The Walt Disney Company (DIS): An Unsettling Trend in the House of Mouse

Facing the competition

In the coming years, Disney needs to show its strength and avoid a trend of big-budget flops in regard to its major releases. While the two-films-a-year release schedule of Marvel Studios films will help with this, even those films may see increasing competition from studios such as Time Warner Inc (NYSE:TWX)’s Warner Bros.

As I recently mentioned, Time Warner Inc (NYSE:TWX) owns DC Comics, the other major comic book publisher that shares 70% market share with Disney’s Marvel Comics. This gives Time Warner and Warner Bros. access to DC’s extensive character roster, allowing the studio to make record-setting films of its own such as Man of Steel. If DC’s superhero films start giving Marvel Studios’ films a run for their money, the runaway profits of the releases might drop as comic fans have more than one option available to get a superhero fix from.

To Infinity and beyond

Disney is by no means in trouble yet. Even if The Lone Ranger tapers out and loses money, the company still has several strong upcoming releases to make up the loss with. It even plans on launching Disney Infinity later this year to try and buoy up its interactive segment, and if the game is a hit like Activision Blizzard, Inc. (NASDAQ:ATVI)’s “Skylanders” franchise then Disney Interactive could show a profit soon. The company needs to remain vigilant, however, since its properties aren’t going to sail through based on the company’s reputation. While Disney has some powerful properties, if it suffers from annual flops then both investors and consumers might start wondering whether the company is really worth their time and money.

John Casteele has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney.

The article An Unsettling Trend in the House of Mouse originally appeared on Fool.com and is written by John Casteele.

John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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