MBA Thesis

The thesis for my MBA in Film Finance lacks jokes, but it may be of interest to film fanatics. It was credited ‘with merit’ because of the nifty data analysis (see PDF). I think it is an easy, fast and informative read if you wonder why Hollywood is making so many remakes.

(Download PDF copy with graphs/visuals HERE.)


Presented by:
Karen Krizanovich #070034475

In partial fulfilment of the:
Masters of Business Administration (MBA) degree

Submitted for:
Business Mastery Project

Presented to:
Mr. Joseph Lampel
Professor of Strategy and Entrepreneurship
Cass Business School
City University

Date: 1 June 2010
Word Count: 11,864

Table of Contents

1. Introduction 9

2. Data Set & Criteria 11
2.1 Box Office and Budget Data 11
2.2 Reboot/Rejuvenation Criteria 12
a) Episodes 12
b) Earnings 12
c) Type of Release 14
d) Running Time 14
e) Stage of Process 14

3 Terms:
Franchise, prequel, trilogy, sequel, remakes and reboots 15
3.1 Franchise 15
3.2 Prequel 16
3.3 Trilogy 17
3.4 Sequel 17
3.5 Interquel 18
3.6 Remake 18
3.7 Reboot 19

4. Reboot Genesis 20
4.1. The importance of perceived differences 23

5. The Franchise as Method of Exploration/Exploitation 24
5.1 Overview of Film Franchise as
Exploration/Exploitation Strategy 24
5.2 Genre and Quadrants 26
5.3 Synergy 28
5.4 Exploration Without Exploitation 29
5.5 Franchises and Revenue Generation 31
5.6 Determinants of Franchise Selection 40

6. The Reboot Within: Product Rejuvenation Life Cycle 44
6.1 Reboots As Franchise Rejuvenation Strategy 49

7. Changing Essentials: Merging Exploration With Exploitation
In The Film Product Life Cycle 54
7.1 Change of Lead Actor/Character 55
7.2 Optimising Association with Parent Properties 58
7.3 Temporal Proximity 59
7.4 Tonality 61

8. Summary 64

9. Recommendations 66

Table X. Rebooted Films 70

Table D: Regression Samples & Analysis 73

Table XX Data Sample 76

Notes 77

Bibliography 78

List of Figures

Graph A: Franchise Vs Non-Franchise Films 33
Graph Series B: Franchise Fitted & Actual Values 34-38
Graph D: Product Life Cycle Curve 44
Graph E: Spider-man franchise data 47
Graph F: The Product Life Cycle Curve – Rejuvenation 50
Graph G: Fantastic Four Values 51
Graph H: Star Trek Values 52
Graph I: X-Men Values 52
Graph J: Comparison of budgets and box office
for franchise of Friday the 13th 53
Graph K: The Bond Franchise 62
Graph L: The Superman Franchise 63

List of Tables:

Table A: Top Grossing MPAA Ratings 1995-2010 27
Table B: Budget & Average Box Office of
Rebooted/Rebooting Franchises 39
Table C: Inflation Adjusted Top 20 Movies Since 1977 41
Table D: Regression Sample & Analysis 61
Table E: Regression Samples & Analysis 69


Many thanks must go to:

My advisor, Mr Joseph Lampel, for his excellent guidance, good humour and astonishing intellect,

My brother, John G. Finley, MBA CFA, for his banking know-how and loving support,

Dr. Chris Parker of London Business School for his patience, time and encouragement,

Toby Robertson for analysis that proved the data supported the theory,

My colleagues at The Critics’ Circle, Film Section, London – especially David Aldridge, Rich Cline, Kim Newman, Jo Berry and Angie Errigo for thought provoking opinions,

Classmates, experts and friends Alex Marshall, Zach Barfield, Jess Search, Claire Geddie, Paul Gilooly and Leon Clarance for their input, energy and perspective,

Brian Wright for proofreading while he drove,

Eeron Bovell and Iwona Newton, the unsung heroines of Cass Business School,

Richard P. Phillips of Smith Reed for translating the lexicon of agreements,

Last but not least, Film Academy leader Terry Illot whose good ideas always illuminated the path ahead.


Remaking films in Hollywood is not new. What is new is the focus Hollywood is placing on film franchises. From 1922-1999, profitable film product concentrated on stand-alone films :

By the 1970s, Jaws and Star Wars proved that “high concept” films could be highly profitable . Franchises such as Lethal Weapon, The Terminator, further Star Wars, Jurassic Park and Home Alone became templates for risk management and maximising profitability.

From 1993 to 2006, average movie production costs rose from $29.9 million to $65.8 million, the rise caused increased costs in star power and special effects: MPAA estimates full costs of studio films in 2006 hit the $100 million marker, when marketing costs were added. With rising costs, dropping audience figures, competition from other leisure activities, piracy and falling DVD sales, the moving picture industry must strengthen its historical ability to explore and exploit new strategies to keep its products profitable.

Hollywood turned to a strategy it knew but had never exploited so intensely: to explore properties that have proven successful in the past and exploit them in new ways, i.e. rejuvenating an old product. Currently, over thirty films from the 1980s are reported as being rejuvenated or ‘rebooted’, including franchises Police Academy, RoboCop, The Karate Kid, Beverly Hills Cop and Ghostbusters.
This tactic of taking dormant or exhausted products and bringing them to a new market is best described by J G March’s theory of exploration/exploitation and Berenson and Mohr-Jackson’s theory of product rejuvenation .

Reboots – contextually defined as a film product rejuvenated primarily by changing two factors recognisable to the audience: actor/character and change of tone – are not evidence of Hollywood’s bankrupt imagination. They are strategic products, aligned with rejuvenation theory , which manage risk in an uncertain climate.

The current rash of reboots, in stand-alone films and reiterations of dormant franchises, is a response to an industry under threat. The ‘reboot’, then, is not merely a marketing term. With the parent or original property acting as the exploratory product, ensuing instalments of the same franchise – whether they are prequels or sequels – exploit the market explored by the previous feature.

Following the Product Life Cycle Curve , a film franchise moves from Introduction to Growth, Maturity to Decline. If it is profitable – or if it has other values – it can be taken to Rejuvenation, which, compared to the creation of new products, is “simpler, cheaper, and faster, and offer(s) handsome returns.”

Determining which franchise is rebooted relies on a variety of elements. According to data publicly available, the decision to reboot a franchise is primarily but not solely based on the performance of previous products . Using regression analysis, section 5.5. shows the relationship generated between franchise and non-franchise films, using budget and US domestic box office figures, that suggests financial criteria for franchise rebooting.

Using the relationship shown in Graph A (page 33) of Franchise Vs Non-Franchise films, the relationships between fitted values and actual values for a series of franchise films is given, suggesting that financial success in relation to predicted success is potentially the strongest motive for rebooting a franchise.

Film, franchise, reboot, remake, Hollywood, risk management, sequels, rejuvenation, exploitation, exploration

William Goldman’s famous statement, “Nobody knows anything,” is unusual, given that he was referring to the American film industry that employs 2.4 million people and contributes $180 billion to the US economy annually. Hollywood has over 80 years of exploiting its resources and surviving depressions and recessions, making Tinsel Town an effective entertainment abattoir which wastes only the “moo”.

More than ever, Hollywood needs to diversify its risk. The moving image industry is in flux, with sectors of the market flocking instead to gaming, sports, TV and other forms of amusement. Disrupted distribution channels, demise of DVD sales and piracy are altering previously predictable revenue streams. New technology disrupts methods of distribution, lowering the threshold of production costs and changing required skills.

In 2003, over 25% of the US domestic box office was generated by sequel products – the first year in box office history that sequel earning had gone that high. Historically, films featuring the same characters or storylines were not considered to be of the same artistic or entertainment quality as one-off features made by auteur directors, however popular serials and feature film series such as The Thin Man of the 1930s were.

The purpose of this report is to show that the current Hollywood studio trend of remaking film series is a risk management strategy via product rejuvenation. This is examined and explained via J G March’s theory of exploration/exploitation and The Product Rejuvenation Cycle, as iterated by Berenson and Mohr-Jackson. Franchise films begin with a parent property as ‘exploration’, which, if successful, then enters its exploitation stage by releasing one or more films of the same franchise. From its phase of exploitation, the product will eventually reach a stage of Decline within the Product Rejuvenation Cycle. There, dependent upon how well the franchise performed, the product may be relaunched or rebooted, to beginning the same franchise for another generation of moving image consumers.

In industry context, a ‘reboot’ is defined as a film product renewed primarily by changing two factors recognisable to the audience: actor/character and change of tone. This design strategy allows the audience to enjoy a story/character/concept with which they are already familiar and to positively anticipate the novelty of new elements embedded within. There is, therefore, a strong argument through use that the term ‘reboot’ is not merely a remake but rather that it means something quite specific: a film product which retains some elements while jettisoning others yet one which remains identified with the same creative concept of its parent property.

The method of rebooting products – franchise or stand-alone – is a safety strategy designed to create a hybrid product that embraces only the best elements of its parent property. The reboot of a previously profitable franchise can rejuvenate previously neglected or unfashionable favourites into new entertainment product for both old and new audiences.


