The business of Star Wars: the force is with Disney

14 December 2015 9:44 am

Star Wars will become Disney’s big cash cow. After acquiring the Star Wars franchise in 2012 by paying $4 billion for LucasFilm in 2012, Disney has set about running the franchise with the ruthless efficiency of a Galactic Empire. Disney will make a fortune out of that investment at a time when the business is facing challenges like changes in technology and consumer consumption patterns, adverse weather conditions or natural disasters, health concerns and international development and currency movements reducing international demand for its products, increasing its labor or supply costs in non-US markets, or reduce the US dollar value of revenue it receives from other markets.

As the Los Angeles Times points out, "Star Wars: The Force Awakens," which opens Friday, is expected to earn $1.5 billion to $2 billion in global box-office returns. Four more films will roll out over the next four years. Add up all of those box-office receipts, plus merchandise, video games, theme park tie-ins and DVD sales, and the revenue tied to "Star Wars" could top $25 billion over the next five years, based on analyst estimates. And beyond the direct income, "Star Wars" breathes new life into Disney's already mighty corporate empire, giving it new content and characters that it can pump through its many ventures. And it couldn't come at a better time, with changing consumer habits buffeting the company's lucrative television business.

Disney has already been selling Force Awakens products to kids – and for that matter adults - everything from light sabre chopsticks and R2-D2 spice shakers, to AT-ATdog costumes.

The Wall Street Journal points out that Disney has enlisted partners online, including Alphabet Inc.’s Google, which is modifying websites and apps, such as its YouTube video player, with special “Star Wars” graphics. Disney is also taking advantage of cross-branding opportunities among its own units, debuting the final trailer for “The Force Awakens” on ESPN’s Monday Night Football, and with a new ad on its ABC network.

Disney is also expanding its Star Wars theme park offerings that come complete with Jedi training academies. Meanwhile, on the Disney Dream cruise ship, a fussy R2-D2 interacts with you as you enter a brand new Star Wars-themed play.

For Disney, the changes are all part of business.

As Yoda says: “Death is a natural part of life. Rejoice for those around you who transform into the Force. Mourn them do not. Miss them do not. Attachment leads to jealously. The shadow of greed, that is.”