Superhero Flywheel, Up, Up, and Away
A framework for growth of the superhero industry
The superhero genre is a business built on mythology, and growth is vital to this duality. Sustaining a mythology requires belief, not necessarily in its existence, but in its importance. In the superhero instance, this reverence comes from fans. Without that support mythology is at risk of being forgotten and irrelevant. Growth of the superhero industry is how it captures the mindshare of fans. Growth begets more resources enabling the superhero genre to engage more consumers, generate new content, and remain contemporary in the world.
There is a growth framework that can help us:
Understand how superhero content manifests itself as products and experiences
Explain how to increase the number of fans and deepen fan loyalty
Identify some of the shortcomings of the superhero industry as a whole
Strengthen the quality of content and by extension the mythology as a whole
Without further ado, for those unfamiliar, let me introduce the concept of a flywheel.
What is a Flywheel
A flywheel, in a literal sense, is a mechanical component that translates momentum into devices that require rotational power. As an analytical framework, the flywheel was popularized by business strategist and professor Jim Collins1, and conceptually it translates a strategy into a cycle with components that spin the flywheel faster, and the faster it spins the more the business grows.
Notably, I want to highlight some key factors for our superhero discussion to keep in mind:
The flywheel explains the forces that affect a business’s growth, and the interdependencies of those forces
The concept is very customer centric, while flywheels are framed from the perspective of the business it very much centers on the effect it has on customers
There is an interplay of momentum (factors that speed the flywheel up) and friction (factors that slow it down) that organizations must be conscientious of
Some illustrations can depict how the concept is put into practice.
Flywheel Examples
Amazon
A company that has infamously utilized the flywheel to great effect is Amazon. In fact, the urban legend is that Jeff Bezos sketched the original Amazon flywheel (below) on a napkin.
If you are a consumer of Amazon's retail side, and as you go around the flywheel, there should be a sense of familiarity as it reflects what underpins Amazon’s marketplace. There are interdependent forces of lowering costs and increasing selection for customers which ultimately attracts more customers and sellers to grow their marketplace further. And in terms of results, well Amazon is the behemoth that they are today…
Let’s pivot a little closer to a flywheel more relevant to the superhero industry.
Disney
In 1957, Walt Disney created the chart below to illustrate how Disney’s business works.
It’s a labyrinthian blueprint that shows how Disney’s iconic brand and content from Disney Studios drives various forms of revenue for the company, from movie theaters, TV licensing, music recording, merchandise, amusement parks, and etc. Additionally, you can see the synergies behind this virtuous cycle with all the different elements, as one business unit might provide the content for another, and that respective unit will then reciprocate by plugging the former unit. Disney fans can enjoy Mickey Mouse and friends at any stop in this ecosystem in a variety of forms. *If you’re interested in reading more about Disney’s flywheel in particular, I highly recommend some of Ben Thompson’s Stratechery articles on the topic2.
Hopefully the flywheel concept is less abstract now, which leads us to utilizing these concepts for…
The Superhero Flywheel
Ta-da, may I unveil my rendition dubbed the “Superhero Flywheel”. *If it lends me any credibility, legend has it that there are stacks of scratch paper that I also repeatedly scrawled this diagram on.
Now this particular flywheel is not about just one company, I wish to utilize it to holistically depict how the industry produces fan experiences. It can be utilized by any company that engages in the superhero genre. Fundamentally, this flywheel is about fan growth - how new fans are introduced into the superhero genre, and how fan loyalty can be deepened - because fans (i.e. consumers) are the lifeblood of any business.