Gathering accurate data on the moving image industry is difficult: in a high risk-high stakes market, information is key to being competitive. Hollywood keeps its figures to itself, allowing box office to be reported and, sometimes, budget. For films of the past – in the 80s and before – budget figures are often not available. It is often the case that people involved with producing the film are not in possession of the actual budget figure. With films as recent as The Pink Panther 2, the budget was not readily accessible, reflecting the film’s relatively poor performance against expectation.

2.1 Box Office and Budget Data

The data obtained compares reported budget figures, where available, with United States domestic box office, with worldwide cumulative gross where reported. The data is restricted to box office figures as published online by the Internet Movie Database (, Box Office Mojo ( and The Numbers ( Reported budget information is generally estimated and is corroborated between sites where possible.

2.2 Reboot/Rejuvenation Criteria

This paper recognises a film property to be a likely but not exclusive candidate for film franchise rebooting (rejuvenation) if it has the following elements:

a) Episodes

The film product ideally has three or more episodes that are recognisably linked to each other; this includes prequels, sequels and trilogies. Two is the minimum accepted.

b) Earnings

The franchise must have earned a minimum of $200K USD in either worldwide cumulative or domestic box office. This ostensibly biases the data set by ‘picking the winners’, however, it is by examining popular franchises that one understands what elements comprise the best candidates for reboot success, given that franchise management is not without risk.

Historically the box office was a marker of success; it is still used today out of tradition and lack of other data readily available. In real terms of revenue streams, breakevens and profits, box office figures – United States domestic or international cumulative – are no longer the benchmark for total earnings of a film.

Two schools of thought exist on this. Dalecki sums up the first by saying, “Most media industry scholars and contemporary industry players regard domestic box office revenues to be the single best predictor of all follow-on ancillary revenue.”

This contrasts with the more muscular approach of Edward Jay Epstein, who, in his book The Hollywood Economist, points out,

“There was a time, around the middle of the twentieth century, when the box office numbers that were reported in newspaper were relevant to the fortunes of Hollywood…today, Hollywood studios are in a very different business: creating rights that can be licensed, sold and leveraged over different platforms…Box office sales no longer play nearly as important a role.”

Given that figures useful to an outside investor are closely guarded by studios and producers, box office figures are the only easily and consistently found indicator of success available across time for a large selection of films.

Budget figures are also problematic, coming with the proviso of being ‘reported’, i.e. they are what studios want released as information, rather than the actual figures. Reported budget figures for Tomb Raider, the 2001 adventure film starring Angelina Jolie, were $94million. The actual cost was purported to be $8.7million, as the final figure factored in distribution rights (pre-sales), international tax relief, and copyright sales to a tax shelter, output deals and other factors.

Reported budgets and United States domestic and international box office figures remain as an historical indicator of financial success. The reader should also keep in mind that the marketing costs for most films are at least its production budget once over. So, a film that is reported to have cost $70million to produce will cost that amount again to promote and market. There is some indication, especially in the independent film sector that this is changing as a realised strategy to keep overheads as low as possible.

c) Type of Release

At least 3 instalments of the film franchise have had theatrical release in the United States. Franchise instalments which have continued via DVD such as Pokemon and American Pie, or those which continue online such as Vegas Vacation, are not included for the sake of consistency in comparison. This is to feature actual franchises rather than films with one further iteration, i.e. sequels.

d) Running Time

At least 3 instalments of the film franchise are feature length, i.e. over 60 minutes in running time.

e) Stage of Process

Franchises fit the criteria if they have reboots in existence, in production, post-production or various stages of development. As films in development may or may not be put into turnaround or may eventually be abandoned, only films with relatively strong and recent media reportage are considered as probable franchise additions. While these reboots do not yet, in most instances have budgets, they will be considered as instances of the extension of the parent franchise if there is sufficient recent evidence of their development via media reports in the last year.


Remakes, Prequels, Sequels, Series, Trilogies, Franchises and Reboots

Currently, ‘reboot’ does not have a legal definition and is often derided as a trend word that may be replaced in a few years’ time with some other term.

To understand the idea of the reboot as a rejuvenation of a franchise, it is necessary to understand the agreement definitions of other terms.

3.1 Franchise – definition

As a word originally applied to fashion, fast food chains and sports teams, franchise applies to a series of films based on the same Underlying Material, produced in chronological story order or with a reference to that order; to events or characters in the previous instalment(s). A franchise can include remakes, prequels and sequels, as well as other terms (trilogy, series, episodes, etc). Its use contextually is described by Dalecki (2008):

“In Hollywood parlance a franchise film is any film title that is itself a sequel, or a title that has one or more sequels that follow from it—obviously, sequels are at the core of that which constitutes a film franchise.”

3.2 Prequel

Prequel is defined as a property based on the Underlying Material’s back-story that may or may not have been expressed within the Underlying Material itself or its original expression. A prequel is a work that must support a previous film with a chronologically earlier setting – and its popular use is credited by Steven Spielberg to George Lucas.

Prequels do not need to move the story forward in time and are generally produced after the franchise has gone dormant or is seen as offering less risk than an extending storyline. Prequels are designed to attract the fanbase of its franchise by offering new information about a story and/or a character with which the audience is already acquainted. An example is X-Men Origins, a latter part of the X-Men franchise, which essentially moved the franchise itself to prequels, i.e. back stories, about various characters. Other franchises prequels are Casino Royale, Hannibal Rising, Star Wars: Episode III and Exorcist: The Beginning. Ridley Scott’s Robin Hood (2010) is also a prequel, ending with the band of brothers coming together, poised for another film.

3.3 Trilogy

As a definition, ‘trilogy’ is used to describe series/franchises that terminates in three instalments, such as The Matrix. As more films find financial viability across three instalments, the term trilogy could possibly apply only to products where, either contractually or otherwise, the lifespan of the property is limited to only three instalments. The possibility of a remake or reboot of said property would create another trilogy, if complete, or prequel. Also known as a “three-quel”. Peter Jackson’s Lord of the Rings franchise could be defined as a trilogy, with the upcoming instalments of The Hobbit I and The Hobbit II as prequels, dependent on adherence to plotline in the source material.

3.4 Sequel

Sequels are products that follow, chronologically or logically, from the parent property. A sequel is legally defined as;

“…a new Motion Picture derived from an existing Motion Picture or its Underlying Material in which a character, event or locale depicted in the existing Motion Picture or its Underlying Material is shown engaged in or as the subject of substantially new and different events than those depicted in the existing Motion Picture.”

As noted, the substance and content of the sequel as hereby defined does not indicate a chronological sequence of storyline, character or location. The common use of the term ‘sequel’ does, however, suggest that there is a temporal or qualitative link to the previous film and that a sequel is indeed something that ‘comes after’ the parent property. According to the Compact Oxford English Dictionary, a sequel is a property which continues the story or develops the theme of an earlier one.’

3.5 Interquel

Not in common use, an ‘interquel’ is an instalment of a story which concerns events that occur between existing works, i.e. Star Wars: The Clone Wars is, strictly speaking, an interquel between Star Wars Episode II: Attack of the Clones and Star Wars Episode III: Revenge of the Sith. Fast & Furious is also an interquel between 2 Fast 2 Furious and The Fast & The Furious: Tokyo Drift. Arguably, Alien vs Predator, which exists in story time before Alien and after Predator could also be defined as an interquel. There are other terms such as midquel and parallel which are more in use with other entertainment media such as novels and computer or video games.

3.6 Remake

In the IFTA International Schedule of Definitions, a remake is defined as, “a new Motion Picture derived from an existing Motion Picture or its Underlying Material in which substantially the same characters and events as shown in the existing Motion Picture are depicted.” Stand-alone remakes such as Cat People (1982) and Cape Fear (1991) are clear uses of derivation from an existing property to create a similar if not identical storyline produced in a way to sufficiently differentiate it from its previous incarnation, in these instances made in colour rather than black and white, with different performers and advances in physical effects, sound and other production values. Remakes from one culture or language to another are also common: France’s La Cage Aux Folles became the American hit The Birdcage. Working Title Films is currently remaking the French hit Heartbreaker for the English-speaking market.

3.7 Reboot

The IFTA International Schedule of Definitions does not have legally accepted definitions of ‘franchise’ or ‘reboot’ in current use. However, these terms are employed within the moving image industry. In production, marketing and in the criticism and reporting of product description, identity and performance, the defining of these concepts can be understood as amalgams of the legal terms of Version, Work, Remake, Sequel and Underlying Material.

In agreement law, a reboot would follow as a form of Sequel, i.e.
“…a new Motion Picture derived from an existing Motion Picture of its Underlying Material in which a character, event or locale depicted in the existing Motion Picture or its Underlying Material is shown to engage in or as the subject of substantially new and different events than those depicted in the existing Motion Picture.”

Within this standard contractual definition, ‘reboot’ is, in legal parlance, redundant. However, a reboot is understood in industry vernacular as a remake of an existing work that is substantially different from previous incarnations and when applied to franchises, “only applies… where they take it in a different direction… completely re-imagined, rather than a remake, which simply tells the same story again.”

