$150K

Back when George Lucas was making the first Star Wars film, he had the chance to negotiate for an additional $150K from Fox Studios, since American Graffiti had been a success at the box office. Instead, he left that money on the table, in return for licensing and merchandizing rights. At the time, it probably seemed like a weird decision to industry observers.

But of course he went on to parlay that move into a fundamental restructuring of the way movies are monetized. It’s hard to believe that before 1977, the whole concept of making a fortune through toys, T-shirts, novelizations, etc. wasn’t really on the radar. Now, like it or not, we live in the world that George created. Revenue from these sources has earned hundreds of millions for Lucasfilm.

Today a friend sent me a link to a video in which the chief creative officer of Sphero is interviewed as he demonstrates their computer-controlled toy version of the new Star Wars robot (if you’ve seen any of the trailers, that robot is in the very first shot). Watching this video, I was struck by how completely the concept of “owning the character” has seeped into the DNA of big budget sci-fi movies.

He talks about his childhood, and how he and his colleagues grew up watching the Star Wars films. Then he says, talking about Sphero’s development of the toy: “For us it was a chance to make the character that we always wanted to buy.”

Something about this sentence jumped out at me. It seemed oddly off, as though some essential concept had been misplaced. I spent some time today trying to figure out what, exactly, was bothering me.

And then I had it. It was the way his description had completely erased the line between the magic of seeing a movie character and the concept of buying one. As though they were one and the same thing.

But they are not the same thing at all. No matter how commercial all of this gets, a little kid goes to the movies not to engage in a commercial transaction, but to visit exciting new worlds, where they hope to encounter wondrous characters and stories.

And that, my friends, is precisely what is ingenious about the monetization strategy that George Lucas pretty much invented: After little kids go to the movies, they don’t buy toys and other merchandise.

Their parents do.

4 Responses to “$150K”

  1. I was at a large store this week. He man in front of me, in his 70s, was buying an 18″ tall talking Yoda doll. It was $229. That’s a serious engagement with character.

  2. admin says:

    Indeed. And that man is a seriously engaged character!

  3. J. Peterson says:

    Even before Lucas, another famous empire was built from movie spin-off merchandising: Disney. Which, of course, owns Star Wars now.

  4. admin says:

    Which is not a coincidence. :-)

    By the way, while it is true that Walt Disney (the man himself) pioneered merchandise tie-ins as far back as 1929, it can be argued that the snowballing success of Star Wars merchandising prompted the Walt Disney Corporation to put much more focus into that aspect of its operations.

    Disney Consumer Products was only created in 1986, and the first Disney Store opened in Glendale in 1987 — a decade after the release of Star Wars.

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