As we near the 23rd anniversary of The Fellowship of the Ring’s release (Dec. 19), we’re going to revisit the gamble that was The Lord of the Rings trilogy, how it rewrote the rules of Hollywood franchise development, and the examples and elements the industry should focus on today to create new franchises of renown tomorrow.

The Lord of the Risk

“Not all those that wander are lost.” – Bilbo Baggins

“Then and even now, it was a massive gamble,” Shawn Robbins, Fandango Director of Analytics and founder of Box Office Theory, told Observer. “The sheer amount of money invested into a years-long project that demanded large crews and a cast working mostly outside the traditional Hollywood system and locations was unprecedented. Everything hinged on the first movie delivering with fans and audiences. Otherwise, the sequels would have paid the price for it at the box office.”

Of course, we all know how this played out. The trilogy would earn billions globally, culminating in a historic 11-for-11 Oscars sweep by The Return of the King in 2004. It gave the green light for other franchises to adopt similar production schedules—such as The Matrix and Pirates of the Caribbean filming entries two and three back-to-back after the initial success of the first—though none nearly as precariously ambitious.

The Fellowship of the Ring marked the beginning of Hollywood’s episodic approach to franchises. More importantly, it launched a new emphasis on IPs with built-in audiences that could develop into universes of specific fandoms.

Could another Lord of the Rings production process happen today?

“It’s the job that’s never started as takes longest to finish.” – Samwise Gamgee

For all intents and purposes, this was the true start to the Comic-Con era of entertainment—for better and for worse. The Lord of the Rings trilogy (2001-2003) coincided with the rise of the internet, which enabled film studios to essentially weaponize fandom. Pre-existing IPs with years of established fans were suddenly seen as viable financial bets with lucrative upsides.

Genre entertainment (sci-fi, fantasy, horror, superhero), once considered a fringe storytelling lane, became the bedrock of pop culture. But rather than understand Jackson’s ability to create a story that was simultaneously epic beyond scope and intimately humanistic, studios merely chased after fantastical worlds and concepts without much thought to what made it appealing beyond its genre. That’s why so many pale imitations such as 2006’s Eragon, 2007’s The Golden Compass and even 2016’s Warcraft followed. A lot of money and countless jobs were lost chasing the LOTR trend. But only those who studied what made the trilogy successful were able to fold those learnings into their own game-changing franchises.

“Hollywood learned the value of cohesive storytelling and meticulous long-term planning across franchise installments,” Derick Tsai, CEO of the IP development studio Magnus Rex, told Observer. “The Lord of the Rings demonstrated how continuity in character arcs, world-building, and thematic depth could sustain audience investment across multiple films. These lessons informed future franchises like Harry Potter and the Marvel Cinematic Universe, where detailed franchise planning became a cornerstone of massive success.”

Denis Villeneuve’s Dune: Part Two, a $715 million box office behemoth follow-up to the ten-time Oscar-nominated Dune, was only announced after the first film hit theaters. Universal fell ass backwards into the globe-trotting ensemble nature of the Fast and Furious franchise due to actor availability. The Avengers tease in Iron Man’s post-credits scene was a last-minute addition. The closest contemporary example to LOTR may be Universal’s $350 million, two-part Wicked series, which was already one of the best-selling musicals in history.

Grand franchise ambitions aren’t planned and executed in a vacuum. Scheduling, location, story, budget and countless other factors determine the direction and fate of a film series. Given the painful contraction the industry is enduring at the moment, Hollywood has been retreating into the perceived safety of “sure things.”

“In today’s risk-averse, data-driven industry, a production like The Lord of the Rings would be rare,” Tsai said. “Studios now prefer iterative approaches, where the success of an initial installment informs future expansions.”

Having said that, Tsai points to small-screen examples such as Amazon’s five-season plan for The Rings of Power and HBO’s ten-season plan for the Harry Potter reboot that reflect long-term commitments supported by “extensive data and proven audience demand.”

The reality is that it’s extremely difficult for a new-to-screen concept to break through these days, even on streaming platforms where franchises don’t face the same scrutiny (or boast the same cultural footprint) as theatrical. Audiences want familiarity. With magnified social media attention and divisive online factions, it’s harder than ever to deliver a general crowd-pleaser. As such, Hollywood is constantly looking for other financial avenues to mitigate big-screen risk.

“Never say never, but it would take a massively confident pitch from established industry names, likely with ancillary benefits such as merchandising, IP extension into television, video games, theme parks and many other franchise-adjacent perks,” Robbins said. “In this day and age, and in a risk-averse business, there usually have to be multiple safety nets.”

How should Hollywood build franchises moving forward?

“May it be a light to you in dark places, when all other lights go out.” – Galadriel

The Lord of the Rings novels are a once-in-a-lifetime story that got swept up by a generational filmmaker who happened to peak during the filmmaking process. This is not a replicable process.

“Filmmakers should prioritize telling a compelling, self-contained story rather than focusing on building a multi-part franchise upfront,” Tsai explained. “The key is to ensure the characters and the world resonate deeply enough with audiences to create demand for future installments.” Tsai points to the “epic prologue” and “emotionally grounding” first act of The Fellowship of the Ring as the best example of this in modern Hollywood.

What can and has been repeated is the desire to innovate within a proven genre at a reasonable cost. The first John Wick was a balletic orchestra of violence made on a low midtier budget. Knives Out blended sharp social commentary with an all-star ensemble cast, revitalizing the murder mystery. Taylor Sheridan’s growing roster of Neo-Westerns and crime dramas share connective thematic tissue. Marvel is still the only studio with a successfully long-running interconnected universe at a blockbuster scale. James Cameron never stops innovating, and the success of his Avatar films is proof that marrying populist storytelling with boundary-pushing techniques can deliver huge hits.

“Ultimately, there is no single correct way to build a franchise,” Robbins said. “This is where business meets the art form, and the former of the two has to be malleable when it comes to establishing a plan, to be willing to change that blueprint midway if necessary and to learn when to leave it alone.”