As both remakes and reboots are structured from Underlying Material, it is useful to consider a tenet of Philosophy of Identity – the notion of essential identity, i.e. what makes something what it is.

If a remake of The Hulk included the fact that he was no longer green, as he is in the original source material and previous films, but Avatar’s Nav’vi blue, that calls into question the essential nature of what makes The Hulk in fact “The Hulk”. It is vital to determine what can be altered in a remade property without making its particular character/brand unidentifiable by consumers. Further investigation into which elements can be changed within a franchise concept would be beneficial to define franchise development and protect the franchise from changing too far from its identity.


The reboot as a term takes its genesis from the digital world, suggesting a cessation of one instance of function and a new start to a session of functioning. One dictionary definition suggests the name comes from ‘bootstrap’, i.e. “a technique of loading a program into a computer by means of a few initial instructions that enable the introduction of the rest of the program from an input device.”

Using the bootstrap definition as an analogy, a film franchise reboot is an original film product that has spawned any brand extension (either sequel or prequel) and is remade [rejuvenated] into a substantially different or continuing storyline. The attraction of perennial successful products implies that popular characters and stories will find new iterations almost indefinitely, taking the franchise from Maturity and Decline to Rejuvenation.

The current use of reboot does not preclude the existence of other ‘reboots’ before the term was in popular use. For example, the media referred to Tim Burton’s 1989 Batman as ‘the “modern” era’ Batman , contrasted with the original Batman (1966) that was originally planned as the pilot film for the TV series. Burton’s Batman was not, however, considered a reboot as is Christopher Nolan’s Batman Begins. Yet both adhere to the idea of a reboot as a new imagining of an old story/character, produced in a visually different style/form from previous incarnations. In effect, Burton’s Batman is just as much a reboot as Nolan’s.

In the same vein Star Trek as a film franchise has been rebooted twice, with a fifteen-year hiatus in between. King Kong was made in 1933 (including a sequel in the same year), 1976, 1986 and 2005. With the exception of King Kong Lives (1986) that has a radically different storyline, each of these films is a remake, while being part of the overall franchise concept of King Kong. Star Trek rebooted with a change in crew and tone in the 1990s, and again in 2009. King Kong is the same story, excluding King Kong Lives, remade [rejuvenated] across generations.

Within the parameters of the film industry, a reboot signals that a series may have reached its commercially viable end within a Product Life Cycle. The franchise James Bond’s cycle of Sean Connery playing the ace spy ended when Connery no longer wished to play the character, passing it onto another actor. As the longest-running film franchise currently in production, the James Bond series is perpetually rebooted by a change of main actor and of the fashion of filmmaking at the time, supporting the empirical evidence that rebooting entails changes of lead actor, tone, pace or locale.

As an exercise in how to reboot without alienating an audience, the currently popular UK TV series Dr Who features a title character reborn as a different human form (i.e. a new leading actor) whenever it suits the production. This storyline has renewal [rejuvenation] built into it ever since the original Dr Who (William Hartnell) took ill and needed to be replaced: in essence, Dr Who reboots itself. (In other areas of entertainment, this rejuvenation is also built in to ensure a new audience, i.e. in the case of Crisis on Infinite Earths by DC comics where famous characters are killed off and brought back in other forms.)

Examining the concept of the ‘reboot’ shows that within the more intuitive and theoretical aspects of producing, marketing and distributing remakes of known film franchises with recognisable characteristics, the more familiar the property can remain to consumers, the less risk (the more predictability) the studio or producers should incur. This provides a known product, parts of which are also unknown and new. It is the reboot that keeps what is recognisable while reintroducing the product to an old and/or new market. Reboot is not, then, merely a marketing term but a precise definition of a product which rejuvenates its brand.

4.1 The importance of perceived differences

An important distinction in any given reboot is its relation to its parent property as perceived by the audience. Moviegoers are generally unaware of the work of writers, directors or producers involved with the production of a film. Few seek out products because of a key player behind the camera. Unlike the old days of Hollywood, few consumers have an allegiance to a particular film studio or company; notable exceptions are those makers of family entertainment such as Pixar, Disney or Aardman.

Familiarity with the franchise concept (a popular game, book, comic book, character, etc) is a strong attraction for moviegoers. The headlining actor is the obvious pull for many dramas and adventure films and the fact that a particular actor is starring in any given property lends it credence, as the audience believes that that actor’s participation is a guarantee of quality. Other attractions are an appealing storyline, special effects, novelty (3D) or in the case of Avatar, all three.

It is arguable then that for a film to be a reboot, the audience must perceive a difference in this instalment of the product in contrast to previously known and associated products but not to change in an alienating way. This suggests that two main variables for a reboot are tone and/or cast: tone being a directorial style, mood, special effects or location and ‘cast’ being the headlining stars.

“A central concern of studies of adaptive processes is the relation between the exploration of new possibilities and the exploitation of old certainties.”

J. G. March’s breakthrough paper, “Exploration and Exploitation In Organizational Learning,” suggests a model of inquiry and utilisation which can function as a method or strategy of risk management in the moving image industry. If the stand-alone, first or parent film/property is part of the ‘exploration’ of new opportunities in a market, the subsequent sequels and/or instalments are designed to ‘exploit’ the territory explored by the parent property. If the original parent product is successful (i.e. it earns back its production and marketing costs along with reasonable revenues), it will be seen as having ‘explored’ its sector successfully enough to warrant further exploitation via a franchise.

5.1 Overview of Film Franchise as Exploration-Exploitation Strategy

Expanding the earning capacity of a previously popular and successful property is an adaptive process well known to filmmaking and to other art forms such as music and theatre. Early in Hollywood history, the studios’ ‘transforming capabilities’ – the ability to employ a system by which disparate elements such as actors, set designers, lighting experts and writers are fully utilised to create a successful film product – were such that leading players and talent were lengthily contracted to the studio. This availability meant that talent was used repeatedly and often in a filmic serial format as shorts, special features or longer programmes. Fictional characters such as Andy Hardy, Bulldog Drummond, Superman, Tarzan and Sherlock Holmes became brands – recognisable to the movie-going audience, and therefore considered as near to a ‘certainty’ as one could imagine, with endless storylines and endlessly fascinating characters played by stars for a captive audience with fewer entertainment outlets.

Notably one of the earliest series/franchises, the Ma & Pa Kettle series – a franchise which ran from 1949 every year until 1954 – came from the film The Egg And I and became a film series in its own right due to popular demand. Another early series, The Thin Man and its consequent sequels were similar in tone, cast and theme yet still lost its potency with audiences over time. Without an obvious extant concept of creating franchises as exploratory/exploitative properties, film series in that era were not marketed as they are now. Also, it is arguable that stand-alone films were the rule. Their costs and risks were lower; quantifiable distribution models suggested a predictable audience. Stand-alone films lent the notion to the consumer that film was ‘art’ or ‘entertainment’ rather than ‘business.’ Few franchises are considered ‘art’ .

5.2 Genre and Quadrants

The most successful franchises are those with a historical [explorative] advantage, exploring a previously unexploited entertainment market sector within its culture. One of the longest running film franchises, James Bond, with 23 films currently attributed to its franchise and an average worldwide gross box office of $220m, can link its success to a unique set of elements:
1) a historical advantage [exploration] in beginning the series as a frontrunner when there were fewer such films
2) a series of popular books upon which to base its scripts and
3) a template of sex, danger, invention, comedy, exotic locations, secrecy and triumph over evil.

The Bourne, Jack Ryan, and the Austin Powers franchises owe much to the road laid down by James Bond. Similarly, the success of Star Wars could be attributed to its unique exploration of outer space adventure, ingenious model-making and mythic storylines as well as unusual characters. The popular Peter Jackson Lord of the Rings trilogy is continuing with The Hobbit 1 and The Hobbit II.

Appealing to a sector of the population is a vital part of film marketing and sales, but also of development and production. While stand-alone films such as The Notebook may attract [explore] an older demographic who may come from a culture when ‘going to the pictures’ was one of the few special entertainments of the era, most franchise films cater to [exploit] the younger quadrants of the consumer society who have more disposable income, time, may have less private space to themselves and also have the need to socialise and participate. The most successful franchise films appeal, or aim to appeal, to the widest possible audience.

Genres such as spy stories, police adventures, outer space dramas, the supernatural, comic heroes, robots, vampires, heist plots, horror, pirates, monsters and soldiers, among others, vie with the family movie as a franchise which caters to the widest possible audience of the family unit, accounting for the success of franchises Ice Age, Shrek, Toy Story, Home Alone, Spy Kids, Rugrats and Karate Kid among others.

Table A :

The family film franchise covers the four basic quadrants of the movie-going audience: it appeals to old and young, male and female, or more precisely ‘males older than 25, females older than 25, males younger than 25 and females younger than 25.’

