How to create a billion-dollar movie franchise.

The numbers behind the industry.
May 31 2005 6:18 AM

The Midas Formula

How to create a billion-dollar movie franchise.

Illustration by Mark Alan Stamaty. Click on image to enlarge.

The huge success of yet another Star Wars re-tread shows that George Lucas has not lost his touch. Aside from his six Star Wars episodes, Lucas has shaped the new Hollywood through Industrial Light & Magic, the state-of-the-art illusion factory that he founded in 1975. By Lucas' reckoning, eight out of the 10 most profitable movies in history have been outsourced to ILM. He also created THX, his own brand of digital surround sound for both multiplexes and home theaters. Along with Steven Spielberg, Lucas deserves much of the credit for turning the cinematic experience into a visual and sonic amusement park for youth, but he did not invent what has now become the big studios' Midas formula. That innovator was Walt Disney.

Disney put all the elements together back in 1937, when he made Snow White and the Seven Dwarfs. The picture was labeled a folly by the moguls who ruled old Hollywood because it was aimed at only a small part of the American audience, children. As history shows, Snow White became the first film in history to gross $100 million, demonstrating, among other things, the propensity of children to see the same cartoon over and over again. The movie was also the first to have an official soundtrack, including such songs as "Some Day My Prince Will Come," that became a hit record. More important, Snow White had multiple licensable characters (the dwarves, the wicked witch) who took on long lives of their own, first as toys and later as theme-park exhibits. So, here was Hollywood's future: Its profits would come not from squeezing down the costs of producing films but from creating films with licensable properties that could generate profits in other media over long periods of time.


The advent of computer-based technology has simply provided new ways of mining this El Dorado. The franchises that have raked in over a billion dollars from all markets (including world DVD, television, and toy licensing)—The Lord of the Rings, Harry Potter, Spider-Man, Finding Nemo, Star Wars, Shrek, The Lion King, Toy Story, and Pirates of the Caribbean—share most, if not all, of the nine common elements of the Midas formula:

1) They are based on children's fare—stories, comic books, serials, cartoons, or, as in the case of Pirates of the Caribbean, a theme-park ride.

2) They feature a child or adolescent protagonist (at least in the establishing episode of the franchise).

3) They have a fairy-talelike plot in which a weak or ineffectual youth is transformed into a powerful and purposeful hero.

4) They contain only chaste, if not strictly platonic, relationships between the sexes, with no suggestive nudity, sexual foreplay, provocative language, or even hints of consummated passion. (This ensures the movie gets the PG-13 or better rating necessary for merchandising tie-ins and for placing ads on children's TV programming.)

5) They include characters for toy and game licensing.

6) They depict only stylized conflict—though it may be dazzling, large-scale, and noisy in ways that are sufficiently nonrealistic and bloodless (again allowing for a rating no more restrictive than PG-13).

7) They end happily, with the hero prevailing over powerful villains and supernatural forces (and thus lend themselves to sequels).



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