Marvel Studios: Under Pressure for Phase Five
With Kang coming to the small screen first, is TV the new way forward for Marvel? | #003
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There is little denying that Marvel Studios has developed into a phenomenon, dominant at the box office and loved by fans. The cultural impact extends well beyond the norm, doing for superheroes what Harry Potter did for wizards (although both have been popular before). There is also general critical acclaim, occasionally marred by some backlash from the film industry1, but nothing that has truly impacted the journey. The juggernaut continues.
And this is not surprising, after all, Marvel has built a legacy for itself. The lights dim, you sit expectant, popcorn in hand. The red logo hits the screen, and you know it’s going to be a good time. Like Pixar before it, or HBO on television, the logo is more than just a symbol – it means (or meant) a stamp of quality. A good brand is memorable, but a great brand is consistent. Every experience in the Marvel universe links to others within it. For the superfans, the ones who have driven the merchandising department to new heights, there are threads within threads. For fans, little easter eggs and post-credit scenes. Even casual viewers have something to hold on to, whether its just a good action scene to end the movie or a chance to view something new, something that will deliver on being a fun time for the entire family. This was the Marvel contract, the one where everyone wins, and Marvel goes home richer than before. Until phase four came along. But first…
Part one: Wait, how much money did we make with phase three?
Marvel has made more money than every other film franchise in history. This is of course, not taking into account the merchandising or revenue from theme parks, in that case it would still be very highly ranked but just not at the top. However, from just film revenue, that is the box office gross, Marvel has made more than $28 billion worldwide. Of this number, phase three alone accounts for ~47%, over $13 billion.
Phase one had six movies, mainly introduction stories that were trying to tell us how important a Shakespearean take on Thor would be while selling us on a larger threat that loomed in the background. The total budget across all films combined was just $1 billion.
Phase two continued with this journey, now focusing on sequels for our original movies that had come before. The stakes were upped but, the larger threat continued to remain hidden. Yes, two Avengers films had already been made, yes new characters were still being brought in2, but nothing changed all that dramatically. There were still six movies. And the total budget remained similar, $1.1 billion.
Along comes phase three. Eleven movies. A budget that is more than phase one and two combined. Crossovers everywhere (not limited to just the Avengers anymore). And a film that broke the record for box office gross when it released3. New characters? Absolutely. Bolder movies? Yes, indeed. Killing off major characters that had been at the heart of the story? Check. Phase three was an economic miracle, but more than that, it was loved. Even critics were in on the game. Nearly every single top ten list of Marvel movies will be dominated by phase three4.
It was the high point. So, naturally, things can only go downhill.
Part two: What goes up…
Okay. It’s time to acknowledge some facts. Firstly, Marvel is still a giant. And even critical acclaim for its films (I will spend time on TV later), especially when compared to phases one and two, remains high. Box office numbers are nowhere near catastrophic. This is not a doomsday piece. But I do think that the reaction to phase four is a warning shot. And even more so, it shows a a shift in Marvel Studios’ strategy.
Why is that? Marvel is continuing continuing to deliver at a fairly high level and accounts for a good chunk of the pandemic gross (i.e. box office gross in 2020 and 2021). Despite this, public perception of the overall project has changed. I think it’s because of what I’d like to think of as Marvel laws -
Sequels always make more money: ‘Iron Man 2’ made more than ‘Iron Man’. ‘Captain America: Civil War’ made more than ‘Captain America: Winter Soldier’. ‘Ant-Man and the Wasp’ made more than ‘Ant-Man’. The list goes on. But, this hasn’t quite held up in phase four, with both ‘Thor: Love and Thunder’ and ‘Black Panther: Wakanda Forever’ unable to outgross their predecessor.
