Author Topic: How Exactly Has Star Wars Made $37 Billion?  (Read 1372 times)

Offline Reginald Hudlin

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How Exactly Has Star Wars Made $37 Billion?
« on: November 24, 2014, 06:06:37 am »
How Exactly Has Star Wars Made $37 Billion?
BY GEEK'S GUIDE TO THE GALAXY   11.22.14  |   7:00 AM  |   PERMALINK

In 2012, George Lucas sold his company Lucasfilm to Disney for the staggering sum of $4 billion. Even more staggering is the $37 billion that Star Wars has raked in over the past 40 years. The Star Wars universe now comprises a vast array of products, from movies and TV shows to videogames and toys. But it all started with one movie, Star Wars (later Star Wars: Episode IV — A New Hope), whose modest $11 million budget was less than the average studio comedy at the time. The film’s brash, upstart quality is part of its appeal.

“It feels like an indie flick that just happens to have the most amazing, eye-popping stuff in it,” says Brian Stillman, who recently directed a feature-length documentary about Star Wars toys called Plastic Galaxy.

Those toys played a major role in the film’s success, and helped bankroll its sequel, The Empire Strikes Back. But as with Star Wars itself, no one expected the toys to be popular. The demand caught fledgling toymaker Kenner completely off guard, and they resorted to selling empty boxes stuffed with promissory notes in lieu of actual Christmas merchandise. Even Lucas himself had no inkling about the public demand for Star Wars.

“He didn’t even imagine action figures would be a big thing,” says Chris Taylor, author of the new book How Star Wars Conquered the Universe. “All he saw when he was first thinking about products that might emerge from Star Wars was an R2-D2 cookie jar.”

Taylor’s book explores many of the financial concerns that shaped Star Wars, as well as some of the strategies that helped it succeed. It wasn’t all smooth sailing. After the Emperor was vanquished in Return of the Jedi, toy sales fell dramatically. The story seemed over. As a boy Taylor resorted to imagining that the Emperor had been cloned, a plot twist that Lucas might have used to boost sales.

“He should have dropped a few more hints that the Clone Wars just basically cloned every character in the Kenner line,” Taylor jokes.

The eventual success of Timothy Zahn’s novel Heir to the Empire proved that there was still an audience for Star Wars, which helped motivate Lucas to release the special editions. Though controversial among fans, the special editions did help fund the prequel trilogy, which in turn grew the Star Wars brand into a multibillion-dollar franchise which seems set to continue indefinitely.

“He was a smart businessman, George Lucas,” says Stillman. “He really knew what he was doing.”

Listen to our complete interview with Chris Taylor and Brian Stillman in Episode 126 of the Geek’s Guide to the Galaxy podcast (above), and check out some highlights from the discussion below.

Brian Stillman on the Early Bird Certificate Package:

“The thing about movies, you didn’t license with them because they were there and gone pretty quickly. They didn’t last very long, and unlike a TV show, which gives you an advertisement for that toy every week, every time it airs, once the movie’s gone there’s nothing in theory to compel you to go buy the toys. So Kenner approached the whole thing with easy-to-produce, inexpensive-to-produce objects like games, paper products, things that were cheap. And when they saw how successful Star Wars was, pretty quickly they realized they had to have toys. Well, at the time it took about a year to get a toy onto the stands. They realized they’d never make it in time for Christmas. Star Wars came out in May, it’s only a few months away, so what they did was—it’s kind of the brilliance of a guy named Ed Schifman, who pitched this idea to Kenner and to the president Bernie Loomis—which was, what if we release a ‘redemption kit’? Essentially an empty box. It was called the Early Bird Certificate Package, and you got an empty cardboard envelope, and in it was a little certificate you could mail away, and then Kenner would send you the figures when they were ready, which turned out to be around February or March. So for Christmas you’d run downstairs, tear open the wrapping paper, and you’d get a piece of cardboard.”

Chris Taylor on funding The Empire Strikes Back:

“There were definitely a lot of points during Empire Strikes Back when Lucas was basically running out of money, because he’d put up the collateral himself. It was all his winnings from Star Wars, and he was just basically doubling down by doing Empire Strikes Back. And there was a loan with Bank of America, but that loan was suspended when Lucasfilm payroll hit a million dollars a week. That just triggered some automatic stop on some new manager’s bureaucratic system, and so there were a lot of times when they desperately needed an influx of new cash. I believe the Christmas of ’78 was the crucial season where they made way more money than they expected out of the [action] figures. … So it’s kind of poetic that all of these kids in Christmas of ’78 acting out the further adventures of Luke Skywalker actually almost literally funded the future adventures of Luke Skywalker.”

Chris Taylor on how financial concerns shaped Star Wars:

“[Lucas] very much treated The Empire Strikes Back as an ongoing business concern. You have to have insurance if Mark Hamill, god forbid, has another car crash, what are we going to do? Well, let’s drop in a mention of Luke’s sister—who was not Leia at this point—being across the galaxy, and that sort of became Yoda talking about the ‘other.’ That was what it referred to. Lando was the insurance against Han Solo. And you start to introduce the Emperor with the idea that he would become the main villain, and Vader would just be killed off in the next film, and you sort of start to focus on the big bad boss. Because Lucas still didn’t get that Vader was as big a deal as he was—this of course is before he came up with the ‘I am your father’ revelation. So yeah, it really is a case of a businessman buying insurance.”

Chris Taylor on fan-made R2-D2s:

“I thought that was a genius move on the part of Kathleen Kennedy and J.J. Abrams to use the R2 Builders Club, which if folks don’t know, it’s this club of about seven or eight thousand people around the planet, who are all endeavoring to create a screen-accurate, functional R2-D2. And I’ve seen a number of their R2-D2s, and they are just gorgeous, and everyone flocks to them. They go to Maker Faire events, and people just love it, but it does take a long time to do. Then again, 7,000 people, that’s a very powerful fanbase to have on your side. They’re better constructed than the ILM versions, and they don’t go racing off and crashing into walls and losing their domes, as they used to, but also simultaneously it’s a way to ingratiate yourself with fandom. So absolutely a genius business move, and I wouldn’t be surprised if we see more of that.”