While all films attract one or more marketing quadrants of age and sex, the family film, if successful, has the probability of attracting all four quadrants. Hence, of the potential-reboot franchises analysed, twelve are family genre titles. Eliminating negative choice, providing ‘safe’ entertainment and being a reliable known quantity give the family film franchise less theoretical risk and a higher probability of repeat consumption – especially given the cost of going out, childcare, travel and other considerations. A small but not irrelevant revenue stream for the family film franchise is the need to repeat purchased popular titles, as parents become repeat consumers of titles they owned previously and must replace through technological change (VHS to DVD to Blu-ray or HD) or wear and tear.

5.3 Synergy

The term ‘franchise’ in reference to film products was popularised in the 1980s, initially to indicate synergy with merchandising, product placement, theme parks, clothing, fast food outlets and other revenue streams; “Top decision makers within contemporary media conglomerates understand that every piece of media under the same brand-umbrella promotes every other piece of media under that umbrella.”

Vital as these revenue streams are, the strength of their ability to generate profit remains reliant on the quality of the franchise – not only of the film product itself, but also in its marketing, sales and distribution in other forms. Saw IV, a latter instance of Liongate’s Saw series, earned a total of $30m in DVD sales , supporting its $728m overall franchise box office revenue, as set against an estimated total franchise production budget of $46m.

The percentage of profit generated by synergy is considerable. For example, Schatz (1997) makes the case that,

…[F]ilm franchises such as Jurassic Park comprise a profitable product line and a cultural commodity… It also indicates that the industry can scarcely be treated in terms of movies and videogames and theme park rides as separate entities or isolated media texts. Rather, they are related aspects or ‘iterations’ of entertainment supertexts, multimedia narrative forms which can be expanded and exploited almost ad infinitum, given the size and diversity of today’s globalized, diversified entertainment industry.”

Led by synergy, a franchise is, ideally, the strategic aim of every film released, even if that strategy is not ultimately possible or probable.

5.4 Exploration Without Exploitation

From a studio standpoint, franchise films are mechanisms of risk management in that they are, as a group, familiar to
consumers of filmed content, and have more opportunities at marketing and synergy schemes to bring in extra revenue. As an overall entity, a franchise also has the potential to be rejuvenated/rebooted at a future date as a new iteration of the same franchise concept.

Within the concept of exploration and exploitation, March suggests that, “Adaptive systems that engage in exploration to the exclusion of exploitation are likely to find that they suffer the costs of experimentation without gaining many of its benefits” This gives insight to the idea of the single, stand-alone film which has not been considered as potential franchise property and is, therefore, not designed to be extended over one or more feature films. Part of exploitation begins in exploration: a stand-alone film ‘explores’ but may not be able to fully ‘exploit’ the audience it attracts; synergy will help support exploitation of its market, but that synergy will be limited to the film’s one-off status.

Intending to start a franchise is not sufficient impetus for it to obtain or, once produced, for it to be profitable: finding suitable product for the market at the ‘right’ time is therefore the onus of the franchise as well as the stand-alone film. If an original film does not make sufficient returns, the probability of continuing to a franchise cycle is reduced. This holds true even if the original property is designed to have a sequel or more instalments (there are exceptions ). Doctor Detroit, The Rocketeer, The Adventure of Buckaroo Banzai Across The Eighth Dimension and Godzilla are franchises that were planned – and in many cases packaged with games, marketing and spin-offs attached – but which did not achieve expected box office success to continue the franchise.

A balance between exploration and exploitation is essential for successful franchise properties to fully exploit their potential. Although most prediction is based on past data, harkening back to lessons of the past is often not effective in filmmaking, where changes in market, climate and trend can help or hinder success. That Avatar, for example, has been phenomenally successful is not only due to groundbreaking technology in visual effects, but also in marketing. For example, Avatar had no fewer than one hundred versions to distribute throughout different markets . Its environmental message was well-timed [exploitation], meaning that those involved in the production of Avatar accomplished, “[e]ffective selection among forms, routines, or practices [which] is essential to survival, but so also is the generation of new alternative practices, particularly in a changing environment.”

5.5 Franchises and Revenue Generation

There have been many attempts to correctly predict film revenues. Best current practice has comparisons to similar films in similar genres, with release dates, stars and competing leisure interests across all entertainment media. Hennig-Thurau suggests that the variables for predicting the revenue of a single sequel are quantifiable, also that the worth of brand extension goes beyond typical tangible costing, adding an extra factor in valuing film property adequately. Chosen determinate variables are budget, rating, opening weekend theatres, stars power, cultural familiarity and genre – and the extensions of those variables to the sequel.
“Our analyses … suggest that for motion pictures, a brand extension provides two key advantages over an equal but original new product… Sequels generate higher average revenues than nonsequels…

As a second advantage, and of equal importance for
brand extension valuation, the prediction accuracy measures indicate that there is less risk when investing in a sequel than in an original new movie. Although there is no statistical test to empirically compare prediction accuracy across regressions, the differences in prediction accuracy are practically meaningful.”

Hennig-Thurau’s report suggests two ways that sequels can be more financially viable than single-issue film properties but notes that his analysis cannot extend beyond the primary film and its sequel because there are not enough samples upon which to base his model. He says:

“…our approach focuses on initial sequels and does not address the effects of additional sequels (e.g., Spider-Man 3 and Spider-Man 4). The success of an initial sequel has a substantial impact on the value of additional sequels; for example, the big-budget Remo Williams: The Adventure Begins was intended to become a multimovie series similar to the James Bond franchise, but the idea was discarded after the original flopped. Thus, extending our model for additional sequels would require consideration of the relationships between the additional sequel and the original sequel and among all further sequels, which implies a level of complexity that is difficult to model because of the small number of multiple sequels.”

If sequels make less money than stand-alone projects, sequels’ manage risk better. If a stand-alone project makes $20M but the range [of revenue] is -$50M to $150M, and an average sequel makes $5M but the range is -$5M to $50M, risk of revenue loss is less. Research shows that budgets are strongly correlated with revenues. “When it comes to sequels, it is easier to get bigger budgets because earlier performance is used as data on the basic risk of the project.”

Graph A shows a selection of films released between 1995-2009. This comparison between franchise films (red line) and non-franchise stand-alone products (black line) generates a relationship between each group, using estimated reported budget data with US box office figures (gross). The graph shows that franchise films cost more but earn more in a direct relationship to their stand-alone counterparts.

Graph A .

Graph A shows the relationship between franchise and non-franchise films released between the years 1995-2009 inclusively as determined by budget and US domestic gross. In the following Graph Series B , this relationship is shown between predicted box office and actual box office, with the former in blue (fitted values) and the latter in red (US Gross or actual earnings, i.e. what really happened).

For example, even with only two films in its franchise, Deuce Bigelow: Male Gigolo, with a budget of $18m, generated a US gross of $65.5m, well out of alignment with predictions. Its sequel, made for $22m, grossed $24m, suggests that there will be no Deuce Bigelow 3.

Similarly, there will be no reboot of the Ocean’s 11 franchise, but not because the main players are no longer interested:

Harry Potter outperforms expected fitted values:

Final Destination franchise shows strong performance as do parts

3 & 4 of the Die Hard franchise. Both go beyond fitted value projections.

The Bond franchise is a consistent performer until Quantum of Solace:

The fitted values of the Batman and Bourne franchises are profitable and therefore worthy of their reported upcoming reboots/continued iterations:

New Line Cinema have restarted the profitable Austin Powers franchise:

A selection of thirteen franchises is shown in Table B. These franchises have been chosen as the optimal franchise selection, i.e. they are or have been successful series. The thirteen are franchises currently in mid-reboot (where the franchise has been rebooted and is in development for a sequel to that reboot) or are in development for rebooting. The average estimated reported budget and average worldwide box office grosses are shown, along with the number of iterations, the state of the rejuvenation/reboot cycle and the franchises’ stage in the Product Life Cycle Curve.

Table B

Alien 5 44.6 175.2 Reboot Intro
Batman 6 112.5 437 Rebooted Growth
Bev Hill Cop 3 28 237 Reboot Intro
Bourne 3 81 314 Reboot Intro
Friday 13th 12 48 172 Rebooted Growth
Halloween 10 32 37.7 Reboot Intro
J Ryan 4 51 194 Reboot Intro
Spider-man 3 199 831 Reboot Intro
Spy Kids 3 37 166 Reboot Intro
Star Trek 11 46 132 Rebooted Growth
Superman 5 87 173 Reboot Intro
TMNT 4 23 104 Reboot Intro
Terminator 4 127 350 Reboot Intro
Budget & WW gross averages:
70.46923077 255.6076923

The average budget of these rebooted/rebooting franchises ($70.46923077 million USD) is in line with current budget costs of four years ago , suggesting that franchise costs can be much lower than stand-alone products.

Of the 669 films released in 2009, earning a gross box office revenue of $10,645,974,384.00, with an average earning of roughly $15m per film (10 645 974 384 divided by 669 = 15 913 265.1) . Franchise films currently rebooted or rebooting have earned on average $255m in worldwide box office with $103m at the US box office. Clearly, the earning capacity of rebooting a mature franchise is a profitable endeavour.

5.6 Determinants of Franchise Selection
“We believe in developing and creating franchises, but with one major caveat — we never lose sight of the ball economically.”

