How Avengers put Disney at the top of the charts

Avengers cast on-stage — Image caption The Avengers cast

Avengers: Endgame broke all box office records last weekend and has confirmed Disney’s dominance in global cinema.

More than 90% of the value of all tickets sold in UK cinemas last weekend was for Avengers: Endgame.

Within five days it had become the fastest film to break the $1bn sales barrier worldwide.

But more significantly, it is the latest evidence that Walt Disney is now the world’s biggest box-office player.

Of the 10 films with the biggest worldwide sales in their opening weekend, Disney has distributed five.

Variety magazine reported that Disney took one fifth of all global box office takings in 2018.

The root of Disney’s success lies in shrewd purchases: Pixar (Toy Story) in 2006, Marvel Entertainment in 2009, LucasFilms (Star Wars) in 2012 and then the film studios of 21st Century Fox (Avatar, X-Men, Planet of the Apes, Kingsman) in March this year.

Endgame is now the 22nd film in the Marvel Avengers series based in the fictional Marvel Cinematic Universe (MCU).

Superhero films have always been a Hollywood mainstay, but the MCU, by populating its world with a range of characters as well as stories, has turned out to be the most successful film franchise to date.

Richard Broughton, research director at media research group Ampere Analysis, said: “Franchises are particularly suited to big studios that are reluctant to take risks on new titles.

“And for Disney it was a happy accident that the early titles, Iron Man, The Incredible Hulk and Thor, struck a chord – and it rolled on from there.”

And the rewards have been spectacular. The top 10 Marvel films have pulled in more than $12bn (£9.2bn) at the box office.

For Disney investors, Avengers: Endgame has been a tonic for the share price. It had been dawdling in a trading range between $85 and $125 for four years, but the buzz around the film has sent it shooting up close to $140.

But however successful the Avengers franchise may be, most analysts believe the future for Disney (and its share price) is not in movie theatres but online streaming.

It’s a market that is expected to be worth $125bn within six years.

Last month, Disney said the entire Star Wars series, the first 30 seasons of The Simpsons, as well as content from Marvel, Pixar and National Geographic, were going to be available on its new streaming service, Disney Plus. The company’s shares rose 10% in a single day.

Ampere’s analysis shows that streaming has no impact on box office takings. In fact the opposite is true.

Mr Broughton says: “The ideal situation is you get the customer to pay for the film in the box office, then you get them to pay for it again online.

“And theatres boost the online business. Offering titles in the cinema for Disney is not only profitable but also great for boosting its profile and marketing.”

For the rest of the year, the world is going to be assailed by offerings from Disney online with the launch of Plus, and in the cinema, with Frozen 2, The Lion King and Starwars: The Rise of Skywalker all due out in the next few months.

Competition online is going to be fierce. With Disney Plus being offered at a discount of up to 45% to Netflix prices, streaming may be slow to turn big profits. Mr Broughton believes the competitors – Amazon, Netflix, Disney, Apple TV, and WarnerMedia (including HBO) will have to carve out distinct profiles in the market.

He said: “You will see increased specialisation, with names like Disney focusing on family entertainment, and the others probably moving into less competitive areas.

“What it will mean for viewers is that one online streaming service will probably not be enough for say one household, and they are likely to have multiple subscriptions.”