Merchandising



CASE STUDY: SPIDER-MAN

The first Spider-Man film, released in spring 2002, represents an interesting case of movie merchandising. The character of Spider-Man has existed for almost 40 years, created at Marvel Comics in the early 1960s. Prior to its film debut in 2002, the character had been featured in comic books, multiple cartoons, and briefly, a live-action television show. The comics alone are sold in more than 75 countries and in 22 different languages. In spite of this, it took more than fifteen years for a movie on the character to be made. After a complex history, Variety reported that Columbia/Sony acquired the rights to produce a feature (including sequels) and rights to produce a live-action TV series for a cash advance of $10–15 million.

GEORGE LUCAS
b. George Walton Lucas Jr., Modesto, California, 14 May 1944

Early in his life, George Lucas was interested in car racing; however, a serious accident changed his plans. He studied film at the University of Southern California film school, where he made several student films, including the prize-winning THX–1138: 4EB (1967). In 1969, Lucas and Francis Ford Coppola formed American Zoetrope, which produced the full-length version of THX 1138 (1971).

Lucas went on to form his own company, Lucasfilm Ltd., and in 1973 released American Graffiti (written and directed by Lucas). The widely acclaimed and innovative Star Wars was released in 1977, after Lucas had established ILM (Industrial Light & Magic) to produce the visual effects. The movie had been turned down by several studios before Twentieth Century Fox agreed to distribute it. In a fortuitous move, Lucas agreed to forgo his directing salary in exchange for 40 percent of the film's box office and all merchandising rights. The movie broke box office records and earned seven Academy Awards ® , as well as selling so much merchandise that the Star Wars series is credited with influencing the growing trend of merchandise accompanying blockbuster films, and has created huge profits for Lucas.

In 1979, Lucas Licensing was formed to oversee the licensing of products and characters from Lucas's films and claims to be one of the most successful film-based merchandising programs in history. Lucas was also involved with Steven Spielberg in creating the Indiana Jones series, another blockbuster series accompanied by merchandising handled by Lucas Licensing. The company claims over $8 billion in consumer sales worldwide, including, according to its website, the best-selling boys' action toys of all time, 60 million books in prints, and more than 60 New York Times best sellers, and merchandise sold in over 100 countries. In recent years, Lucasfilm has emphasized entertainment software (a Lucasfilm term commonly applied to video games), which is developed and published by LucasArts, formed in 1982.

Lucasfilm, Ltd. handles the business affairs of the companies in George Lucas's empire, including THX, Ltd., Skywalker Sound, Industrial Light & Magic, and Lucas Productions. It not only produces film and television products, but is also involved with visual effects, sound, video games, licensing, and online activity. Important technical developments from Lucas's companies have included the THX System for motion picture sound, plus many developments in visual effects. The company's creative and administrative headquarters is located at Skywalker Ranch in Northern California.

Lucas is considered one of the most successful directors in the industry, and Lucasfilm can arguably be called one of the most successful Hollywood production companies, with five of the twenty highest-grossing films of all time and seventeen Academy Awards ® . The company is estimated to have received $1.5 billion in sales in 2001.

RECOMMENDED VIEWING

THX 1138 (1971), American Graffiti (1973), Star Wars (1977), Star Wars: Episode III—Revenge of the Sith (2005)

FURTHER READING

Champlin, Charles. George Lucas, the Creative Impulse: Lucasfilm's First Twenty-Five Years. Los Angeles: Abrams, 1997. The original edition was published in 1992.

Lucas, George, and Sally Kline, eds. George Lucas: Interviews. Jackson: University Press of Mississippi, 1999.

Lucasfilm, Ltd. http://www.lucasfilm.com (accessed 3 December 2005).

Pollock, Dale. Skywalking: The Life and Films of George Lucas . New York: Harmony Books, 1983.

Janet Wasko

With such a long history, it is not surprising that the film was so highly anticipated. Sony Pictures arranged extensive promotion and planned wide-ranging merchandise for the $139 million blockbuster. Spider-Man was to be, as the Business Week 's Hollywood reporter put it, "the

George Lucas.

holy grail" for Sony: a film that would create opportunities for endless tie-ins in the form of fast food, video games, toys, and sequels. The film debuted in May 2002, earning almost $115 million in its opening weekend and over $400 million by the end of November 2002, making it the highest grossing comic book adaptation as well as the highest grossing movie of the summer. Such numbers are particularly impressive in light of estimates that as much as 80 percent of a film's revenue now comes from the sale and rental of videos and DVDs, as well as other merchandising opportunities.

Not surprisingly considering the long, convoluted history that brought Spider-Man to the big screen, the licensing deals for the film were complex as well, with Marvel Enterprises and Sony sharing the royalties in a 50/50 deal managed by the newly formed Spider-Man Merchandising L.P., created in early 2002 to manage the character. In a separate deal, Marvel Enterprises—the publisher of the Spider Man comics—also granted the company rights to the comic book version of the hero.

And, so, the merchandising began. The rights to produce every kind of product imaginable were licensed to hundreds of different companies: everything from action figures, games, and dolls to skateboards, bicycles, and birthday party supplies. Spider-Man costumes became the odds-on favorites around Halloween, and "Spidey" images adorned everything from boxer shorts to sheets and comforters. The video game rights were sold to Activision, which produces games not only for Sony's Playstation 2, but also for the Microsoft-owned rival X-Box system and for home computers as well. Sony, Marvel, and the various licensees have benefited greatly from the merchandise bonanza, which continues to attract revenues (as well as prompting lawsuits over the dispersal of these revenues). For instance, a company spokesman reported that toys from Spider-Man (the movie) generated over $100 million in total revenue for Marvel in 2002. Subsequently, Spider-Man 2 appeared in 2004, generating huge box-office returns and additional merchandise, as well as reinvigorating the market for previous Spider-Man products generally. Spider-Man 3 began filming in 2005 for planned release in 2007.

SEE ALSO Publicity and Promotion ; Video Games ; Walt Disney Company

Cones, John W. The Feature Film Distribution Deal: A Critical Analysis of the Single Most Important Film Industry Agreement . Carbondale: Southern Illinois University Press, 1997.

——. Film Finance and Distribution: A Dictionary of Terms . Los Angeles: Silman-James Press, 1992.

Goldsmith, Jill. "Licensing Show Has Little to Buzz about From H'Wood." Variety (12 June 2000). http://www.variety.com/article/VR1117782473?categoryid=18&cs=1&query=%22 licensing+show%22&display=%26quot%3Blicensing+show %26quot%3B (accessed 7 April 2006).

——. "With Billions in Play, Studios Keep Toying with Pic Wares." Variety 387, no. 4 (10–16 June 2002): 7.

Litwak, M. Reel Power: The Struggle for Influence and Success in the New Hollywood . New York: Morrow, 1986.

Monahan, Mark. "A Magic Formula to Print Cash." Daily Telegraph (29 September 2001). http://www.telegraph.co.uk/arts/main.jhtml?xml=/arts/2001/09/29/bfpott29.xml (accessed 7 April 2006).

Wasko, Janet. How Hollywood Works . London and Thousand Oaks, CA: Sage, 2004.

Janet Wasko



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