Out of the top ten worldwide highest-grossing films of early 2010, only one of those films – Avatar – was an original motion picture rather than part of a franchise or based on a story from another medium (books, comic books). Of thirty top grossing films, only three were concepts designed as a unique film product. Irrespective of its source material, a successful film product can become a franchise parent property, and earn revenue streams through ancillary outlets such as TV or cable broadcast, or by synergetic use as basis for a computer game or theme park feature. Film series morph into TV series or vice versa.

Of the twenty films represented in the inflation-adjusted list of the top twenty movies released since 1977, four – Titanic, Avatar, Forrest Gump and Independence Day – are not part of a franchise.
Table C :

Films designed to be single entities are often made from non-filmic sources, i.e. games, books, etc, which may already exist in a format that facilitates a franchise: buying the rights to the Harry Potter books encouraged planning the films as a franchise, dependent upon the initial film’s success. While pre-existing serials in non-film forms may be conducive to film franchise development by offering ready-made structure and stories, this does not insure franchise status. The single criterion for any film to become a franchise is revenue.

A much-heralded feature film of 2003, Master And Commander, director Peter Weir’s epic based on author Patrick O’Brian’s multiple-book Napoleonic war series was reportedly planned to be a franchise. The Master And Commander book series was strong material for a film franchise with an action-oriented leading character, his likeable, intelligent and vulnerable best friend and ship’s doctor, the derring-do of war at sea and a wide sampling of supporting male roles from young children learning a career to the ship’s grumpy superstitious old cook, Killick.

A bankable star Russell Crowe, an experienced director in Weir and a stellar cast – along with authentic period ships and credible battle scenes and effects – could not save Master And Commander. Glowing reviews by national critics (pre-Twitter) couldn’t either, even with A O Scott gushing in the New York Times, “hums with humor, passion and life. It makes you wish Napoleon were still around, so we — that is, I mean, the British Empire — could beat him all over again.” Master And Commander is a stand-alone product. That it was designed to be more is indicated by one source’s report that actor Paul Bettany was contracted to do two more episodes while main player Russell Crowe was not.

The problem with Master And Commander was earnings. With a US domestic gross at $93m and an international gross at $115, its worldwide cumulative gross box office of $209m was not enough, given a reported budget of $150m, to warrant a franchise – even with $15m in DVD sales. Similarly, the youth-oriented Stormbreaker (2006) was eagerly awaited as a franchise property, given that is was based on a series of eight popular schoolboy-spy novels. From a $40m budget, Stormbreaker’s worldwide gross was $23m.

Profitability of the first film is primary for franchise creation and, to take an analogy from the music industry, the sequel to any original hit is akin to a successful band’s ‘difficult second album’. To become a franchise, films need to be initially successful, with at least a moderately successful sequel, leading to a similarly profitable third instalment. Currently mooted are franchise possibilities for Kick-Ass (2010) and How To Train Your Dragon (2010). The British Kick-Ass, a violent comic book-based black comedy costing an estimated $30m USD has earned $67.7m USD worldwide and is being scrutinized as a franchise parent property that has a sequel-ready ending . Not every film needs to have the earning speed of Avatar. DreamWorks has announced a sequel to How To Train Your Dragon (estimated production budget $165m USD), an animated 3D feature that has had a slow but lingering presence at the box office (US domestic box office $43.7m and worldwide cumulative $374m).

A recent surge in interest in new franchise properties has drawn more attention to dormant franchises. Previously unconsidered properties are being remade and rebooted into new franchise starters. This quest to limit risk has reached new levels, with reports that hit films of previous generations are in remake/reboot development . Private Benjamin (gross box office $4m, 1980), Fright Night, The Thing, Police Academy, The Hitcher and RoboCop, among others, indicate Hollywood’s realised strategy to be more synergistic and risk averse as their preference for sequels and series promise to deliver a more predictable product in an environment with uniquely uncertain variables.


The cycle of any product has four parts: Introduction, Growth, Maturity, Decline. (Graph D)
Graph D.

Films have a shorter product life cycle, within cinematic release, than most consumables. Film franchises are prime examples of the product life cycle curve, with the parent property being the Introduction of the franchise concept, the sequel leading to the franchise’s Growth phase, and further instalments continuing to Maturity and Decline. In the last two phases, box office receipts are less than predicted and critical and fanbase support wanes.

Critically and aesthetically, the film franchise is not noted for original content, coining the term ‘sequelitis’ to represent the preponderance of film franchises among releases since 2003, the first year that saw a quarter of the United States domestic box office generated by sequel properties.

The investment, expectation and risk attached to a franchise’s parent property can inhibit take-up among consumers at the Introduction phase of the franchise – and can add a level of audience cynicism. This is due, in part, to the difficulty of sustaining a high enough standard of character and story over a series of feature films. It also reminds audiences that film is not art but business, not something any marketing specialist wishes to emphasise. Additionally, in the current climate of 2010, word of mouth via social networks such as Twitter, Facebook and other sites are seen as, if not supplanting the critic, adding an additional element of immediacy to the quality of a film. Whether a certain release is worth consumer attention or not – and why – can be and is reported instantly, within minutes of the consumer viewing the product.

While franchise films may be easier to market in terms of conceptual content – easier to build up anticipation among consumers with teaser trailers and star appearances, etc – repetitive film products are often cited as lacking creativity, being formulaic and/or effects-heavy and light on plot or innovative story-line. All of these elements can inhibit the Growth and Maturity of a film franchise product, trigger immediate ‘bad word of mouth’ which sends it prematurely to the phase of Decline. Police Academy showed waning box office revenues as the franchise progressed through its seven instalments, even though it retained most of the original cast and characteristics of its parent property.

Consumers are more aware of franchise concepts, making earnings expectation from a franchise film high. Following a formula of characters, actors, tone and concept does not guarantee continued success. Part three of one of the most successful franchises yet, Spider-man 3, suffered from a bloated plotline, too many characters and too much reliance on special effects, all of which can lead a franchise prematurely through Growth and Maturity phases straight to Decline.

While Iron Man’s and Spider-man’s quality was reflected in high box office and DVD revenues, consumers rated their sequels lower than the parent property. This implies that Iron Man 3 will need to be as close in essential qualities to the parent property. This is also why, outside of reported departures of its main star and director, Spider-man 4 is past Decline stage and into Rejuvenation; the franchise is too profitable to lie dormant as shown in Graph E.

Graph E:
Comparing Spider-man franchise budget, domestic & ww box office
The rejuvenated franchise must recapture certain essential identity elements throughout its sequels to maintain continuity. Often, in order to revive the franchise, rather than reboot it, changes are made within the sequence of films that do not add maximum value to the product. Franchises often fail in terms of quality (in story, production values, distribution, marketing) which means they cannot maintain and/or gain a sufficient fanbase to survive. Hence, the franchise as a concept is often seen as an omen of Hollywood’s bankrupt imaginations: this happens more frequently as or when a franchise weakens in its ability to draw an audience and often attracts critical and fanbase backlash.

In terms of exploration/exploitation, ‘the balance between [the two] is a primary factor in system survival and prosperity” given that a franchise must continue to explore for new ideas and themes to exploit within its parameters.

The risks inherent in filmmaking are not only those of content, i.e. the story as a stand-alone entity. The variables surrounding a film’s marketing and distribution are mutable and unlikely to adhere to any previous example, however similar. Even the most well-known franchise instalment could lose millions if its release date is not optimized or the weather is poor for cinema attendance . Unforeseen elements (main actor in a scandal, main actor dying, real world event mirroring film event, etc) affect a film’s box office gross, DVD sales and other revenue streams.

The ways in which film franchises optimize studio resources are via [exploration] such as cultural familiarity, genre, synergy, spread of story content, forward planning for sequels (and therefore planning for marketing overall). Rebooting plants the concept with generations of film consumers that the franchise. When that takes root, the franchise and its reboots can generate revenue from many different income streams, possibly across decades, as in the case of Star Trek, Star Wars and other long-lived popular franchises which either maintain box office revenues or find a way to absorb less than successful instalments of the franchise through other revenues streams.

6.1 Reboots As Franchise Rejuvenation Strategy
One previous economic theory stated that sequels are ‘worse’ than their parent properties. However, the structure and planning of franchise films has changed; they are no longer individual films made after an initial success without forward planning. Rather, they are now made as one film story with its exposition spread over a series of film-length episodes, which themselves may function as stand alone products:

“We are not really talking about sequels any more. We are talking about films that are conceived of as longer plays than one film… You are saying to the audience: ‘This is a story, you have got to stick with it.’ You buy into that particular number of films that will be coming out.”

A sequel or episode of a franchise film is also a substantive product that further exploits spill-forward, i.e. that any episode of a film franchise engenders viewer familiarity to the entire franchise. This stand-alone quality within a franchise film series adds further value and manages overall risk in the franchise itself. The benefits of the franchise as a product are complex and valuable, hence the value in rebooting the product as rejuvenation.

According to Berenson and Mohr-Jackson , there are five strategies which help to determine how to rejuvenate a dormant or declining product. All are applicable to film franchises and support the idea of the reboot as product rejuvenation.