The key flywheel components are how superhero content manifests itself for fans:
Comics - Both print and digital
Media - In this category I specifically refer to film and television series and include streaming platforms
Video Games - Any form whether it’s consoles, PC, or mobile gaming
Merchandising & Retail - Licensing superhero intellectual property to third parties to create consumer goods (toys, collectibles, clothing, etc.) for retail purposes, or the IP owners create their own which would be considered first party
Live Attractions - This is for live experiences like amusement parks, conventions, or any other live showcases
Since time immemorial, superhero content originated from comic books. Their main role in the flywheel is as the core repository of ideas for the other categories. The companies that control the superhero brands can utilize the stories and subjects for their own movies, merchandise, video games, etc. if they’re vertically integrated, or the companies can license out the intellectual property behind their brands to third party partners. An ancillary role that comics play is as a form of promotion, whether it’s implicitly through branding or explicitly through (print or digital) advertisements in the pages themselves. However, while comics are the source material, historically it’s been more of a niche market.
The real catalyst for growth in the superhero industry has been the proliferation of multimedia such as film and TV adaptations particularly since the early 2000s, which are in large part due to Marvel and DC’s cinematic efforts, which you can read more about in Marvel vs. DC - Cinematic Strategy (Part 1) and (Part 2). In particular, superhero films are the new blockbuster cinematic event, and have really brought the genre into the mainstream. Which is not too surprising given that movies and TV are more accessible than a comic mythology that spans decades of context. What’s wonderful though is if you are a newcomer via the movies for example, that is a gateway to ease and introduce fans to more content via the comics.
Additionally, the blockbuster spectacle of these shows, especially movies, has really enabled or magnified live attractions, whether it’s amusement parks such as Avengers Campus at Disneyland or conventions such as Comic-Con. These live events are high engagement channels. As a fan you’re surrounded by costumes, set pieces, a celebration of superhero content, and a sense of community. The last of which can arguably entrench a fandom for life. In turn, these live attractions can be retail channels to sell movies, video games, comics, etc.
Superhero video games are also niche, but they can be an immersive medium for fans to live out their superpowered fantasies. Depending on the content of the game, they can also act as a gateway for fans to explore more of the same stories through the comics. Merchandising and retail play more of a complementary role in the overall flywheel. Any subject in the movies, TV, comics, or games can be made into products, and that collectible can be very meaningful to one’s fandom. These commodities help further proliferate the superhero brands.
Let me illustrate the flywheel with some examples from none other than Marvel and DC. The table below depicts capabilities that both parent companies currently possess in each component.
Disney’s capabilities should come as no surprise. As mentioned in the previous section, almost since inception, Walt Disney had a vision to position Disney as a platform to nurture franchises. It’s why they acquired Marvel to begin with, and why they also acquired Star Wars. Warner Bros. Discovery has all the capabilities in place, but the DC mythology, particularly DC cinematic universe as I mention in my previous posts, has been in disarray which has hampered any flywheel effect given how significant a linchpin media is for mass consumption.
While Marvel and DC are the most recognizable superhero franchises, the flywheel doesn't just have to apply to those two. As you can see even they do not have all the components fully vertically integrated. They leverage partnerships for the capabilities they lack or haven’t fully expanded to yet. Which is what smaller brands - Image Comics, Dark Horse Comics, etc. - can also do to compete against the big two. Stay tuned for future posts on other competing comic book franchises!
You don’t need to have all parts of the flywheel from the get go, an effective business and franchise can be enabled by a few components. Though the more you have the greater the flywheel amplification becomes.
Momentum and Friction
The faster the flywheel spins the more the industry grows, but what can affect the speed? Here are a few recommendations for these franchise-bearing companies to consider.
First and foremost, you must ensure there is quality content. I know that sounds very obvious, and is far easier said than done especially in a superhero mythology with so many interpretations and subjective tastes. Fundamentally though, good content creates momentum by bringing more fans into the franchise, turning your existing fans into evangelists, and energizing them to seek out the other components. Whereas bad content incurs friction creating an antithetical effect, dissuading newcomers and damaging the trust of your fans. Why would anybody want to buy a figurine from a bad movie?
