Disney Rising on Coming Star Wars Profits
U.S. stock markets are rising to end the week, with the Dow Jones Industrial Average up 0.34% in late trading and within 235 points of another all-time high. Investors are eyeing decent new single-family home sales as a reason to buy broadly today, although even the 6.4% increase in April's seasonally adjusted annual rate of sales isn't convincing everyone the housing market is back. This follows two months of declines, and with interest rates expected to rise there's long-term pressure on home prices and new building.
Disney in focus
Disney spent billions of dollars adding Pixar, Marvel, and Lucasfilm to its business in hopes of building a stable of long-lasting characters that would power the box office, theme parks, and home theaters. The first two studios have done incredibly well, and now it's time for Lucasfilm's Star Wars franchise to shine.
Star Wars: Episode VII is due out in December 2015, and Disney just announced that it has signed up Godzilla director Gareth Edwards to make a spinoff film scheduled for release in December 2016.
This is similar to the Marvel model, which has individual movies filling the gaps between major blockbusters like The Avengers that tie the series together and sustain moviegoers' attention.
The brilliance of buying these three companies is that Disney will have multiple opportunities for blockbuster films featuring well-known characters every year. Between those, it can introduce new characters -- as in Marvel's upcoming Guardians of the Galaxy, or this Star Wars spinoff -- and keep the storylines that work well.
That box office success then flows down to Disney's theme parks, television networks, DVD sales, and streaming content deals, driving more long-term profit. It's a business model built for long-term success, not something that many movie studios can say in a time of upheaval in the media business.
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The article Disney Rising on Coming Star Wars Profits originally appeared on Fool.com.Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. 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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