From Harry Potter to Narnia: the pressure on film franchises to performIn the world of film franchises, it's billions or bust – anything less than Harry Potter-style success spells the end for a series. Cath Clarke reports on how Narnia went to the brink

Dumped, downsized, delayed ... The Chronicles of Narnia: The Voyage of the Dawn Treader. Photograph: 20th Century FoxThe omens suggest there may be a happy ending in sight in the saga of the Narnia franchise. Last week snow was falling – as if Aslan himself had ordered it – as The Voyage of the Dawn Treader, the third in the Chronicles of Narnia series, was premiered as the royal film performance. (Rumour has it the Queen shed a tear or two; maybe it was from relief – last year she had to sit through The Lovely Bones.) But in 2008 it was different story: it looked like curtains for Narnia after Disney unceremoniously dumped the series – disappointed with the performance of film No 2, Prince Caspian. Production of Dawn Treader was downsized, then delayed; for a while it looked likely that it wouldn't get made at all, and the projected seven-film series would be cut off at the ankles.

It wasn't the first high-profile franchise to be rejected by its parent studio. A year earlier, the planned trilogy of Philip Pullman's His Dark Materials was canned after the first film, The Golden Compass, failed to live up to expectations at the US box-office. To the casual observer, neither Caspian nor Compass looks much like a failure: both took hundreds of millions of dollars. But there is no margin for error in the new generation of multi-film, factory-line franchises – with their whopping CGI bills and budgets that would keep a despot in military trifles. Get it right, like Harry Potter ($6bn and counting) or Twilight ($1.7bn), and it's golden. But films have to match those takings to have got it right. Anything less is a failure.

Franchises have been around longer than Bond has been bothering blondes, or Dracula has been sucking blood. What has changed is that now Hollywood studios are desperately seeking properties to nail their sails to, committing upfront – in theory at least – to making a string of films. Mike Goodridge, editor of the film industry paper Screen International, compares new-formula franchises such as Harry Potter and Twilight to Saturday morning serials, with storylines that run like a thread through the movies: "It's a dream situation for a studio to have a captive audience, which will inevitably come back for the next helping." As Harry Potter and Twilght grind to a close, eyes are on the next prize: which might just be Suzanne Collins's post-apocalyptic teen trilogy The Hunger Games; Kaya Scodelario and Chloe Moretz are in the running for the lead.

"If you can pull them off, they are a license to print money," says director Michael Apted. He has been on the other side, too – he was already hard at work on The Dawn Treader when Disney pulled the plug. Did he think it was all over? "For a bit."

What's Apted's verdict on Prince Caspian – the film that prompted Disney to bail? "I don't think it did go wrong. I don't think it was messed up. I just think they just took it for granted they were on to a successful franchise like Lord of the Rings." In reality, adapting CS Lewis is a trickier proposition than Tolkien or JK Rowling. Each of the seven Narnia titles is its own universe, with a changing cast of characters. "Prince Caspian is much darker than the first book," says Apted. There was less of the wonder and magic of The Lion, The Witch and the Wardrobe; it was bigger and scarier, with two monster battles. With The Dawn Treader, Apted says he has gone back to Narnia basics with a fairytale adventure on the high seas, featuring a stonking comic turn by 17-year-old Will Poulter as cousin Eustace.

In 2008, after Disney backed out, a replacement studio, Fox, was found within a month. Still, Apted must have felt like he was captaining a sinking ship. "It was daunting. We were put in the position that we had to retrieve the franchise, both in terms of tone – to make it more family-friendly – and to do it for less money." If appearances are anything to go by, he is exactly the man you'd want in a crisis. A 69-year-old veteran (his credits include Enigma and The World is Not Enough), he is dry as bone and seemingly unflappable. His budget was shrunk to $140m. Which is still a

scary amount of money ("well, you don't think about that").

How poorly, exactly, did Prince Caspian perform? It went to No 1 in the US, and was Disney's second most successful film of 2008. "When you do the math, it doesn't look quite so pretty," says Apted. "The second film cost more and made less." He's right: Prince Caspian took $420m worldwide. It cost $225m to make, and the same again to market. By comparison The Lion the Witch and the Wardrobe took $745m, having been made for $180m.