Not to rehash the same examples, but Marvel and DC are very emblematic of this dichotomy. Marvel has shown how wildly successful this strategy can be, and DC has yet to capitalize on it due to its largely polarizing cinematic track record thus far. However, the potential for DC is absolutely there, and hope is possibly on the horizon with their new DC Universe. If those plans work out it will unlock an incredible untapped amount of growth for the brand given that film and TV catalyze the most speed in the flywheel.
Second, franchises need to make it easier for fans to discover all the manifestations of the heroes they care about with better bundling and promotion of the different components together. Currently, this does happen on some levels. As mentioned, retail channels are one natural bundling of experiences and goods. Advertisements are another explicit form of cross promotion.
What I’m referring to are new strategies that haven’t been explored yet. The ecosystem is becoming more and more digital. Streaming platforms can bring up a library of superhero film and TV shows at a moment’s notice, digital comic platforms are maturing, and video games have always natively been digital. These companies need to think about combining their efforts to help fans access more of these channels after signing up for one.
Some ideas are bundles that unlock access to multiple platforms with one payment plan, in-app promotions between similar content (e.g. “we’ve noticed you like Spider-man movies, we recommend reading these comics or playing these video games”), or even ambitiously unifying access (media, comics, video games) on one user interface. These types of integrations can be very challenging due to technical complexities and coordination between different businesses. After all, each digital platform could be managed by a completely different company.
While difficult, this type of fan engagement can yield meaningful dividends. Amazon Prime is, pun fully intended, a prime example of how powerful bundling can be. Membership into Amazon Prime unlocks a variety of multimedia access: Prime Video (streaming service), Comixology (a digital comic platform they acquired), Prime Gaming (video game offering), and much more. Unsurprising from the flywheel masters.
With respect to the superhero genre, there is so much untapped potential from cross promotion. When James Gunn, the Co-CEO of DC studios, unveiled the new DCU slate, he cited several historical DC comic series as inspiration for storylines the DCU will adapt. Shortly after, those exact collections he references - All Star Superman, Supergirl: Woman of Tomorrow, Grant Morrison’s Batman, and others - completely sell out online! To be clear, none of these movies and shows have come out yet, but the mere attribution of those comics caused fans to clear out their inventory. There’s that DC hope that I was mentioning 😉. Imagine if this type of promotion was formalized in the platforms themselves.
While not a superhero franchise, one last example is HBO’s The Last of Us TV show based on the zombie genre video game. The hit phenomenon of the show has dramatically surged sales of the video game. It does help that both the video game and HBO show have incredible story-telling, and there’s that quality dimension that I was mentioning 🙃.
Lastly, tighter feedback loops between internal business units, external partners (if applicable), and fans is critical to producing content that resonates. Admittedly, it is hard to discern the current state of feedback loops given how behind the scenes this business practice can be. I hope Disney is running surveys and gathering fan sentiment at Avenger’s Campus. I hope game developers are listening to their players instead of being bogged down by bureaucracy with their partner studios. I hope studios are acting on the feedback from early screenings of their movies and shows. I hope these companies perform rigorous quality assurance with merchandise manufacturers to ensure there’s an attention to detail to products. Poor communication and coordination only leads to poor execution.
For the Fans
Any one of the superhero flywheel parts can be an entry point for new fans, it doesn’t necessarily just have to be from comic books or movies. As you become a fan, the more you consume the superhero genre in various forms, arguably the more loyal and attached you are to the genre as a whole. By doing so, and spinning the flywheel, the enterprises that are responsible for these various components can continue to cater to fans in whatever medium they prefer.
Ultimately though your fandom isn’t any less valid if you choose to engage via multiple elements or just one. The superhero flywheel is merely a framework to understand how the companies that control the brands attempt to grow their business, how the industry holistically functions, and how we can improve the superhero industry.
Fans still have the most meaningful position in this ecosystem, not employees, executives, or shareholders. These franchises should listen to our voices, and if that doesn’t work, they’ll listen to our wallets. As a result, don’t ever underestimate your superpower as a fan.