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Disney’s ‘Star Wars’ Merchandise Gives the Force to Younger Generation

While Disney stands poised to benefit mightily from a worldwide box office bonanza with the Dec. 18 arrival of its first “Star Wars” movie, the Magic Kingdom has already begun minting money from another key force that George Lucas personally controlled for 35 years: “Star Wars” consumer products.

At online outlets and retail stores across the country, movie fans are clamoring for products emblazoned with images of old favorites like Han Solo and Luke Skywalker, as well as new “Star Wars” heroine Rey and arch-villain Captain Phasma.

In the first year following “The Force Awakens,” the power of “Star Wars” products could produce $5 billion in revenue, predicts analyst Tim Nollen of Macquarie Securities. That’s a jaw-dropping figure, given that the six previous “Star Wars” films over 38 years produced an estimated $20 billion in sales, making the film franchise the most successful for product licensing in history.

Disney does not release details of its financial deals with its galaxy of licensees, but Macquarie estimated that the entertainment giant receives an average of 10% of sales, higher than the typical 7% to 8% fee. That would result in a whopping $500 million, compared with the $215 million in annual licensing revenue that was reported when Disney acquired Lucasfilm three years ago from founder George Lucas for $4.05 billion in cash and stock.

Lucas had shrewdly held on to merchandising rights when he cut a deal with 20th Century Fox for the release of his earlier “Star Wars” films. The maneuver (reportedly in exchange for lowering his directing fee by $500,000) boosted Lucas’ net worth, pegged at $5.5 billion.

Disney CEO Robert Iger saw the September 2012 acquisition of Lucasfilm as a major opportunity to expand consumer goods sales — both demographically and geographically.

Where Lucasfilm once adopted a standard brand template worldwide, it now allows individual markets to tailor products to their own needs, notably in emerging economies like China and Brazil. Moreover, while earlier items were targeted to “boys and boys at heart — adult collectors,” said Paul Southern, an 18-year Lucasfilm veteran and a senior VP for licensing on “Star Wars,” this time around, the company is aiming more products specifically at girls and women.

A Galaxy of Products: Star Wars Merchandise Guide

Females are prominent in the wall-to-wall marketing. In an online Walmart ad that pays homage to passing down fandom from generation to generation, a mother quizzes her daughter about why a princess wouldn’t just let the boys rescue her in an emergency. In a tiny voice, the daughter replies that “modern empowered women are unfettered by the antiquated gender roles of a bygone era.” The video has received nearly 21 million views on YouTube.

Weeks ahead of the “Force Awakens” release, demand has been huge, Southern said. The momentum began on Force Friday, when a worldwide September marketing blitz produced 6,000 stories in the media, and 12 billion digital impressions. It continues to build this week as fashion leaders from Halston and Diane von Furstenberg to Cynthia Rowley and Rag & Bone unveil outfits that pay homage to “Star Wars” characters.

A lasting image for Southern is the scene he witnessed at a Toys R Us store in San Rafael, Calif., on Force Friday: Dozens of families with small children lined up for a midnight opening and new product arrivals. “That was mind blowing to me — all these kids out shopping at midnight, with their families,” he said.

Yet Disney is a victim of its own success: The Yoda-heeled shoes are “SOLD OUT,” as is “Star Wars” duct tape at Michaels craft supplies. “We are playing catch-up all the time,” Southern said. “It’s a high-class problem.”

With the film set to open in three weeks (to a projected $200 million at the domestic box office), the new generation of kids coveting light sabers and life-sized Stormtroopers likely will be a force for years to come.

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