Promo image from Batman v Superman: Dawn of Justice. Source: Time Warner.
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Walt Disney has used its ownership of Marvel to great success in recent years. A steadystreamof comic-book-character-themed films, television shows, video games, and merchandise sales have boosted Disney's business since the House of Mouse bought the superhero company for $4 billion back in 2009.
Time Warner is hoping for similar success in the years ahead. The firm has owned DC Comics, Marvel's chief rival, since the media giant's creation. Although it has used DC characters (particularly Superman and Batman) in dozens of films, television shows, and video games over the years, its efforts have been relatively modest compared to Disney's recent undertakings.
That's about to change. On March 25, Time Warner's Warner Bros. film studio will release Batman v Superman: Dawn of Justice, and the DC Extended Universe will kick into full gear. If successful, it couldpropelTime Warner's results both in 2016 and for many years to come.
Films, films, and more films
Batman v Superman follows 2013's Man of Steel, but it represents something much larger. The film will introduce a cavalcade of DC superheroes, including Aquaman, The Flash, and Wonder Woman, to audiences. Most viewers should be well-acquainted with Batman, as Christopher Nolan's Dark Knight trilogy dominated the box office for much of the last decade, but the film will offer a new take on the character, with Ben Affleck donning the iconic suit.
"More than just a clash between the two iconicsuperheroes, it will mark the beginning of a multiyear slate of franchise films at Warners," said Time Warner CEO, Jeff Bewkes, on the company's earnings call last month (via Thomson Reuters).
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In August, Warner Bros. will launch its second major comic crossover film, Suicide Squad. Rather than superheros, that film will focus on DC supervillains, introducing Harley Quinn, Deadshot, Killer Croc, and a new take on The Joker, among many others. These characters will form the backbone of Warner's film slate for much of the next decade. 2017 will bring the first Justice League movie and a stand-alone Wonder Woman film. Additional films based on The Flash, Aquaman, Shazam, and Cyborg remain in various levels of development, and more could eventually be forthcoming.
Audiences have reacted enthusiastically to Disney's recent superhero films. The Avengers and its sequel remain among the top-grossing films of all time, while Guardians of the Galaxy andIron Man 3have also performed particularly well. Disney has leaned on Marvel to fuel other parts of its business, launching Marvel-themed television shows on its networks, using Marvel characters in its video games, and collecting royalties from licensed Marvel products. Since it announced the acquisition, Disney shares have risen about 270%, strongly outperforming the broader S&P 500. Disney is a massive business, and there have been many other factors fueling its surge, but Marvel has played a key role.
Video games, merchandise, and television shows
If its DC Extended Universe is well-received, Time Warner could enjoy similar results. DC will slowly permeate the rest of the firm's business, making its way to Time Warner's cable networks, its video game studios, and even its premium subscription network, HBO.
In 2014, Time Warner launched The Flash on The CW, a network it partially owns. DC's Legends of Tomorrow joined The Flashin January. Time Warner's cable channel Cartoon Network is also getting some DC-themed content. "Cartoon Network is launching a new Justice League TV show," Bewkes said. Currently, the channel's top program is Teen Titans Go, a different DC-themed series that made its debut in 2013.
Time Warner's video game business generated $1.5 billion of revenue in 2015, a record for the firm. Time Warner has only announced a couple of DC Extended Universe games, but it's likely many are in the pipeline. Time Warner's video game studios generally rely on Warner Bros.'s intellectual property. Last year, it released games based on Batman and Mad Max.
"I do believe that film and games will more than offset the difficult comp in TV and we will have strong growth in 2016," said Warner Bros. head Kevin Tsujihara.
Last year, Warner Bros. partnered with toy-maker Mattel for a line of DC-themed dolls, which made their debut earlier this year. Their reception shouldn't affect the company much, but they stand out as a key example of the opportunities the DC Extended Universe could bring. "The next stage of growth for DC will be in film, which is also a critical driver in our plans to further expand our consumer products business," said Bewkes in November (via Thomson Reuters).
Time Warner has yet to reveal any plans for a DC-themed HBO show, but through its agreement with Warner Bros., the DC films will eventually make their way to HBO's catalog. That could make an HBO subscription just a bit more enticing, and give Time Warner an opportunity to further monetize its films. "Our film viewing across all platforms is over 72% of viewing," said HBO head Richard Plepler.
Generally, the success or failure of any particular film shouldn't have much of an effect on a massive entertainment giant like Time Warner. But Batman v Superman: Dawn of Justice is unique. It isn't just one film, but rather, the beginning of a multiyear strategy -- a strategy that should affect almost all portions of the company.
If it's a box office hit, investors should treat it a little more favorably than other films, as it would bode well for the future of the DC Extended Universe.
The article Time Warner's "Batman v Superman: Dawn of Justice" Could Fuel Its Business for Years to Come originally appeared on Fool.com.
Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Time Warner. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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