Will This Company Become the Next Marvel?
William is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
On July 9, online conglomerate Amazon (NASDAQ: AMZN) launched its very own comic book company called Jet City Comics. The question that should be on the minds of shareholders of entertainment conglomerate Walt Disney (NYSE: DIS) should be along the lines of "Will Jet City Comics become a new pipeline of iconic characters on which new blockbuster films can be made?"
Walt Disney already faces intensifying competition in the wake of the increasing popularity of science fiction/fantasy films and television shows over the past 15 years. The popularity of movies such as X-Men, Amazing Spider-Man, and the Avengers will certainly encourage activity among competitors.
The popularity of these titles contributed to a 13% and 12% increase in Walt Disney’s studio entertainment and consumer products revenue segments respectively in its most recent quarter.
Rival entertainment conglomerate Time Warner (NYSE: TWX) already owns quite a powerful sci-fi pipeline through its ownership of DC Entertainment, the home of DC comics. Time Warner brought you DC-based blockbuster hits such as The Dark Knight Rises and Man of Steel, which grossed $1 billion and $600 million respectively as of this writing.
Game of Thrones, through its HBO network, contributed to Time Warner’s top-line and to an increase of 7% in its operating income during its most recent quarter. Moreover, Time Warner competes with Disney’s ESPN, which airs National Basketball Association and Major League Baseball games.
The retail/entertainment conglomerate
Amazon, which started out as merely an online retailer, has expanded into everything from general merchandise, streaming video, digital publishing, web hosting and even original content. Now, with the launch of Jet City Comics, it can create digital and print comic book characters that could turn into the next Spider-Man and Batman, which Amazon could leverage into a motion picture most likely backed by its own massive resources.
Amazon wants to hit the ground running with comic adaptations of popular stories such as Meathouse Man from Game of Thrones author George R.R. Martin and comic book adaptations of science fiction novels such as Wool by Hugh Howey.
No doubt down the road, Jet Blue Comics will venture into creating its own set of characters that could grow in popularity and compete with Walt Disney’s Marvel Comics.
Should Disney worry?
In the short-term the answer is no. Currently, Amazon seems to show interest only in adapting short stories and novels. If Amazon sticks to this strategy then Disney probably doesn’t need to worry, at least on the comic book superhero front.
However, over the long-term Disney needs to watch Amazon’s creation of comic book characters for increasing popularity that would allow Amazon to leverage characters into other mediums, such as toys, original novels, and motion pictures. Considering Amazon’s expansion into pretty much everything, Amazon could utilize its roughly $8 billion in cash to film its own blockbuster movies.
Amazon planted the seed of a possibly powerful sci-fi pipeline for which it can create characters to rival those of Marvel and DC. While Disney’s shareholders shouldn’t fear in the short-term, who’s to say that 10 years down the road Amazon won’t morph into a sci-fi blockbuster-producing force to reckon with.
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William Bias owns shares of Walt Disney. The Motley Fool recommends Amazon.com and Walt Disney. The Motley Fool owns shares of Amazon.com and 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!