With Star Wars superfans apparently satisfied with the choice just announced of J.J. Abrams to direct the next movie in the franchise, the folks at Disney must be feeling some relief. According to MTV News, at least TheForce.Net is with them. The curator of that fan site, Eric Geller, told its reporter that "J.J. Abrams is a huge Star Wars fan and will bring respect and familiarity to the job."
For those needing a refresher on "the story so far," Star Wars' creator George Lucas sold his empire back in November for $4.05 billion, handing over to Disney all rights to the Star Wars brand and properties. The latter promptly announced plans to launch a third trilogy of Star Wars films in 2015, a move that will keep the brand alive and serve as a platform for selling products to a new generation of fans. But for deeply loyal Star Wars fans—and there are many of them—the news seemed to occasion more angst than excitement. Said one: "I feel sick. It's like having your Mum have an affair and remarry." Another appealed to George Lucas to save his baby from Disney's worst excesses: "Please don't make us regret this George. You still owe us big time for introducing us to Jar Jar Binks." Another registered doubts with a phrase featured in many Star Wars movies: "I have a bad feeling about this."
Customer loyalty like this might seem like a nice problem to have—and it is. But it creates real challenges for the brand that is so admired. It would be one thing if your product's biggest fans loved it unconditionally. But they don't; they expect that love to be rewarded with respect for their preferences. And if they perceive that you are "selling out"—sacrificing the purity they value for higher revenues—they are quick to punish.
The irony here is that the Star Wars franchise has been focused on licensing and new-platform development for years. While the movies pulled in some $4.4 billion in ticket sales, that's only a fraction of the sales of licensed goods, estimated today at $20 billion and counting. (Add to that another $3.8 billion in home entertainment products.)
It's a powerful economic engine, and it propels a whole fleet of income statements. Lego, for example, has sold more than 15 million units of its Lego Star Wars video game. Another beneficiary is The Cartoon Network, which has 2.2 million daily viewers of its Star Wars-based hit, Clone Wars—a show that has even spawned new characters and toys, such as a young Obi-Wan Kenobi. Now in its fourth decade, Star Wars is consistently among the top-five licensed toy brands, bringing in retail sales of more than $3 billion in 2011. "It truly is incredible for any property to remain a top seller within licensed merchandise for such a long time," says Anita Frazier, industry analyst for NPD Group, which tracks licensing.
This stuff isn't all just for kids, either. Perhaps your dog dressed as Princess Leia for Halloween this year. Nor, from the selling side, is it just about big companies like Lego. James Boryla, who growing up worked at a store that sold nothing but Star Wars collectibles, has now taken his own business online through SWseller.com. Tapping the market for childhood nostalgia, he once sold a group of 15 action figures still in their original packaging for more than $3,000. Young and old fans enjoy using Microsoft's Kinect Star Wars game, which allows players to become lightsaber-wielding Jedi knights for a time.
We mention all this licensing lucre not because it is bad for the brand but because it is good. So, just as fans now make their views known to licensed property owners via conversations on social media, perhaps it makes sense for companies to make customers more aware of three commercial realities.
First, creators who don't find ways to monetize their creations slowly lose their hold on the public imagination. Consider Bill Watterson, creator of Calvin and Hobbes. Watterson refused to allow merchandising, limiting products beyond the comic strip to a couple of calendars. He responded to a fan's question about this stance by saying "each product I considered seemed to violate the spirit of the strip, contradict its message, and take me away from the work I loved." From the standpoint of the artist, this is admirable purity. But shift your consideration to the product itself, and isn't such good news. It means that with each passing year, the universe of people exposed to the delights of Calvin and Hobbes contracts. Under Disney, Star Wars' universe will undoubtedly keep expanding.
Second, contrary to received wisdom, bigger does not always mean worse. Sometimes creative juices continue to flow, and the franchise gets even better, as Disney's relationship with Pixar shows. Acquired in 2006 for $7.4 billion, the combined company has released several massive hits since then, including the billion-dollar box office titan Toy Story 3. It's just possible that the new Star Wars films will return fans to something closer to the glories of the late 1970s.
Third, continued investment in a popular franchise means further business growth, new jobs, and new wealth creation. New films will mean new characters who can be turned into Lego figures, new video games, new costumes for your dog. While there's always some danger of a "license to overkill," there's little evidence so far that the public is sated with Star Wars stuff.
It's an almost impossible challenge to stay away from Star Wars lingo when writing about this deal. (That's a testament in itself to the power of the brand.) But it may be a famous line from a rival space franchise that best supports George Lucas's decision to sell. May the galaxies and characters of his creation live long and prosper.