How Star Wars revolutionized movie merchandising

The 1977 Star Wars "early bird certificate package" mail-out (image courtesy Wikipedia)

CPO Editorial: Usually our staff have written the 'Moment In History' articles but we found this story written by Sheena Goodyear at CBC to be a good summary of the Star Wars merchandising story, past and present.

How the force of Star Wars revolutionized movie merchandising

By Sheena Goodyear, CBC News, originally posted Dec 14, 2015

Chances are, you or someone you know is going to wake up this Christmas to find Star Wars loot under the tree.

Disney has released hundreds of new Star Wars products ahead of the Dec. 18 premiere of The Force Awakens, and at least one industry analyst estimates the company will make $5 billion on Star Wars merchandising in the next year alone.

That's $1 billion more than Disney paid creator George Lucas in 2012 for rights to the franchise, which, by some estimates, has earned more than $37 billion over the last 40 years, mostly from licensing and merchandising.

This might not seem surprising in an era where merchandise is a key component of movie marketing. Disney's animated film Frozen, for example, has made at least $1 billion in product sales since the movie came out in 2013, and stores still can't keep pace with the demand.

But believe it or not there was a time when blockbuster movies didn't have their own toy lines, video games and cross-promotional campaigns with fast food chains.

Then Star Wars came along to change everything.

A long, long time ago ...

Before Star Wars hit theatres in May 1977, movie merchandising was rare, said Brian Stillman, director of the documentary Plastic Galaxy: The Story of Star Wars Toys.

Lucas was able to negotiate with Fox to obtain the Star Wars licensing and merchandising rights, which nobody could have predicted would one day be worth billions.

"Movies never saw the value in having toys, and toy stores never saw the value in partnering up with movies," Stillman said. "Until Star Wars, no one thought it could be done. And even when Star Wars came out, you have to remember, no one thought it could be done. The biggest toy companies in America turned it down."

Kenner, a mid-range company that has since merged with Hasbro, bought the exclusive Star Wars toy-making rights for a measly $100,000.

"Their attitude was, 'We'll put out a few things, paper products, games, puzzles - things that are easy. And then in a week, two weeks maybe, when this movie's gone, we'll have made some money on it," he said.

"Well, Star Wars wasn't going anywhere, and they quickly realized this movie is huge. It's a million times bigger than anyone ever expected."

Kids, in particular, loved the movie, and they wanted Star Wars toys for Christmas. But Kenner couldn't make them in time for the holiday season.

"So for Christmas '77, kids would get something called the early bird set, which was a cardboard envelope, and in it was a sheet of stickers, a fan club membership card and a coupon that you could mail away for four action figures, and those figures would be delivered in February-March 1978," Stillman said.

"And kids ate it up. Because they got to come downstairs on Christmas morning and get something that said Star Wars on it."

Disney's well-oiled machine Suffice it to say, times have changed. Star Wars now belongs to Disney, a well-oiled corporate machine with years of movie marketing and merchandising experience.

"Disney made it very clear when they bought Lucasfilm that they were spending $4 billion for two things - No. 1, the intellectual property rights to make more Star Wars movies, and No. 2, to increase the amount of merchandise," Steve Sansweet, Lucasfilm's director of specialty marketing between 1987 and 1996, told CBC News.

Disney unveiled more than 100 new Star Wars products in September during a 24-hour event it dubbed Force Friday. Also, the Lego Star Wars: Droid Tales animated TV series premiered in July, and Electronic Arts released the video game Star Wars Battlefront last week.

You can also buy limited edition designer Star Wars jewelry, while Covergirl has a Star Wars makeup line.

Basically, if you can think of it, you can probably find a Star Wars version of it.

"This is a really exciting time for Star Wars fans," said Sansweet, who holds the Guinness World Record for biggest collection of Star Wars memorabilia in the world. He houses his more than 300,000 items at Rancho Obi-Wan, a non-profit Star Wars museum in northern California.

"I think it's a frustrating time if you consider yourself a completionist collector," he says, "because there ain't no such thing no more."

Disney doesn't disclose how many Star Wars licences it has sold, nor does it reveal the details of its contracts with manufacturers, which range from massive corporations to individual artisans.

"When you look at the licensing, there's not just a wide berth and a wide range and a wide crowd, but the products themselves are moving beyond somebody simply marketing to create an action figure," says Peter Henein, a Toronto-based intellectual property lawyer specializing in entertainment trademarks.

For example, not only does Lego make and sell Star Wars toys, but it's also involved in the Star Wars Lego video game and the Star Wars Lego animated series, which is separate from the Clone Wars animated TV series, which has its own line of Lego toys.

"So when you talk about the licensing, it not only gets intricate, but you're getting into, presumably, a lot of sublicences or very specialized licences to do things that, I think, when you initially thought about it, a toy manufacturer wouldn't be involved in."

Not only does Star Wars have a more powerful marketing force than ever before, but the brand has a wider appeal.

"We have three generations of Star Wars fans," Sansweet said. "I've joked for years that there's a Star Wars gene that gets passed down.

"Things have changed, the world has changed, but there's enough out there to pick and choose from, and I think it's going to be a very Star Wars Christmas for a lot of kids all over the world."

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