Graph F: The Product Life Cycle Curve Rejuvenation

1) What are the reasons for the product’s demise? Berenson and Mohr-Jackson suggest resource constraint, poor management and limited product value as three examples – all three of which fit the newly rebooting franchise of Beverly Hill Cop. film’s main resource (Eddie Murphy) was in a career low, with the film being panned by critics and denounced by its star. Poor management of the franchise is also a contributing factor, with the storyline seeming flabby and tired, making Beverly Hills Cop as an overall concept one of limited value.

2) Is the macro-environment conducive to a rejuvenation strategy, i.e. what is the product’s perception with its consumer and can that be altered or exploited? One example could be to make a scary film such as Godzilla or King Kong more suitable for children. Horror films tend to be less about horror and more about being a date movie, with the violence being more cartoonlike. In the case of Fantastic Four, rebooting is the opportunity for the studio, “to try again and make the movies they should have produced in the first place.” Even with a mediocre performance in two instalments, the Fantastic Four franchise’s earning capacity outstripped predictions. Graph G: Fantastic Four Values

3) What does the product name say to its audience? For the Naked Gun series, the titles remained silly and fresh, indicating to the audience that the original comedy spirit had been retained.

4) Explore potential market segments, including strengths and weaknesses of direct competitors. For example, the most recent of Star Trek’s reboots, Star Trek (2009), was released in the same week as X-Men: Wolverine, which had been leaked online and performed less effectively than expected. Graph H: Star Trek Values

Graph I: X-Men Values

5) Rejuvenate the product by adding value. This strategy was employed by the Predator and Alien franchises – and much earlier in Japan’s Godzilla franchise of the 1960s. In fact, Godzilla has appeared in 28 films between 1954-2004.

6) For example, the horror franchises of Friday 13th and Nightmare on Elm Street combined forces by creating a film that embraced both franchises, merging fanbases and giving audiences extra value which was reflected in a much higher box office (Graph J).

Graph J: Comparison of budgets and box office for Friday The 13th.

New products are not only costly to develop but also have a novelty factor attractive to management (Berenson & Mohr-Jackson, 1994). Considering the risks involved in product development, Hollywood’s trend of franchise rebooting proves the idea that, “product rejuvenation strategies are often simpler, cheaper, and faster, and offer handsome returns.”

“Financially, relaunching a franchise from scratch can also generate more revenue. Sequels generally earn 30% less than the first pic, so it makes more sense to start over and produce a series of films based on a reboot. The original “Clash [of the Titans]” earned $41 million during its entire domestic run, not taking into account inflation; the new version earned $50 million in its first three days.”


For enduring continuity and loyalty of an audience to a film franchise, the essential properties of identity must be present in all instalments of the series. However, to exploit the franchise, rejuvenation is essential but not rejuvenating beyond the essential properties of the parent property.

“To continue the computer parlance, are instances where a franchise…has started to crash, and a radical restart is needed… Reboots usually involve fresh casting, and radical rethinks of the tacks and tones to take and adopt.”

The alterable elements must be separated from those that are immutable. The changes applied during development, production and marketing of a film franchise must keep in close association with the parent property yet maintain a unique position within the franchise as a whole.

7.1 Change of Lead Actor/Character

Many, if not all, franchises are in some way actor/character reliant. Crocodile Dundee and Dirty Harry have become dormant properties due to age or waning appeal of the central character identified exclusively with actors Paul Hogan and Clint Eastwood. Austin Powers, Beverly Hills Cop, Die Hard, Rambo, Rocky, Harry Potter, Home Alone, Lethal Weapon, Mission Impossible, Ocean’s 11, Pirates of the Caribbean and others rely on a particular actor or actors to keep a story/franchise continuity.

A franchise losing its main actor – as in the case of Matt Damon leaving the Bourne franchise – does not imply that those properties will stay dormant; they can be rejuvenated when a new star takes over the role. A change of lead actor is the primary component in a franchise reboot. There are few exceptions of franchises keeping a lead character played by different actors, although this happens often with supporting characters such as Bond characters M, played by four actors and Felix Leiter who was played by nine different actors throughout the franchise. A change of all or most of the cast is also a key indicator of a reboot (Star Trek).

Exceptions to this rule are found to be built-in to the franchise itself. James Bond is essentially rebooted with every change in leading actor, but the underlying essential properties of identity that maintain the franchise remain intact, giving the franchise continuity and novelty. In the same way, UK television franchise Dr Who has as its underlying essential properties of identity a built-in reboot which functions as a continuity feature. When the original star of the series reportedly fell ill, another star was brought in to replace him. This was acceptable to the show’s fan base as one of the more original underlying essential properties of identity possessed by Dr Who as a character was that he regenerated, i.e. he grew younger and often behaved differently that he had before.

The changes in the actor who plays Dr Who or James Bond can alienate audiences unless the franchise uses the change in leading actor to counter the disassociation between a film franchise’s previous and potential audience. Even with this essential property of identity – that the doctor regenerates, i.e. becomes another actor who portrays the character albeit in his own way – there is evidence that audiences were bemused by this trait within the doctor’s personality. BBC archive documents show the BBC’s Audience Research Department as recording comments such as, “Once a brilliant but eccentric scientist, he now comes over as a half-witted clown,” said one viewer of Troughton’s new role, and a more damning, “My two boys aged four and six were distressed about the change of Dr Who. They were very excited by the episode, but hope the Doctor will change back again next week.” Developing an enduring character that is regularly portrayed by a different actor risks audience adherence to the franchise as a whole.

One of the earliest serialised characters – a mainstay for all film franchises – Bulldog Drummond was a template for film franchise heroes which followed as well as an illustration of how earlier franchise films failed to take account of ‘franchise essentials’, i.e. elements which are immutable to product identity. The leading protagonist in Deadlier Than The Male (1967) was based on the cartoon hero Bulldog Drummond. Although the leading character is called ‘Bulldog’ Drummond, he does not possess identifiable elements that associate his character with what the movie-going public recognises as Bulldog Drummond as presented in previous products. In Deadlier Than The Male, the leading character’s differing back-story, personality and profession alienated the film from its intended audience, disassociating the film with any previous Drummond-based products.

What emerged from Drummond’s previous success were the elements that helped to make James Bond one of the longest lasting and most profitable franchises worldwide. Bulldog Drummond as a dormant property: James Bond, Bourne, Die Hard and other properties usurping its market opportunity.

A radical permanent personality or image change in a recognised character may risk disconnect with the franchise’s previous audience. This is because the ‘package’ of actor/character/franchise is of a piece in value in the eyes of the consumer.
7.2 Optimising Association With Parent Property

Relating the sequel, remade or rebooted product to the parent property associates the ‘new’ product with both an old and new audience. If sequels and instalments change too far from the original property, the product will go into Decline as it is not part of the continuum of the parent property. Often, and especially if a project ends up in turnaround with another studio, subsequent remakes and instalments will refer directly back to the original property without reference to previous films with the same underlying source material. King Kong and Godzilla are two examples of these phenomena. Both stories were created for film and have been remade in many forms, many times. The most recent version, Godzilla (1998), with an estimated $130m USD production budget and $376m worldwide gross box office, intended to relaunch the franchise by presenting itself as a direct sequel to the 1954 movie, ignoring any previous films but still accepting the original film as canonical.

With a successful reboot such as Star Trek, association with the parent property attracts older fans and lends a sense of completion and quality to the product for younger viewers (rejuvenation). Leonard Nimoy appearing as the older Spock in the 2009 reboot gave the new franchise a link with the parent property, which itself stretches back to the 1960s cult TV show, which also starred Nimoy. The association with the parent property reminds the viewer that the franchise is itself linked with the qualities that made the first instalment of the series so successful. Straying too far away from that association, either temporally or through content, is more likely to send a product into a premature state of Decline in its life cycle.

7.3 Temporal Proximity
The definition of ‘rebooting’ cited by The Hollywood Reporter – “thawing out a dormant film franchise after years in deep freeze” – does not suggest a visual change to the franchise, only a temporal one. The duration of dormancy within film franchising will become shorter, as franchises come about by design. Boosted by sufficient parental property revenue, it is probable that the time between the release of the original property and the optimum time to reboot the concept will become shorter; in fact, a brief time between reboots may become the norm. Applying the Wickelgren Power Law, a theoretical equation of forgetting, the larger the time lapse between an instalment in a franchise and its original parent product, the less success is predicted.

However, to achieve an optimal time between original parent property and its sequel, as well as between sequel and its third instalment, is difficult to quantify historically. Horror franchises such as Halloween release new instalments every one or two years. Running with lower budgets and domestic-centered release schedules, Halloween’s average estimated reported budget over the entire franchise run is $32m with a worldwide average gross of $37m across the franchise, including its reboot in 2007. Other franchises such as Bond, Friday 13th and Star Trek have similar consistencies, leaving only a few years between features before the next instalment is released. The risk is that the franchise will saturate the market, pushing consumers to other films or other forms of entertainment. Conversely, leaving the franchise dormant too long runs the risk of missing subsequent generations within its fan base. In this way, deciding when to reboot could be seen as a type of product repositioning, changing both the product and its target market.