2.5x (domestic5) multiplier is a guarantee: Or again, it used to be. A multiplier refers to how much more money a movie will make in total compared to the opening weekend. For instance, if a movie made $100 million during its opening weekend, a 2.5x multiplier would mean a total gross of $250 million. Marvel never dropped below that 2.5x number, even for the incredibly frontloaded6 ‘Avengers: Endgame’. But enter phase four and multiple Marvel movies are below this threshold. One interpretation of this is that superfans continue to show up while others (who will watch it during the second or third weekend) are on the decline. This could be because…
Word of mouth is (was) never bad: This is a bit tricky to know. I’m using CinemaScore as a proxy here. CinemaScore7 measures movie appeal and has a grading scale from F to A+. Marvel never falls below an A-. Well, it did with the first Thor, but outside of that, it was consistently high. In fact, in phase three, this reached an absurd level where of the eleven movies, only one got an A- grade, the remaining ten all had an A or A+. In comes phase four, with Eternals hitting a B. Worse8, both ‘Thor: Love and Thunder’ and ‘Doctor Strange in the Multiverse of Madness’ scored a B+, which hampered their gross.
Marvel is an event: What ultimately convinced a lot of people to spend money on Marvel was the event nature of the experience. Even in the early days, with ‘Thor’ and ‘Captain America: The First Avenger’, the budgets were never low ($150 million and more with advertising). These movies did not have returns of the kind that came later but, Marvel was committed to the event, the spectacle. Arguably, this is still true for much of phase four, except of course, the TV segment. Yes, it’s time to discuss that.
Before we do however, I also want to acknowledge the extraordinary standard that these four laws showcase – this is not normal. Sequels tend to make less than what came before. 2.5x is a very healthy multiplier for a blockbuster. And yet, for Marvel, it became par for the course.
Part three: Eight new TV shows take centerstage
Marvel has made TV shows before9 – in a deal with Netflix, starting in 2015 (in the middle of phase two) with ‘Daredevil’, audiences could watch Marvel on screen and at home simultaneously. Even prior to this, there was the ABC set of shows, starting with ‘Agents of Shield’ in 2014. But there were serious problems that these shows had -
Budgets were simply not high enough: If we think of Marvel films as an event, one main aspect of this lies in the visual effects. Especially for international audiences, the effects are a key part of the overall experience. The early Marvel shows had very little in the way of effects, partly because the budgets were just not that high. For the entire slate of shows – ‘Daredevil’, ‘Jessica Jones’, ‘Luke Cage’ and ‘Iron Fist’ – the total budget for the debut seasons for $200 million, which under $4 million per episode. For comparison, a single film in phase two could have a similar budget.
All the characters were new: Well, not every single one (Phil Coulson anyone?) but, none of the major stars of the MCU10 made it for these shows. There was no Iron Man, no Thor, no Loki, no Hulk, just a new set of characters trying to build their own TV universe. This is obviously difficult for the viewer because now, they have all of these new characters to care about with very little to link them to the main universe that they’ve invested in.
They were mostly independent: Despite introducing new characters, one of the main draws for viewers was the potential for an eventual crossover with the film universe. This never really panned out. Kevin Feige, head of Marvel Studios, himself said that “At some point, there’s going to be a crossover”. So, there was intent. It just did not work. And viewers were rewarded with cancellations instead of expansion.
To correct for this, Marvel (Studios) decided to step in and take over the creation of the shows going forward. A big bonus here was the push for Disney+ subscribers in 2020 and 2021, which lined up neatly with the change of guard. So, out with Netflix, and in with Disney+.
Each point mentioned above was taken into account with this new launch. The budgets went up dramatically, from under $4 million an episode to $25 million an episode. That was a six-fold increase, enabling the teams to come up with new storylines and ideas. There was no limit to what could be done. With this increase, it was no longer useful to build this on only through new characters. So, the characters from the movies came into the fold starting with Wanda in ‘WandaVision’ in 2021. To be clear, new characters were still part of the programming (e.g., ‘Moon Knight’), but the major drive was re-using characters from the films. This obviously destroys the concept of independence – there is no crossover anymore, it’s all just one big happy universe.
So, with all of these points addressed, what now? One issue is that there’s just too much content. But, maybe that is also the new strategy.
