Our solution to Marvel\'s increasing market power and expanding product portfolio centered around acquiring human and physical capital to vertically integrate the movie production process.

1. Marvel Enterprises
A plan for sustained growth
1

2. Based on Marvel’s current market position, it needs to
answer two key questions about its future position
Marvel Enterprises is the
number 1 comic book publisher Marvel has experienced an
and licenser in the US, ahead of increase in sales and
closest competitor, DC Comics. profitability, and now needs to
There has been slow to virtually position itself for future.
no growth in publishing.
1 2
Should Marvel focus on Should Marvel invest in
its core heroes or more capital-intensive,
introduce its lesser but potentially more
known heroes? profitable projects?
2

3. We recommend Marvel focus on introducing other heroes
and investing in more capital-intensive projects
1 2
Should Marvel focus on Should Marvel invest in
its core heroes or more capital-intensive,
introduce its lesser but potentially more
known heroes? profitable projects?
Profitability
Brand Equity
Growth Potential
1. Build Marvel Universe by introducing new heroes with known heroes.
2. Invest in capital-intensive projects, specifically, movie production.
3

4. Licensing has led to Marvel’s rebound and
rapid growth
1939 1990s 1998 2003
Introduction of Licensing
15% increase in 20x increase in
market share stock price
4

5. Customers can be segmented by 3 main
product categories
Publications
Toys Motion Pictures
• Males
• Boys • Mass audience
• 13-23 yrs
• 4-12 yrs
• Beyond
• Established
• Collectors (20%) publications
Readers
5

6. Competitors span across the different
businesses
Publications Toys Movies
• DC Comics (35%)
• Bandai • Warner Brothers
• Smaller industry
• Hasbro • Pixar
distributors
• Mattel • (Incredibles)
(25%)
6

7. Business Model
Publishing
Toys
Marvel
Licensing – Motion Films
Licensing – Other Products
Marvel owns Marvel does not own 7

8. Currently, the motion picture segment is growing the
fastest, but we only retain 7% of sales
Breakdown of Revenue Percentage of Total Revenue
and CAGR (’01-03) by Business Marvel Retains from Box Office Sales
97%
7%
24.51%
21.09% 22%
12% 14.56%
93%
Publishing Toys Licensing - Movies
Marvel has to capitalize on the movie production and distribution process.
8

9. The Marvel Universe is our greatest strength
Spider-man
Deadpool
Iron Man The Marvel
Fantastic Universe
Four X-men
Hulk Elektra
Marvel needs to be a masterbrand, not a house of brands.
9

10. Marvel wants to seize the opportunity to
capitalize on Motion Films
Publishing
Toys
Marvel
Motion Films for Core
Heroes
Licensing – Motion Films for Non-
core Heroes
Licensing – Other Products
Marvel owns Marvel does not own 10

11. Lesser known heroes who find success in movies will
become the future core heroes and be produced by Marvel
Lesser known heroes Core heroes
If successful
Licensing Phase Production Phase
11

12. Marvel can leverage existing equity of core heroes
to introduce new content with lesser-known heroes
Criteria Production Licensing
Gross sales > $250 m < $250 m
Characters Core heroes Team = Core +
Lesser known
Audience Mass market Comic book fan
base
Goal of movies Introduce audience Discover potential
to Marvel Universe core heroes
12

13. The toy market is highly competitive and
driven by volume
Percentage of Marvel Toy Sales vs Industry
19%
19%
Marvel Toys
35%
Margins
Marvel is making high margins in a competitive market by licensing.
13

14. Publications are not growing at a sustainable rate, but can
contribute as R&D to rising demand for online products
Specialty
Marvel Consumers
Stores
E-Comics
Marvel is making high margins in a competitive market by licensing.
14

15. Based on the potential profits Marvel can retain by producing
and distributing films, it should produce
683
Licensing Profits (millions)
296
221 Potential Production Profits
(millions)
104 122
95
68 57.54
28.5
4.76
21
6.65 7.28 16.94
0.07 1
Projected Profit (‘04): Projected Profit (‘04):
$1.1 b $0.5 b
15

16. Acquire studio and talent
High
Introduce lesser known heroes into core hero movies
Develop e-comics
Medium
Creation of new characters via publications
Own all movie productions
Low
Develop toy production capability
Time 16

17. Thank you! Questions?
17