An important area of ancillary revenue concerning release timing is to enable audiences to acquaint or reacquaint themselves with a missing franchise instalment. Many moviegoers can now download or purchase previously released feature films to view either before they watch the new release or afterwards. This timing increases awareness with spillover both ways: forward to new sequels and instalments as well as backward to parent properties.

“In addition, our results suggest that the release of complementary brand extensions causes consumers to reappraise parent brands (or at least increases their salience), and thus managers should refine marketing strategies to facilitate reciprocal spill over benefits.”

With an estimated average of nineteen years between original parent property and a new reboot , the idea of producing and marketing a film product to several generations familiar with it maximises familiarity with the product [exploration] while ensuring more audience members across all market quadrants, thus fully exploiting not only the reboot, but also the franchise before it, given an optimal hiatus between original franchise and reboot. Currently, hit films of thirty years ago or older are mooted as being in development . Private Benjamin (gross box office $4m, 1980), Fright Night, The Thing, Police Academy, The Hitcher and RoboCop, among others, show that a generational ‘skip’ can bring certain franchise concepts into focus, out of nostalgia or studio executive’s childhood acquaintances and memories of the property. Again, this idea of a generation being seven or ten years – just enough time for a child to grow up or become a teen and want to see a reboot of something s/he enjoyed previously – could align with the idea of a shortening reboot period. While the average reboot time is approximately 19 years of the thirteen franchises selected here, more franchises may operate on the Bourne model, with its reboot time of 10 years.

Properties go dormant with regularity, yet King Kong has acquitted itself well over the 77 years the franchise has been remade, costing $670,000, in 1933 and earning $10m up to 2005’s remake costing $207m and earning $550m worldwide. It remains to be seen how long a franchise can lie dormant without a reboot (implying a change of main actor and tone) and yet remain of more than a cursory interest. Beverly Hills Cop’s return in its fourth instalment since its parent property’s release twenty-eight years earlier will be an interesting test.

7.4 Tonality
Keeping the tone of the parent property is akin trying to stay in childhood: franchises must progress or ‘grow-up’ to match the culture of their audience. The Bond franchise moved into a smoother, more confident style, often comedic or wry, whereas the previous films adhered rather more strictly to a thriller or adventure film feel. As Bond rebooted with each change of actor, audiences subconsciously anticipated a change of tone. Roger Moore’s frivolity affected the overall tone of the film; Dalton, stuck in a bad time for chauvinistic hero Bond, had to deal with Bond girls who discovered women’s lib. The box office reflects the changes in Bond’s rebooting success. Graph K: The Bond Franchise

Often, tonal changes can keep the franchise fresh while still maintaining continuity with previous instalments – or it can be a risky element. The change of tone in Superman III, which was not successful at the box office, was a comedy take on a non-comedic franchise and a sombre presentation of its eponymous hero. Still played by Christopher Reeve, the film was not successful, despite the supporting performance of Richard Pryor.

Graph L: The Superman Franchise

The franchise surrounding another comic hero The Hulk is a lesson in tonality. Director Ang Lee’s 2003 Hulk was a sombre, lengthy dramatic take on the scientist who becomes, in effect, a monster. In 2008, The Incredible Hulk was transformed into a special effects-laden affair more akin to Transformers. Both films had similar budgets ($137m and $137.5) and grossed similar box office, suggesting that the franchise concept of The Hulk was adaptable.

The tone can also extend beyond the colour palette, design or pace of a film. Some tonal changes could be better understood as homage. Examples of this are West Side Story being a modern day version of Romeo & Juliet, Ten Things I Hate About You being based on The Taming of The Shrew and Forbidden Planet being an homage on The Tempest. These examples could fit the definition of ‘remake’, but because of the radical change in location but primarily era, they are virtually stand-alone products based on previous properties rather than outright remakes of previous motion pictures.


The costs of filmmaking on a studio level have risen: between 1993 and 2006, movie production costs rose from $29.9m to $65.8m, and many going into $100m after the addition of marketing costs . With business models disrupted by collapsing cinema attendance, falling DVD sales, piracy and entertainment competition from the internet, Hollywood has had to act fast to protect its business.

Taking a lesson from the 70s, the studios are looking to manage their risk with familiar film properties. But this time, taking for their templates blockbusters such as Jaws and Star Wars, the studios are relying on film franchises – films that run over one sequel or more – to reduce risk and attract audiences to a product that is both known and unknown.

The emergence of this franchise strategy requires the primary parent property (the first film in the series) to explore the market for subsequent sequels and instalments to exploit and extend.

Before analysis can be performed, the definition of the film reboot – contextually defined as a film product rejuvenated primarily by changing two factors recognisable to the audience: actor/character and change of tone – is argued for, while taking into account association with the parent property and the temporal relationship to it in release sequence. An examination of legal definitions currently used in the film industry reveals that the reboot is different in function and structure than a sequel or any other instalment of a feature film franchise, and is, in fact, a specific strategy.

This paper defines its ideal data set as film franchises which earned over $200M at the US box office (gross) in at least three instalments, of feature length and having a cinema release. Examining this segment shows that successful franchises are being “rebooted” more often than non-successful franchises. This is shown further in Graph A (page 33), where budget and earnings difference between franchise (two or more instalments) and non-franchise films generates a specific relationship which can be applied to individual franchises.

In the Graph Series B (34), a variety of franchise films are displayed, showing fitted (predicted) and US gross box office figures (actual), proving that the films which are currently being rebooted are potentially more profitable than stand-alone films or other franchises.

The importance of rebooting a franchise is shown by the Product Life Cycle Curve (pages 44, 50). After a product has been Introduced, it enters Growth to Maturity and then into Decline. To reboot the product is to enter it into Rejuvenation, which begins a new franchise with potentially equal earning capacity.

Rebooting is an attempt for filmmakers to manage increasing risk and costs within an uncertain market climate, affected by piracy, a limited ability to successfully monetize on-line distribution and dropping costs of film production. Filmmakers will increasingly turn to methods and strategies which allow them to maximize opportunity for profit in these ‘interesting’ times.

The paper sets out to show that
1) the reboot is substantially different from other film franchise instalments,
2)‘dormant’ or Declining film franchises can be rejuvenated by rebooting,
3) film franchises valued currently for rebooting are more profitable than the majority of stand-alone films and
4) the reboot is not merely a marketing term or a sign of Hollywood’s lack of creativity but quite the contrary – the way Hollywood creatively manages risk.


1. Reboot definition
Recommended actions for the film industry are as follows:
Legal definition of the term ‘reboot’ to define a reiteration of a film or franchise. While this would not necessarily aid in risk management strategy (as the reboot itself does), it would regulate the difference between remakes and other instalments of moving image products based on identical or similar Underlying Material.

By adopting a legal definition of ‘reboot’, the idea of what are essential characteristics of a property and what are not could be more easily defined.

2. Defining characteristics
Further investigation into which elements can be changed within a franchise concept – and which cannot – would help to define franchise development.

By defining essential characteristics of Underlying Materials and therefore what a reboot needs to include as well as what it can alter, there is a potential rule to be discovered whereby audiences are drawn to franchise products without risk of alienating them by a jarring change in tone, character, cast or other elements.

The notion of defining a reboot as that which must contain essential characteristics of the parent property/franchise concept could allow for a more risk-averse framework to story-structure, tone and franchise concept as a whole.

3. Reboot Selection
Keen for future franchise material, studios and independent producers are actively acquiring right to former film properties such as Red Sonja, The Shadow, The Black Hole, Overboard and Dune. That Sam Raimi is due to remake The Shadow suggests that many of these remakes are low-budget, stand-alone films with franchise parent possibilities if they perform well at the box office. The 1984 release Red Sonja, with an estimated budget of $17.9million USD and a United States domestic cumulative gross of $6.9, suggests that the historical performance of any previous property does not outweigh the value of familiarity with consumers of filmed content, especially if the title role is occupied by a popular actor (Megan Fox). Whether these projects will be successful seems beyond the bounds of finance-only consideration. Some franchises appear to be ‘emotive’ choices.

Although the data used in this paper suggests that the decision to reboot a franchise is primarily based on previous performance of its parent property and antecedent products, the decision to reboot a franchise is never solely based on financial return: there is always a human element.

As discussed in Strategy Safari (Mintzberg, Ahlstand and Lampel 2009), biases in decision making are widespread and insidious. Accordingly, executives may make decisions which involve:

1. A bias in search of support evidence: looking at successful instances of the franchise and ignoring unsuccessful ones.
2. Inconsistency: “greenlighting” one franchise while “mothballing” another when all else is equal.
3. Conservatism: inability to see that some franchises, no matter how fondly they are remembered, may not be successful in reiteration.
4. Recency: Recalling only recent events and not learning from past errors, i.e. a leading franchise actor no longer has ‘fitness’ issues which hampered previous productions.

While regression analysis and market awareness is key, lack of awareness of bias decision-making, over-optimism, insufficient caution and lack of planning can cause even the best franchise to fail. More investigation into the decision-making process which forms the basis of Hollywood’s realised strategy to be more synergistic and more risk averse is needed. Upcoming remakes and reboots reflect a preference to produce a more predictable product in an uncertain environment, even if this attitude appears to operate with a modicum of over-optimism .