There was another layer of intrigue to the saga: bad blood between Disney and Walden Media, the company that holds the rights to the Narnia books and which co-financed and co-produced the movies, and which is owned by Phil Anschutz, a billionaire conservative Christian. Apted describes a situation in which everybody was blaming everybody else: "There was a lot of ill feeling. I think that poisoned the water a bit."

If $420m in box office receipts isn't enough to secure the future of a franchise, how much is? These days $1bn is the new benchmark for a bona-fide smash (though only seven films so far have made that much). What that means for audiences is that if you have a pulse you are in the target demographic. Here's Screen International's Mike Goodridge again: "I hate to say it, but with these films you have to hit what the studios call the 'four quadrant market': men, women, young and old. You have to hit everybody and then you have a genuine phenomenon."

Prince Caspian, it was thought, pandered too much to teenage boys. Fox and Walden took no chances with The Dawn Treader. Earlier this year Christian leaders and assorted CS Lewis experts were invited to a "Narnia Summit" in LA. "We went through every line of dialogue and every scene with them to make sure it was a really faithful adaptation," Walden Media's president Michael Flaherty told Christianity Today at the time.

One obvious solution, surely, would be to make the movies more cheaply. No, says Michael Apted. While he was happy to trim the budget of The Dawn Treader ("I wanted to make sure the technology didn't overwhelm the emotion of the film"), he says swingeing cuts to fantasy films are out of the question. "If you penny pinch, you're dead. Audiences are so savvy, and if you do it on the cheap you're out of it."

One person who disagrees wholeheartedly with that is Philip Pullman, whose His Dark Materials books looked set to become another major franchise. When New Line Cinema – which was behind The Lord of the Rings – filmed the first instalment, it was the most expensive movie it had ever made. Released under the book's US title, The Golden Compass, it did roaring business overseas, but just $70m in the US – and because New Line had sold overseas rights to the film in order to fund the production, it didn't make its money back on the international box office. It was a crucial failure for New Line, which was absorbed into its parent company, Warner Bros, shortly afterwards.

Pullman reckons we are now seeing diminishing returns from CGI. "We don't believe it any more. Or we know that it's only computers." If there were ever to be a Golden Compass remake, he has an entirely different film in mind. "I would rather it was made in someone's shed with tin cans and bits of rope. I think it would be more involving – to be made for about 10 quid, rather than $200m."

Talk to Pullman and you get an impression of the head of steam that builds behind a mega-budget franchise. He was delighted with the young actress Dakota Blue Richards, who was cast as his 12-year-old heroine Lyra ("she was absolutely terrific"). The film-makers looked at 10,000 girls before finding her. But she would be too old for the part if the His Dark Materials franchise was resurrected. "They would have to recast. It's lost really. It's gone." (Makers of franchises featuring kid actors have to move quickly – the little blighters have a habit of getting bigger.)

The curious case of The Golden Compass's poor US performance has been widely put down to the controversy surrounding its anti-religious themes. Though fudged somewhat in the film itself, the outcry from the Catholic League ("atheism for kids") and the rest may have been fatal. "The Golden Compass didn't hit America's heartland, and that's what killed it, really," says Goodridge. Pullman says: "It was always going to be a difficult film for that reason. The only way to do it is to take the issue bravely to the front and wave it like a banner."

When studios first looked at his trilogy, did they assume they had the next Lord of the Rings on their hands? "Oh they always think X is the next Y," Pullman says. "They have no idea at all about looking forward. Publishers are just the same. They can only see

what's coming in terms of what's been. Nobody was looking for the first Harry Potter, only JK Rowling. Studio and publishers: I don't rate them very highly as originators or visionaries."

And it's not just writers like Pullman who believe there is a failure of imagination at work. Here's Goodridge: "The problem with Hollywood at the moment is that they need an identifiable brand before they go into an expensive movie production. Which is a problem for creativity." So while there are trend-bucking examples in the system – the auteur-cleverness of Christopher Nolan's brooding Batman movies, for one – overall we're looking at reboot ad nauseum: Superman again, a Spider-Man rework. Says Goodridge: "It's no secret. Hollywood is scrabbling to put on the screen properties people already know. They can't take a risk on original ideas any more."