How George Lucas Reinvented The Movie Industry

Star Wars has always been a movie franchise that has a somewhat unique relationship with its fans. On the one hand, they get angry to the point of violence when George Lucas commits his various “blasphemies” against the movies they feel they’ve somehow taken ownership of. Nevertheless, they’re still more than willing to throw down their money whenever a new Star Wars movie, book, game, or other media comes out.

How can we explain this contradiction? How can Star Wars fans have so much love for something they often don’t have a positive thing to say about? I think the answer boils down to the fact that Star Wars fans appreciate the art, but don’t understand the underlying business direction that has supported the series over the last 40 years, and cemented George Lucas as one of the greatest visionaries in mass media history.

Moichandising, Moichandising…

Bottom line: Star Wars is a business first and a work of art second. George Lucas has always been a smart marketer in the sense that he knew how to maximize his movies’ earning power (and provide him with bigger budgets to make his later, grander movies), and much of that revolves around his decision to focus on other revenue streams besides just people paying to go the movies.

In fact, George Lucas willingly accepted a substantial cut in his salary for directing the original movie in exchange for all the rights to the movie’s intellectual property, merchandising, and control of later installments in the series. Though it seemed like an absolutely insane move for 20th Century Fox to literally give away such a goldmine, there were some good reasons at the time for them to accept these terms.

For one, Fox thought this would be a great deal since they had a lot of doubts about how successful Star Wars could be. Nothing like it had ever been done before, and George Lucas had actually been trying to sell the movie for years, but everyone he shopped the project around to either didn’t understand it or thought it was far too unconventional to appeal to Joe Moviegoer.

Even though Fox eventually agreed to get behind Star Wars, they were pretty sure that it would flop and the rights to it would be worthless. George Lucas obviously had a plan that far exceeded what anyone could have envisioned back then, but the folks at 20th Century Fox felt pretty confident at the time that he was nuts and was actually coming out on the short end of the agreement.

Also keep in mind that this was back in the mid 70s, and the movie merchandise business wasn’t anything like it is today. There were no action figures, video games, lunchboxes, talking banks, costumes, toy lightsabers, or anything else you can probably find an aisle full of today at Walmart. Back then you MIGHT be able to find t-shirts or posters for some movies, but that would be about it.

But that was in the mid-70s, and it didn’t take long for Fox to realize what a huge mistake they’d made by failing to change their thinking on that.

Action Figures

Even though 20th Century Fox didn’t think much of Star Wars at the time, George Lucas had a plan and, as we’ve seen, turned Star Wars into a merchandising empire. The action figures alone have brought in nearly $30 billion total, and even though you and I might hate Jar Jar, young Anakin, or Watto, you can bet that action figures of each are worth millions and millions of dollars in sales, hence why they’re there.

And hey, you know what else is great? Doing prequel and sequel trilogies means that you get whole new casts of characters, and… you guessed it, each will get their own action figure, Halloween costume, DLC in the video games, and so on. Sure, we didn’t need BB-8 in Episode VII since he didn’t do anything R2-D2 couldn’t have, but hey, merchandising!

And that is where the business genius of George Lucas comes to the forefront. He realized very early on that the revenue generated by movie tickets and home video sales would actually be ancillary to his broader model, and that the smarter way to approach the movies would be to design them as two and a half hour long commercials for his toy business.

Have you ever been at the store and seen those action figures of people who were floating around in the background (you know, the Cantina band, Zam the bounty hunter from Episode II, Mon Mothma), and wondered who was buying them? Well, the answer is actually a lot of people, mostly diehards and collectors.

Have you ever looked back on your childhood, especially if you grew up in the 80s and 90s, and wondered what the hell made you a fan of half the stuff you wasted years’ worth of Christmas and birthday presents on? I know I have a garage full of Transformers, GI Joe, M.A.S.K., Thundercats, Ghostbusters, Teenage Mutant Ninja Turtles, and WWF figures that I can lay out in a line to visually recreate my childhood, and it’s because they all sprung out of George Lucas turning TV and movies into merchandise commercials.

In fact, the only reason most of the characters even have names like “Mon Mothma” instead of “Rebel Leader Lady From Return of the Jedi” is because they needed something to put on the action figure boxes. 80s cartoons like Transformers and Teenage Mutant Ninja Turtles took this formula and ran with it, but George Lucas was doing it before almost anybody and changed the way the entire movie business was structured.

