synergy

How can film studios use 'franchises' to create 'synergy'?

Film franchises are very important to film studios as they bring in a lot of money through synergy meaning not only from the films but from the merchandise and DVD and Blu-ray sales. An example of a successful film franchise that has brought in a lot of money for their studios is Despicable Me, directed by Pierre Coffin and Chris Renaud and produced by Universal Pictures. This film franchise made a total box office revenue of $1,497,275,250, Despicable Me making $543,113,985 and Despicable Me 2 making an even bigger profit of $954,161,265. 

Film studios make most of their money from film franchises through horizontal integration. Horizontal integration is when film studios take over many different companies in order to promote their film franchise. They do this by buying or setting up companies involved in toys, game websites, DVD and Blu-ray, merchandise, advertising, magazines, newspapers and many more.

An example of a film studio that uses horizontal integration is NBC Universal, the owners of the famous Universal Studios. NBC Universal own many companies such as cable and television, broadcast, digital, film, international and parks and resorts. One of the biggest cable channels by NBC is CNBC which is the world leader channel for business news. CNBC has its own separate channels for different countries broadcasting to Asia Pacific, Europe, Middle East and Africa; furthermore this channel also has a CNBC HD+ which helps to gain more viewers as many prefer to watch television in a more technologically advanced way. By using television channels, studios like NBC Universal can put adverts for their film franchise in breaks and can even show a film or a spin-off of a film from one of their film franchises in order to promote their product. NBC Universal’s broadcasting is split into four separate companies; these are NBC Entertainment, NBC News, NBC Sports Group and NBC Universal Cable and New Media. NBC Entertainment alone has gained critical acclaim, numerous awards and rating success along with earning more Emmy Awards than any other network in television history. From this we can see that NBC broadcasting is very successful and with good reviews they can attract wider audiences who will become aware of their franchises through advertising via cable and television. NBC Universal also has five distributions which are NBC Universal Domestic Television Distribution, NBC Universal News Group, NBC Universal Owned Television Stations, Telemundo and Universal Television who all own several television channels which can all be used to advertise film franchises produced by NBC Universal studios. NBC also own many digital companies, one of these being Hulu which they share with other studios and own 32% of. Hulu is a subscription website where people in the United States can stream films, TV shows, trailers and much more. By NBC owning a 32% of this they are able to put films from their film franchises on Hulu meaning the films are available for more people to watch which gains a wider audience and persuades people to buy merchandise etc. NBC are most famous for their film studios, their most popular being Universal Pictures. Universal Pictures partners with leading international film companies to make films for wide commercial release or distribution in specific countries, moreover Universal Pictures has produced many classic films and successful film franchises such as Back to the Future, Meet the Parents and Fast and Furious. By producing successful film franchises, Universal Pictures has become very well-known which helps in selling new film franchises that they bring out as the audience would expect their new film franchises to be enjoyable just as their past ones have been. In addition, NBC Universal also own theme parks and resorts, their most commonly known one being Universal Orlando. Universal Orlando is the largest property owned by NBC’s Universal Parks & Resorts company, is the largest resort in Orlando, Florida, and is the second-largest resort in Greater Orlando after Walt Disney World. Many families are attracted to Florida as a holiday destination therefore NBC gain a lot of money from their theme park in Orlando, furthermore having their own theme parks means that they can sell as much merchandise as they like in their gift shops which gains a lot of money from film franchises. Finally, NBC also produce their films and most of their TV channels worldwide. They do this through their international companies, for example CNBC International, the leading global business and financial news broadcaster. This international company broadcasts to territories outside of North America and operates two regional news networks - one in London, which is the hub for its Europe, Middle East and Africa network, and one in Singapore, which is the base for its Asia Pacific network. By broadcasting internationally, NBC Universal can advertise and promote their film franchises to a much wider audience and can make money from around the world rather than just North America, making their film franchises more successful with regards to profits.

A well-known franchise produced by NBC Universal is Despicable Me. This franchise has two films: Despicable Me and Despicable Me 2. It also has 6 short films called Home Makeover, Orientation Day, Banana, Puppy, Panic in the Mailroom, Training Wheels and Despicable Me: Minion Mayhem. Furthermore, the franchise is expecting two more long films- Minions in 2015 and Despicable Me 3 in 2017. The Despicable Me franchise also has a very popular iPhone/iPad/Android app called Minion Rush which earns $21,030 in an estimated daily revenue and gains 26188 installs a day. In addition, NBC released a blimp disguised as a minion named ‘despicablimp’ which toured around the USA for six months from March 2013 in order to promote the release of Despicable Me 2. Futhermore, several books have been published from the film called The Junior Novel, The Anti-Villain League Handbook, Undercover Super Spies, Attack of the Evil Minions, Make a Minion, Meet the Minions, World’s Greatest Villian, My Dad the Super Villain and Sleepy Kittens which also helped to make profits through horizontal integration. Universal Pictures and Illumination Entertainment also paired with 100 licensing and promotional partners, one of the partners being McDonald’s who used their Happy Meals to sell Minion toys and help NBC to promote their film. Universal also partnered with Thinkway Toys who released various toys and figures based on the film franchise helping to gain profits.