That’s No Moon, It’s Disney’s Giant Star Wars Business
The Business of Star Wars, by the Numbers
Star Wars: The Force Awakens is on track to become one of the most successful movies of all time—which means it will put a universe-sized dent in the business world, too. How much, you ask? Fortune breaks down the numbers for the tickets, toys, and TV ads attached to the latest episode of the franchise.
The newest Star Wars film is expected to be one of the biggest blockbusters in the galaxy. With millions in pre-ticket sales leading up to the movie’s opening on Dec. 18, investors are expecting Star Wars: The Force Awakens to rake in as much as $1.5 billion.
The movie is a big deal for the entertainment industry, which has struggled this year to come up with a major, cross-generational hit (as evidenced by staggeringly low numbers on Memorial Day weekend, a traditional industry stronghold).
It’s also a big deal for the myriad companies licensing the Star Wars brand. (For example, collector’s edition toys have sold at auction houses for thousands.) And, of course, Lucasfilm owner Disney (DIS), which has seen its stock surge in recent months.
The J.J. Abrams-directed film is expected to post record numbers in term of ticket sales, of course. But it’s also expected to produce impressive figures for everything else it touches. Here’s a Fortune look at how Star Wars: The Force Awakens adds up.
Expected ticket sales
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Investors predict the new film will make between $1.5 billion to $2 billion at the global box office. Anything less and it could be deemed a failure by some. Or, at the very least, director Abrams won’t be very happy.
Word is that he’s already pretty stressed out. That’s according to his buddy Steven Spielberg, who knows a thing or two about box office hits. “Those totals would make the film one of the highest-grossing movies of all time, but coming up short would still make it a very high-grossing disappointment,” according to Fortune. “Steven Spielberg—no stranger to blockbuster films himself as well as a friend and mentor to Abrams—told CBS’ 60 Minutes recently that Abrams is ‘terrified’ that The Force Awakens could fail to live up to those expectations.”
Regardless, the flick is on track to make the most of any other Star Wars film. But it’s by no means a shoo-in. The film, Episode VII in the series, could very well be a close call compared with the original, Star Wars Episode IV: A New Hope. “But the film would actually have to make more than $2 billion to top the original 1977 film’s inflation-adjusted box office haul of $2.016 billion, according to research firm Rentrak,” as Fortune explained earlier this week.
Top toys
Unsurprisingly, there’s a lot of action on the Star Wars toy front. Sales of related products have been tremendous. Those that haven’t lived up to expectations saw significant overhauls ahead of the new film’s release. And then there’s Sphero, the company behind what may end up being the most popular Star Wars toy of the season: BB-8.
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In November, Hasbro CEO Brian Goldner discussed the impact of Star Wars on the holiday season, saying that sales will likely be very strong in the days leading up to the film’s release. In fact, there weren’t enough products to go around, he said “Over the past few weeks, we had seen some shortage of products that were selling exceedingly well,” he told Fortune’s David Z. Morris in November. “We will not miss sales in the upcoming weeks and months.”
To help prevent that, Hasbro used retailer data to predict the amount of toys needed to be manufactured. “Through many years of energy and work, we have reduced our supply chain timing, particularly from the Orient, down to just eight weeks,” said Goldner. “[That’s] a major improvement from where we were a decade ago.”
The toy craze kicked off on Sept. 4, a.k.a. “Force Friday,” when some retailers opened at midnight to sell The Force Awakens toys.
“Force Friday provided a phenomenal lift for Star Wars, growing sales by six times its recent average weekly sales,” said Juli Lennett, senior vice president of the U.S. toys division at The NPD Group, in a statement at the time. “About $1 of every $11 for the week was spent on a Star Wars toy.”
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According to Jim Silver, editor-in-chief of toy reviews website TTPM.com, the most sought-after Star Wars toy, at least anecdotally, is a Hasbro-made lightsaber.
Google search terms
In the vast universe of Google search terms, Star Wars has no trouble holding its own. The term “Star Wars” began rising way back in October 2012, immediately before Disney announced it would be acquiring Lucasfilm for $4 billion.
In November 2014, Lucasfilm released the first trailer for the film. Star Wars Google searches surged once more.
Related search terms continued to grow in popularity through April of this year when the annual Star Wars Celebrations, a convention for fans, took place in Anaheim, Calif. The October release of the official trailer only helped stoke the flames of fandom.
Disney stock
Disney’s stock price has been on a tear since the entertainment giant acquired Lucasfilm in 2012, giving it control of the lucrative Star Wars franchise. As Fortune wrote then, “The deal seals Iger’s legacy of growing Disney through large acquisitions that expand the Burbank company’s store of unique intellectual property.”
In 2013, Lucasfilm announced that J.J. Abrams would direct The Force Awakens. Disney shares continued to rise. The stock has continued to be on the up-and-up (through it did take a brief dive earlier this year).
Last month Fortune examined the case for investing in Disney, noting that there has been interest in the company’s shares because of the upcoming Star Wars film release. (But perhaps not enough to offset concerns about ESPN, which is hurting as cable subscribers cut the cord.)
“In August, Disney lowered its revenue expectations as consumers continued to drop cable at an unexpected rate, leaving 3 million fewer households with access to ESPN, its stalwart sports network,” Ryan Derousseau wrote. “For the first time in years, investors say, the movie business is the main factor driving Disney’s stock. The big question is whether growing revenue from blockbusters can offset losses from the cord-cutting trend.”
Halloween costume sales
It wouldn’t be a Halloween without Princess Leia, Darth Vader, or even a Wookie running around.
The most Googled Halloween costume this year? Anything related to Star Wars, according to Vogue. The National Retail Federation agrees.
“As we’ve seen for several years, Hollywood and pop culture both have a tremendous impact on how adults and their children decide to dress the part each Halloween, and it’s evident some of the biggest newsmakers of the year will be out in full force this fall,” NRF CEO Matthew Shay said in a statement.
In September, the firm expected over 1.8 million children to don Star Wars costumes while collecting their candy. The NRF continued, “Star Wars characters ranked 5th for adults this year after tying for 12th last year: 1.4 million adults will channel Han Solo, Princess Leia, Yoda or another beloved Star Wars character this Halloween.”
TV advertising
To make investors happy, Disney and Lucafilm have spent millions on advertising and marketing.
“Star Wars is setting a new water mark for the entertainment industry when it comes to co-branding for a movie,” said Sean Muller, CEO of iSpot.tv. “There are already 19 brands running Star Wars movie tie-ins, including Duracell, General Mills (GIS), Campbell’s (CPB), Verizon (VZ), Kraft, and CoverGirl, amongst others.”
Lucasfilm has spent $22,340,091 to place The Force Awakens trailer 1,466 times across 44 networks, the firm added. It also calculated that 618 of those showings took place in prime time.
But besides trailers, iSpot.tv found that “$51.4 million has been spent advertising other Star Wars properties, such as action figures, costumes, and video games.”
The firm likened Disney’s strategy toward marketing the new Star Wars film to Universal’s recent efforts with the Minions franchise. “For Minions, Universal spent nearly $25 million placing variations of the trailer, but extended the reach of their efforts by leveraging the movies characters in co-branded promotions with brands such as Tic-Tac, McDonald’s (MCD), and General Mills,” according to iSpot.tv.
And at the end of the day, Star Wars is so popular that it pretty much markets itself.