Reinventing Marvel

Whether you own Marvel stock or just enjoy financial news (and who doesn't?), Motley Fool has an article up on "Marvel's Reinvention," taking a look at Marvel's transformation from a publisher/licensing house to a full-fledged movie producer:

As holders of the company know, Marvel feels that it's giving up too much revenue and profit to its licensed film partners, such as Twentieth Century Fox, a division of News Corp. (NYSE: NWS), and Columbia Pictures, a division of Sony (NYSE: SNE). For instance, from the very successful Men in Black movie, it's reported that Marvel made only $1 million. Now, in addition to licensing, it wants a bigger take of the pie and plans on making its own movies.

From a production viewpoint, this makes sense. The company is heavily involved in the filming and production of its movies, even getting into the finer points of its superheroes' characteristics. Now, the company will have complete control over all aspects of the film, from script to director to actors to character movements on screen.

Fool notes that this brings not only the opportunity for Marvel to both have greater control over its characters on the big screen and take a bigger slice of the pie if they are profitable, but also an increased amount of risk for Marvel should their films bomb:

Marvel has been a publisher that licensed intellectual property -- not a movie studio. Starting with its first movie, though, expected sometime in 2007, company and investors alike must worry whether it will prove as wildly successful as the likes of Spider-Man or The Fantastic Four. Now it has the downside risk of making movies, as well as keeping all the upside.

The bottom line is that this company is changing dramatically. It's not the comic book licensor it was a short time ago. Investors, both old and new, should reevaluate their holdings and determine whether what they want is to own shares of a movie studio that also publishes comic books and licenses toys.

No doubt 2007 will be another interesting year for a company that escaped from bankruptcy just a few short years ago.