In pure number of hours, phase four has a greater runtime than everything that has come before it. Phases one to three racked up just under fifty hours, while phase four alone is well over that number. With that much content, can anyone really keep up? Maybe not (although some superfans are more invested than ever before), but that may not be the point. Marvel Studios knows that it has reached most of the people it needed to, so, with its new approach, segmentation plays a big role. ‘Ms. Marvel’ is clearly targeting younger audiences (new young audiences), with a superhero barely older than the MCU itself. ‘She-Hulk’ wants to bring in more women viewers. The eventual aim with all of these could be to convert them into movie viewers but, it could also be a chance to bring in new kinds of subscribers. The total number of subscriptions for Disney+ is up and the MCU definitely played a part in that, with total global subscribers growing from seventy-three million in Q4 2020 (before the launch of Marvel shows) to one hundred and sixty-four million in Q4 2022, more than double in just two years. Disney+ can hardly complain.
Part four: Phase five, here we come
Six movies and seven TV shows. That’s what is expected in this next phase of the MCU. Starting with ‘Ant-Man and the Wasp: Quantumania’, on February 17th 2023 (a quick note here - early reviews have not been kind), the movies will return and bring with them a new (new for movie viewers) villain – Kang. Over in the TV or streaming world, ‘Secret Invasion’ will form a parallel story, that is bound to eventually intersect with the movie world.
Even here, more money is likely being spent on building the TV business than on films. With budgets of $25 million per episode, the total cost of the TV side of phase five is set to exceed $1.2 billion, which is potentially the budget of the movies. If it doesn’t exceed the film side, phase six might remedy this. It appears that Marvel Studios is possibly going to take a TV first approach going forward and has already pivoted in that direction. Although, it is possible that this approach is not sustainable and we will see a paring back over time.
Still, a peek into the planned future shows that phase six is currently focused on a few ‘Avengers’ films, with some new characters (‘Fantasic Four’ is back again) as well. Other films remain to be announced. And the TV schedule is not clear yet. But, it is likely that in this scenario, the film lineup will become more limited and focused, looking at just major events and crossovers. Still, this is not quite upon us. For now, phase five emerges from the shadows and maybe, the Marvel laws will continue to hold for a little while.
I personally agree with the main idea that Martin Scorsese presents here. Though usually quoted in articles as referring to Marvel films as ‘not cinema’, it would be more appropriate to say that Scorsese is deeply interested cinema as something new and exciting. He does not believe that Marvel fits this description, which it need not since it plans to have a clear compelling action-based plot, where little can truly be at risk. Scorsese would not like to work with boundaries, but this is also what has made Marvel so consistent.
At this point, the Guardians of the Galaxy were just coming into existence on film, so, there was a lot of room to grow in terms of characters.
This has since returned to Avatar (2009), which had a short re-release that pushed it back over the top. Of course, the figures are not adjusted for inflation – with that adjustment, Gone with the Wind tops the box office.
Especially, the top three or top five. This is true across IMDB, Rotten Tomatoes, Metacritic etc. The main players vying for these spots from phase three are ‘Avengers: Endgame’, ‘Black Panther’ and ‘Captain America: Civil War’.
It’s much harder to take a direct international box office multiplier as not every country gets the film at the same time. Thus, comparing international multiplier is generally not useful. Another way to do this would be to look at each country’s multiplier but, only a handful would contribute to the bulk of the gross (US, China, UK, France, Germany, India etc.).
A movie that has a lot of hype, is also expected to have a large opening weekend. This is frontloaded – most of the gross comes upfront.
I should note that CinemaScore is only US based and thus, cannot track word of mouth outside that market. However, the US market does account for 30%-50% of a Marvel film’s box office and thus, should be a reasonable judge of global choices.
I say worse because Eternals was still a new concept and could be written off as a one-time failure. This does not apply to sequels.
A small point here is that this was Marvel Television, not Marvel Studios. They had a different set of priorities that did not quite match the films’ priorities.
Marvel Cinematic Universe. But, I’m sure you knew that.