as well as its own line of products. For Marvel Entertainment products that need updating and new avenues of development, both on the gaming and video/multimedia segments, bringing the two groups together to discover and exploit their synergies (an overused word with a lot of connotations, to be sure!) is a natural fit. There are certainly plenty of opportunities for Marvel comics characters to gain screen time through 3-D animation that have not been feasible previously; also, taking advantage of existing and prior Marvel TV licensing and syndication to introduce Pixar-based tech to a wider audience means greater advertising and merchandising opportunities.
