In the movie business, sequels seldom perform as well as the originals. We look at how Marvel has bucked the trend.

This article was written together with Spencer Harrison of INSEAD Business School.

In just a decade Marvel Studios has redefined the franchise movie. Its 22 films have grossed some $17 billion—more than any other movie franchise in history. At the same time, they average an impressive 84% approval rating on Rotten Tomatoes (the average for the 15 top-grossing franchises is 68%) and receive an average of 64 nominations and awards per movie. Avengers: Endgame, released in the spring, has won rave reviews and generated so much demand that online movie ticket retailers had to overhaul their systems to manage the number of requests.

The Marvel Cinematic Universe, perhaps the most successful franchise of all time, strikes the right balance by (1) selecting for experienced inexperience, (2) leveraging a stable core, (3) continually challenging the formula, and (4) cultivating customers’ curiosity.

1. Selecting for Experienced Inexperience

In movies, whom you hire is a big part of what you get. And as the saying goes, “The best predictor of future performance is prior performance.” Marvel Studios subverts this maxim in a fascinating way: When hiring directors, it looks for experience in a domain in which Marvel does not have expertise.

Moreover, Marvel Studios grants directors a large degree of control, especially in areas where they have experience. Jon Favreau (Iron Man and Iron Man 2), James Francis Gunn (Guardians of the Galaxy and Guardians of the Galaxy 2), and Taika Waititi (Thor: Ragnarok) all describe being given surprising freedom and encouragement to make their own thing. In a 2008 interview Favreau said, “We could sit in the trailer with the Marvel guys, with the producers and the actors, and talk about what the scenes should be based on, what we’ve shot and what we’ve learned, and there’s a flexibility of material, so in a lot of ways there’s a lot of freedom to try things different ways…a real sense of freshness and discovery in this project.”

At the same time, Marvel maintains close control over the blockbuster aspects of the movie, providing a lot of direction on special effects and logistics. Head of Marvel Studioes Kevin Feige explained in 2013, “When we bring in the filmmaker, it’s to help us do something different with all of those resources.” The combination is potent for both parties: Directors see an average surge of 18 percentage points in their Rotten Tomatoes ratings between their previous film and their MCU film.

2. Leverage a Stable Core

To balance the new talent, voices, and ideas it brings into each movie, Marvel holds on to a small percentage of people from one to the next. The stability they provide allows Marvel to build continuity across products and create an attractive community for fresh talent.

A stable core supports renewal, because it exerts a kind of gravitational effect. People not in the core are keen to join it. For example, superhero movies were once seen as the kiss of death for actors with high artistic ambitions. But Academy Award winners such as Gwyneth Paltrow, Anthony Hopkins, Forest Whitaker, and Lupita Nyong’o have all played roles in the MCU. Cate Blanchett, another Oscar winner, described in a 2017 interview what she liked about joining the MCU: “Very early on, I threw a lot of ideas into the ring with Taika and with the Motion Capture people and the Special Effects crew and then they took [my ideas] and ran with [them]. It’s like what if I shot this out? What if I play with my cape? Could stuff come out of that?”

3. Keep Challenging the Formula

Organizations are often loath to abandon what made a creative product successful. But Marvel Studios’ directors all speak about a willingness to let go of the winning ingredients in prior MCU movies.

Peyton Reed, the director of Ant-Man and the Wasp, spoke in 2018 about how his movie departed from those that directly preceded it (Black Panther and Avengers: Infinity War): “We wanted to [be] in the crime genre in terms of structure and looking to stuff like Elmore Leonard novels and movies like Midnight Run and After Hours…. We always knew we were coming out after Panther and Infinity War…. We all felt like, ‘Okay….This feels organic to what we were already doing, but it’ll also be a stark contrast to what came before.’”

What the MCU experience shows is that franchises benefit from continual experimentation. This lesson seems to hold outside the movie business as well. For instance, the Spanish clothing retailer Zara constantly releases short runs of new clothes based on recent trends, often from haute couture fashion houses. Zara’s competitors expect their customers to visit two or three times a year, but Zara’s customers may visit up to five times as often, because they expect the new offerings to violate the assumptions of the old.

4. Cultivate Customer Curiosity

At its best, Marvel Studios provokes an intense interest in characters, plotlines, and entirely new worlds. Its whole universe has the feel of a puzzle that anyone can engage with. Moviegoers become active participants within a larger experience.

Marvel systematically builds anticipation for its coming films by putting “Easter eggs” in its current releases that suggest a future product without giving away the story. The most obvious example is its famous post-credits scenes. The first of these was shown at the end of Iron Man, where S.H.I.E.L.D.’s Nick Fury, played by Samuel L. Jackson, is introduced, suggesting to fans that Iron Man may be part of a larger universe.

The movies also present semiconcealed onscreen elements and references that only die-hard fans will notice—or story lines and character development that play out across several movies and products. For example, the Infinity Gauntlet, a weapon that figures heavily in the 19th film, can be seen in the background in Thor, the fourth film. A similarly important weapon, the Staff of the Living Tribunal, was casually introduced in Doctor Strange and may foreshadow the presence of a new character—named the Living Tribunal—in future movies. In Thor: The Dark World a chalkboard is filled with equations, one of which references a comic book arc about Doctor Strange’s trapping the Incredible Hulk, potentially foreshadowing a plot twist.

This is a shorter version of the article: Harrison, S., Carlsen, A., and M. Skerlavaj. (2019). Marvel’s Blockbuster machine. How the studio blends continuity and renewal. Harvard Business Review, 97(4): 136-145.

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