Star Wars: The Force Awakens won’t open until December 18. But this week the public will see the equivalent of a red carpet premiere for a key part of Disney’s effort to build Star Wars Inc. into a commercial force unlike anything Hollywood has ever seen.
The entertainment giant will team with toy and merchandise manufacturers and retailers in an unprecedented collection of Internet and store-based events to introduce and sell consumer products. They’re calling it “Force Friday.”
“Star Wars toys have always played an important role in how our fans interact with the saga,” Lucasfilm president Kathleen Kennedy says. The new products “will continue that tradition.”
The “Force Friday” name is a little misleading. Although sales begin then, Disney will begin to introduce the products this afternoon starting at 2:45 PT. A video stream on its Star Wars YouTube channel will show personalities from its Maker Studios programs unboxing Star Wars-related toys and other merchandise. The events will take place across the globe beginning in Australia, Japan, and South Korea before moving to Europe, Latin America, and the U.S. Don’t be surprised if you see a feature this week on ABC’s Good Morning America.
Retailers will do their part to turn this into a mega-event: Toys “R” Us, Target, Walmart, and World of Disney stores will begin selling Star Wars stuff shortly after midnight on Friday. Toy maker Hasbro is the leading manufacturer with other products coming from game producer Electronic Arts, card company Topps, Rubie’s Costumes, Lego, and Tobar novelty toys. Others are expected to offer an array of electronic devices.
“I’ve never heard of launching a toy line with all guns blazing three months before a [movie] premiere,” says Marty Brochstein of LIMA – the International Licensing Industry Merchandisers’ Association. “It’s like a Harry Potter book or an Apple iPhone.”
Disney, manufacturers, and retailers need to pull out all the stops.
Disney paid $4.1 billion in stock and cash in 2012 for director George Lucas’ Lucasfilm– which owned Star Wars. For accounting purposes, the entertainment giant figures the franchise will have what’s called a “useful life” of 40 years.
Product sales are key to the effort to keep the franchise thriving for so long. Consumers have already spent more than $20 billion on Star Wars merchandise since 1977 when the first film was released. The licensed product efforts were successful, despite a famously bad bet in 1999 that fans would buy lots of products based on Jar Jar Binks — an annoying character introduced in Star Wars: Episode I — The Phantom Menace.
Analysts are optimistic that The Force Awakens will rouse far bigger sales. Consumers around the globe could spend $5 billion on Star Wars merchandise and publishing over the next year or so — well ahead of the $3 billion generated by Disney’s Cars 2 — Macquarie Securities’ Tim Nollen forecasts. “This would easily net Disney about $500 million in licensing and retail revenue,” he says.
If he’s right, then it suggests Disney’s commanding an extraordinary 20+% royalty rate on the wholesale price of the licensed goods, which typically run close to half of retail.
Brochstein says that “collectors and adults with a soft spot for Star Wars” probably will dominate the initial sales. If Disney agrees, then the initial products may include a lot of crafts, artwork, clothing, and kitchen goods. “Everybody’s been tight lipped about what they are doing,” he says.
Toys and other kids’ items should pick up steam as we approach the holiday season. Hasbro has a lot of skin in that game. The toy company guaranteed Disney as much as $225 million through 2020 back in 2013 when the companies revamped their merchandising alliance to account for the Lucasfilm deal and Star Wars.
It sees Force Friday as just the beginning of an ongoing marketing campaign.
“What you see on September 4 will then be refreshed with new characters as we get closer to the film, as the film introduces people to new characters,” Hasbro CEO Brian Goldner told analysts in July. “We’ll then have characters that will follow that in time for Christmas and into New Year. And then you will have new waves of product and characters that will come in first quarter, second quarter and throughout 2016.”
The company probably will see a bump in 2015 revenues from the late-year Star Wars sales — and as much as $300 million in additional revenue for all of 2016 — MKM Partners’ Eric Handler estimates. A stand-alone film, Rogue One: A Star Wars Story, “should carry sizable action figure potential” around its December 16, 2016 release, he adds.
Meanwhile, gamers look forward to Electronic Arts’ Star Wars: Battlefront, a multi-player shooter video game due for a beta release in early October ahead of the official release on November 17.
EA plans to have a first-person shooter Star Wars release in time for each of the upcoming films, the company told investors in July. Although it doesn’t have a timetable, “trust that you will see multiple Star Wars titles both on console and PC as well as on mobile,” CFO Blake Jorgensen says. “We have at least one mobile title that’s going to come out this year and we have more in the process as well. So lots to come on Star Wars.”
Wedbush Securities’ Michael Pachter says he “would not be surprised” if gamers buy 15 million copies of Battlefront by the end of EA’s fiscal year in March. That would be huge, although still behind Activision Blizzard’s Call of Duty‘s 25 million in lifetime sales.
Retailers are making a different kind of bet: They have to determine how much shelf space to devote to Star Wars products vs other options.
For now, the major players are “making a major commitment” to the franchise, Brochstein says. “This is going to be the big conversation for Christmas. Everybody wants to be part of it.”
In addition to its sales effort, Target has a website where fans — including celebrities such as Minka Kelly, Chris Hardwick and Bobby Moynihan — offer memories of favorite Star Wars moments. Toys “R” Us, Walmart, and Amazon also have special pages dedicated to products from the franchise.
Most Toys “R” Us stores will more than double the floor space they had devoted to Star Wars products — and will devote more than 100 square feet to the franchise throughout the year, including many of its overseas destinations.
“It’s been one of the perennial bestsellers whether there’s a movie or not,” Global Chief Marketing Officer Richard Barry tells me. The promotional push for products tied to the new film will be bigger than anything he has seen, including for Harry Potter.
He couldn’t discuss many products in detail, but says that “we’ve seen innovation play in a different way than in the past.” With creative use of electronics and robotics, among other things, “there are so many things that will make you say, ‘Wow, that’s so cool.'”