"We estimate-- and I'm just going to move to the balance sheet for a second-- we are estimating a 15% compounded growth rate in free cash flow from the end of fiscal 2012 through fiscal 2015. Even if we assume $5 billion in capital returns during this period, $5 billion per annum, we estimate that you will have a significant cash position of over $9 billion."
This news will calm existing concerns by investors. The financial implications of The Lone Ranger have long been investigated by the media and while merely touched upon during the event, Rasulo did indicate that the company has learned from their mistakes:
"There needs to be a cap on tentpole, non-franchise movies. We need to cap those at a level that allows us to experience good economics and doesn't quite put as much at risk. So going forward you're really going to see a cap on the spending on those movies, which I think from a risk management perspective, puts us in a much better place in terms of our Studio slate."
Some commentators have expressed their disappointment with this statement, yet it's an opinion that I strongly support. Last month, I wrote an extensive article about why I feel that the film industry cannot continue to sustain budgets of gargantuan proportions (see link http://www.expertcomics.com/enr/2013/08/high-price-of-a-successful-movie/)
Rasulo went on to explain the reasons behind the release of Pixar's Planes. He unapologetically explained that the Cars franchise is one of their biggest earners. This ultimately led to the creation of Cars Land and, aiming to further capitalise on the brand, the company introduced the spin-off film Planes. The film has since had an astounding impact on Cars merchandise sales; thus it continues to be one of the company's largest earners.
Star Wars fans will undoubtedly rejoice in the news that Disney will expand upon its merchandising to equal or exceed that of the Marvel franchise. Rasulo stated:
"Star Wars has been very narrowly focused in the licensing world around toys and books, and few other categories. If you look at Marvel and Disney, we are both much broader in terms of other categories -- soft goods, housewares, all the stuff you see us in and now you see Marvel in."
"Our strategy with Marvel and again with Star Wars is to take that all in-house into what is the most -- biggest and most powerful licensing organization in the world. And so, up until 2015 we will lay the groundwork for all of that just as we did with Marvel in anticipation of The Avengers. And then when the film comes out in 2015 we will be ready to blow it out."
Over the next decade, Disney will release multiple films each year including: two to three Pixar features, two Marvel films, one Disney animation and one Star Wars film. Rasulo expanded upon the non trilogy Star Wars film by expressing that it will be an origin film:
"Star Wars either trilogy film or origin story film."
What I find intriguing is that Rasulo considers each of the standalone Marvel films to be an origin story. As there has been an expressed wish for the Star Wars franchise to follow in similar footsteps to the Marvel films, we may be introduced to a series of films that interlink with one another. At present, a standalone Yoda or standalone Han Solo film are the favorites to be the first 'Origin Film'.
I believe that the films will either expand upon new characters seen in Episode VII, or will look to create a new franchise within a different time-frame. After the introduction of three to four films, I would expect to see an Avengers style film, an event that brings the loosely connected characters together to fight a greater evil.
The Old Republic era has had a successful expansion through video games, comics and toys. As illustrated above, Planes, and Finding Nemo sequel Finding Dory, have been created to capitalise on merchandise sales and while the Old Republic era is not nearly as popular or as profitable as the Original Trilogy, it's an untapped resource that isn't hindered by cannon or casting choice.
Filling the shoes of existing characters is an impossible task, regardless of which actor is cast in the role: it will become difficult to believe in a film that is missing the original actor who due to age, is unable to reprise their role in their character's Origin story.
The only way to avoid this, in particular with Han Solo, is for the character's Origin Story to take place either while he is a child or late teen. As seen with the Prequels, this can have devastating results and despite it being ten years since the release of Episode III, it is a wound that has not yet healed.
Regardless, it will be fascinating to witness the direction in which the Star Wars saga is headed. It would appear that the rejuvenation and expansion of Star Wars merchandising begins with producing a film that pleases fans. As Rasulo stated:
"Well, the strategy behind the Star Wars Consumer Products, number one, put out a great film, right, that is number one."
This is a refreshing and exciting take on the franchise and going by the strategies employed with the Marvel properties, I for one feel relaxed in knowing that the franchise is in safe hands.