Everything Looks Marvel-ous

Well, tomorrow is a big day for long-time shareholders of Marvel Entertainment (MVL), as it sets to release the much-awaited Iron Man movie. This event is the beginning of a new future for Marvel as a movie studio, which could bring superhero-size rewards.

I originally bought Marvel for my husband, a consummate Spider-Man fan and long-time Marvel comic collector, as a Christmas present. The original idea was that I’d get him into stocks by buying into a company with a product he knows and loves. I knew virtually nothing about the company, beyond maybe a handful of characters, but that all changed once we added it our portfolio. Since we bought into Marvel in December 2006, it’s had a lot of ups and downs, especially when you factor in USD/CAD parity. But I’m really starting to think that it will be a winner in the long-term, especially if they see success this summer at the box office.

While you’d think that Marvel would make a ton of money off of the box office sales of their movies, it wasn’t really the case, as the actual movie studios got the majority of the windfall. Or in the case of a dud like Elektra, it’s the movie studio that took the hit. In reality, a big chunk of Marvel’s previous revenue came mostly from its licensing division, where Hasbro and other companies would roll out toys, backpacks, and an endless list of goods donning the likes of Spider-Man, the Hulk or the Fantastic Four. Just think of all that junk they give away with kids meals at fast food restaurants, and the licensing royalties they mean for Marvel.

The movie business is a hard one, so this is a big gamble. But in my opinion, Marvel’s starting out on this bold path with the perfect movie. Iron Man is not the typical superhero flick, where an average dude’s (or dudette's) life is turned upside down by some bizarre twist of fate, leaving him (or her) with super-human abilities. It’s almost exactly the opposite, in that its a self-absorbed, money-grubbing billionaire that has a life altering experience and changes his future through his own ingenuity and the self-realization that he should be a better person. Iron Man has a solid cast, with Robert Downey Jr. in the title role and Jeff Bridges, Terrence Howard and Gwyneth Paltrow backing him up. Wrap it all up with one of my all-time favourite directors in Jon Favreau (Made, Elf), and it’s almost too good to be true. The Tony Stark/Iron Man character also seems like a natural for Downey, given the similarities between his real life drug problems and Tony Stark’s alcoholism, which will hopefully lend his character that much more depth.

So far, it’s looking like reviews are positive, and there really is no particular competition this week for the box office. Marvel has been working toward being it’s own studio company for a long time, so if Iron Man is the success that I’m hoping for, it will be a jubilant Annual General Meeting next week.

Marvel has made one other recent deal that makes me think they’ve got their heads on straight and that they are really thinking of the big picture. And that’s hedging your bets on the small screen. With the rising cost of movie theatre tickets, the cheaper big-screen televisions, and expanded HD channels, more and more families are choosing to wait to watch the big releases when they come to cable. Marvel’s recent deal with the FX channel for exclusive rights to some of its future releases could bring in big profits, and it establishes a new practice for Marvel going forward.

The Marvel snowball will just keep growing, now that Marvel wooed Ira Rubenstein from Sony's digital division to head up its new Global Media Digital Group. This spring has brought one big news release after another, and in my mind, Marvel keeps doing the right things to grow their brand.

So here's to hoping this weekend will be a Marvel-ous beginning to the summer blockbuster season!