Redefining The Movie Business

This also changed the way movie studios do business, because there is absolutely no way George Lucas would have gotten the deal he got during his initial negotiations with 20th Century Fox if that conversation happened today. If anything, the movie business has gotten to the point where the merchandising aspect is driving the rest of the movie production business instead of the other way around like it used to be. The tail is now wagging the dog.

Ever wonder why it seems like so many less “quality” new movies get made, and instead we get reboot after reboot of older storyline universes like comic books and cartoons? It all revolves around the merch, because if the only way a movie is going to make money is through the box office and DVD sales, it’s going to be a tough sell in Hollywood.

Sure, your story about a crack dealer who has an epiphany, cleans up his act, and goes on to end religious war worldwide might be very good, and in terms of pure storytelling, better than 99% of what’s out there. But will it make a good PS4 game? Will anyone want to buy Crack Dealing Peacemaker coffee mugs or t-shirts? How about Cracktion figures? (Yeah, I thought that was clever too.)

The answer to most of those questions is probably no, but the movie studios know you will be tripping over yourselves to throw cash down for your 40th Spider Man toy. As long as the money’s rolling in, they don’t give a crap what anyone thinks about Ben Affleck playing Batman, and in fact, they may have even cast him as Batman specifically to create a buzz that would get people spending money on the 300th Batman movie of the last 25 years.

Brand Awareness

That built-in brand recognition is also important because, to a great extent, Star Wars made it a necessary element of getting movies made. The original Star Wars trilogy was the bridge between the era when the top movies in a given year were originals and the era where that same list was dominated by sequels. If you don’t believe me, just ask how many sequels and trilogies you saw in the 70s compared to the 80s.

Star Wars brought us into an era where movie studios were looking for franchises since that helped them justify the initial investment more than “one and done” movies. What does Crack Dealing Peacemaker do after he’s gotten clean and saved the world? Is there material you can use to make a sequel?

Probably not, but John Rambo’s always got some new country they can drop him in to create havoc. Indiana Jones always has new ancient ruins to explore. More idiots are going to go to Camp Crystal Lake and decide to split up when they realize they’re being hunted by some freak in a hockey mask.

One of the reasons the need to justify those investments exists is because, due to the special effects and other underlying infrastructure supporting the movie/merchandise business, both from a technical and marketing standpoint, the investment that movie studios need to make in a given movie in 2016 is about 12 times, adjusted for inflation, what it would have been in the 70s.

Nostalgia

So, if you’re a movie studio and are trying to decide whether to spend that $150 million on Crack Dealing Peacemaker or Superman vs Dicksmasher, you’re going to spend it on the franchise with the track record proven over 30 years. The 30 years part, by the way, is also a part of the formula since there is also a lot of money to be made from the nostalgia factor.

Yeah, we’ve all seen these losers who are in their 40s, live in their mother’s basement, and have foregone romance in favor of creating a collection of Star Wars merchandise more valuable than the Crown Jewels. But for every person like that (who, make no mistake, generates plenty of revenue for Lucasfilm), there are people who are the same age who DO have kids, and can’t wait to indoctrinate them into the same Star Wars experience they grew up on.

It’s kind of like in the old days when fathers would decide that their son’s new hobby was collecting baseball cards since that’s what they did when they were kids back in the 50s. Whether or not the kid is interested, the dad is going to go out and drop tons of money buying all kinds of crap that, really, amounts to them reliving their own childhood.

Same idea applies here, and that’s why the movie theaters for Episode VII were loaded with kids who were so young they were barely able to talk. Disguising it as a bonding experience (or maybe even convincing themselves that’s what it is), people who grew up on Star Wars couldn’t wait to get their kids into that theater, and whether the movie was good, bad, or even watchable was only a secondary consideration to the Star Wars experience they saw themselves passing down to a new generation.

It’s actually a pretty interesting cycle if you step back to look at it objectively. The kids are turned into Star Wars fans when they’re too young to even realize it and, in true cultlike fashion, will grow up and pass that on to their own children. They won’t even catch on that it’s all a Palpatine-esque, decades-long marketing plan, sort of the same way most people never realized that there was ever anything to Star Wars other than one man’s desire to create the greatest merchandising machine that ever existed.