5. Reboot Time Lapse
Further study into the ideal time lapse or hiatus between franchise series and their reboots would be of use to marketing departments and production schedulers. There is a suggestion that seven to ten years is a ‘generation’ for movie audiences, moving from child to teen to young adult and onwards, always interested in seeing their old favourites as well as the reboots of said films.


Table X. Rebooted films in bold/ YTR = Years To Reboot.


Alien Alien 1979 11 80 203
Aliens 1986 17 85 183
Alien 3 1992 50 55 158
Alien Resur 1997 75 47 160
AVP 2004 70 80 172
Predators 2011
Alien Prequel
Years to reboot 32

Batman Batman 1989 35 251 411
Batman R 1992 80 106 266
Batman F 1995 100 184 336
Bat & Rob 1997 125 107 238
Batman B 2005 150 205 372
` Dark Knight 2008 185 533 1001
YRT 16

Bev Hill Cop BHC 1984 15 234 316
BHC 2 1987 20 153 276
BHC 3 1994 50 42 119
BHC 4 2012
YTR 28

Bourne BI 2002 60 121 214
BS 2004 75 176 288
BU 2007 110 227 442
Bourne reboot 2011

Friday 13th Friday 13th 1980 550,000 39 59
2 1981 1.25 21 21
III 1982 2.25 36 36
Final Chapter 1984 2.6 32 32
Part V 1985 2.2 21 21
Part VI 1986 3 19 19
Part VII 1988 2.8 19 19
Part VIII 1989 5 14 14
Jason 2 Hell 1993 3 15 15
Jason X 2002 14 13 16
Freddy Vs Jason 2003 25 82 114
Fri 13th 2009 17 65 91
YTR 29

Halloween Halloween 1978 325,000 47 70
Halloween II 1981 2.5 25 25
Halloween III 1982 2.5 14 14
Halloween 4 1988 5 17 17
Halloween 5 1989 6 11 11
Halloween Curse 1995 5 15 15
Halloween H20 1998 17 55 73
Resurrection 2002 13 30 37
Halloween 2007 15 58 77
Halloween 2009 15 33 38
YTR 30

J Ryan R October 1990 30 120 200
Pat Games 1992 45 83 178
C&P Danger 1994 62 122 207
Sum All Fear 2002 68 118 193
Rainbow 6 2010
YTR 20

Spider-Man Spider-man 2002 139 403 821
2 2004 200 373 783
3 2007 258 336 890
Reboot 2012
YTR 10

Spy Kids Spy Kids 2001 35 112 190
Spy Kids 2 2002 38 85 119
Spy Kids 3D 2003 40 111 189
4 2011
YTR 10

Star Trek M Picture 1979 35 82 139
Star Trek II 1982 11.2 79 96
Star Trek III 1984 18 76 87
Star Trek IV 1986 24 109 133
Star Trek V 1989 30 52 70
Star Trek VI 1991 27 74 96
Generations 1994 38 75 120
First Contact 1996 46 92 150
Insurrection 1998 70 70 117
Nemesis 2002 60 43 67
Star Trek 2009 150 257 385
YTR – 1st 15
YTR – 2nd 15

Superman Superman 1978 55 134 300
II 1981 54 101 101
III 1983 39 59 59
IV 1987 17 15 15
Returns 2006 270 200 391
Man O Steel 2013
YTR 17.5

TMNT Teen Mut Nin 1990 13.5 135 201
II 1991 25 78 78
III 1993 21 42 42
TNMT 2007 34 54 95
YTR 17

Terminator Terminator 1984 6.4 38 78
2 1991 102 204 519
3 2003 200 150 433
Salvation 2009 200 125 372
YTR 25



Aliens 32
Batman 16
BHC 28
Bourne 9
Fri 13th 29
Halloween 30
J Ryan 20
Spider-man 10
Spy Kids 10
Star Trek 15
Superman 17
TMNT 17.5
Terminator 25



Budgets, and US and worldwide gross box office figures were taken from and various other sources for individual missing budgets, supplemented by additional information from and Fields denoting the franchise, the ‘boot’ number (1 for the initial series, and 2,3,… or more for successive reboots) were added manually.

Budgets and box office figures were converted to real January 2010 dollar amounts using the monthly US Consumer Price Index (CPI-U) of the U.S. Department of Labour, Bureau of Labour Statistics. The nominal figures were assumed to refer to the month of release.

For the purposes of regression analysis, the sample was restricted to titles released during the period January 1995-December 2009 in order to abstract from trends in moviegoing in previous eras, and to avoid including titles still on release. Stability tests (described below) showed that the relationship between budget and box office success was stable over this period.

Box office success was proxied by cumulative US gross. Titles with a rest-of-world gross higher than their US gross were excluded, in order to exclude (generally non-franchise) titles with a limited US release, inclusion of which would have biased the results. In addition, titles with budgets less than $20m or greater than $200m (at 2010 prices) were excluded, which again were predominantly non-franchise. This resulted in a sample of 90 franchise releases and 530 non-franchise releases with relatively similar distribution of budgets. Basic descriptives are given in Table D.

Table D: Regression samples

N Budget (Jan 2010 $m) US gross (Jan 2010 $m)
mean st. dev. mean st. dev.
Non-franchise 530 58.4 34.0 73.9 70.0
Franchise 92 64.7 40.5 125.2 77.0


Separate univariate regressions of US gross on budget (in levels) were run for each of the two samples. The results are as shown in [table below] and graphically in the scatterplot (Graph A, page 33). A time trend and an interactive term in the time trend and budget were jointly clearly insignificant at the 10% level in both equations, suggesting that the relationships were stable over the sample period.

Non-franchise (N=530) Franchise (N=92)
Budget 0.857 (0.124) 0.906 (0.209)
Constant 23.888 (6.500) 66.584 (13.762)
R2 0.173 0.228
F 48.09 18.83

Notes: Dependent variable US gross. Robust standard errors in parentheses. All variables and F-stats significant at the 1 per cent level. These results suggest that, in each case, an additional $10m of budget is on average associated an approximately $9m in additional US box office revenue for both franchise and non-franchise films, but that franchise films on average gross $43m more than non-franchise films of similar budget.

Stability of the relationships was tested by adding a linear time trend and an interaction term in the trend and the coefficient on budget. These terms were jointly clearly insignificant at the 10% level in both equations, indicating that the relationship between US gross and budget was stable over time within the sample period.

The non-franchise model was then used to predict the US box office performance of franchise films in the dataset. These fitted values were then used as a benchmark against which to assess the actual performance of franchise films. The comparisons are presented in time series charts showing the degree to which titles in each franchise outperformed or underperformed relative to the benchmark prediction. The charts are used to assess the hypotheses about the evolution of the performance of franchise films over time, and commercial decisions about whether to extend, reboot or discontinue film franchise.

Table XX: Data Sample
A sample of the Excel file containing over 4000 films with data supplied by, with additions from film critics, Box Office Mojo and the and augmented with additional information by the author. This file is available for further study but, due to thesis length limitations, could not be included in its entirety.

NOTES: Words from the critics

Cline, Rich. Email correspondence 18 February 2010. “I think reboot only applies to franchises where they take it in a different direction. A reboot is more like a sequel or prequel that has been completely re-imagined, rather than a remake, which simply tells the same story again. Batman Begins was a reboot – and I’d say the most successful one so far, as it spawned a hugely acclaimed sequel all its own. Casino Royale was also a successful reboot. Star Trek is actually a prequel, not a reboot (it even includes one of the original cast members in his original role). Although it does ultimately reboot the franchise and send it in a different direction. The Incredible Hulk on the other hand isn’t a reboot at all – it’s a direct sequel, but with a new cast.”

Aldridge, David. Email correspondence 18 February 2010. “Reboots, on the other hand, and to continue the computer parlance, are instances where a franchise/series (call it what you will!) has started to crash, and a radical restart is needed. We’ve seen instances of that recently with the Bond films (surely the most lucrative long-term franchise – along, probably, with the Police Academies) and, equally notably, with Star Trek. There’s a Spider-Man reboot in the pipeline too. Reboots usually involve fresh casting, and radical rethinks of the tacks and tones to take and adopt. In all three of the above-mentioned reboots, the tack is to go back to basics, cast young and fresh, and go for a younger audience that the makers hope will stay and grow with them through subsequent instalments.”


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“If everyone knew the answer, everyone would be rich, wouldn’t they? You just never know. Some of them die in the fourth film, some of ’em, like Bond, go into the 20s. So you just never know and that’s the magic of the movie business… Well, the formula is, if every movie before it does reasonably well, that’s the formula. I mean Bond never bombs. Bond has its ups and downs, sometimes it does great, sometimes it does not-so-great but in the end, Bond, Star Trek, those movies, all of them made money. And so that’s the formula [the studios] look at, believe it or not. There’s no creative formula, there’s more of a financial formula.” *

*Michael Spiere, managing editor of Daily Variety, talking to M.A. Thomas (2006) on what makes a successful franchise.