TainoMoreiraPereiraLuis_Assignment_4.docx

A Market Analysis for
Lucasfilm Ltd. (Star Wars)
Luis Taino Moreira Pereira
Full Sail University
Project & Portfolio II: Business and Marketing
May 28th, 2023

EXECUTIVE SUMMARY
The purpose of this report is to analyze the commercial impact of Lucasfilm’s
franchise Star Wars and evaluate the current state and future outlooks of this intellectual
property (IP). Star Wars is one of the world’s biggest franchises of all time which
revolutionized entertainment as we know it. Lucasfilm’s parent company, Walt Disney
Company, is using the production studio to fabricate new IPs set in the same universe but
in the format of TV shows for their streaming service, Disney+. This report includes
suggestions and findings to help realize how sources of income such as merchandise were
affected by this change of objective.
In order to stay relevant in the market and build a stronger bond with services and
products offered by Disney, recommendations include utilizing the stories and characters
in development and fitting them into a film format, searching for better results in the box
office, merchandise, and impact in the industry.

OBJECTIVE
This report aims to discover how Lucasfilm Ltd. is losing the opportunity to expand
its IP in the entertainment market. The information has been put together to show how the
company’s decisions led to negative performance in areas of marketing and merchandise,
as well as weakened brand relevance. So how can Lucasfilm revert its current situation,
keeping consumers excited about both its new and legacy brand and storylines?
RESEARCH METHODOLOGY
All information present in this report was gathered during May of the year 2023.
Data collected from the internet and the online database NexisUni are described as external
and secondary, some qualitative and most of it quantitative. The majority of the
information is as current as May 2023. The challenge encountered in the market was the
lack of visuals matching my objectives, which led me to create a chart based on the data
collected throughout this research.

RESEARCH AND KEY FINDINGS
Lucasfilm Ltd., also known as Lucasfilm, is an American entertainment production
company founded in 1971 by George Lucas. Intellectual properties from the company
include Indiana Jones, Willow, and Star Wars, one of the biggest franchises in the history of
entertainment and the product to be analyzed throughout this document. In addition to the
multi-billion-dollar catalog, Lucasfilm was also responsible for the creations of Industrial
Light & Magic (ILM) Skywalker Sound, THX, and many others which revolutionized
technology in entertainment (Edelman, 2020). For adventure lovers, Star Wars tells
engaging and breathtaking stories, following cinema’s iconic heroes and villains in a galaxy
far, far, away. Through TV, games, animation, live-action, and full-length films, fans will be
rewarded with a memorable journey of good against evil, family, loss, and most
importantly faith.
After the Walt Disney Company purchased Lucasfilm in 2012, the Star Wars brand
has never been stronger and more present in the entertainment industry (The Walt Disney
Company, 2012). The acquisition allowed Disney to integrate the galaxies of Star Wars into
their products and services, such as theme parks and Disney+, the company’s streaming
service. A strength that makes Star Wars stand out from other franchises in the market,

both inside and outside the Disney conglomerate, is the consumer demographics.
According to Digiday (2015), “The typical follower is a 46-year-old married male with
children. He is financially well-off, making between $75,000 and $124,000” (para. 3). The
first movie hit theaters in 1977, meaning that there was a pre-established group of
consumers for a long time, not having to totally rely on new audiences, who grew up and
will continue to consume new content but now under a business which prioritizes family
entertainment.
However, the biggest advantage of having Disney by your side is their power in the
many areas of entertainment, and how they easily integrate all brands they own into their
areas of activity. Johnston (2022) wrote financial research to break down different
segments and how much they compose their revenue and net income. According to his
article, the segment of parks, experiences, and products had a revenue of US$7.2 billion,
and the reason for that is how Disney integrates Star Wars in parks and with the
merchandise. Galaxy’s Edge, a Star Wars area in Disney’s Hollywood Studios Florida has
one of the most desired
attractions by tourists, a
perfect place to sell
merchandise from the
movies. Refer to Appendix
A for more detailed data
regarding this financial
research article. Talking

more about merchandise, was always something extremely important for Disney's revenue,
and they always had a marketing strategy plan for each Star Wars release, with one of the
best examples being the toys. Lightsabers, action figures, costumes, LEGOs, and many other
products were sold right after Disney’s first Star Wars movie “The Force Awakens”. “Of
course, that wasn't the extent of sales. The estimated 12-month sales of Star Wars
merchandise in the year following The Force Awakens' release is between $3 billion to $5
billion” (Neiger, 2019, para. 23).
Being an essential part of the Walt Disney Company brand has its disadvantages as
well. Even though Disney is the one responsible for overseeing many legal, economic, and
political aspects of the business, and even others that are relevant in today’s world like
environmental sustainability, the company has also the decision-making power over all
their acquisitions. Production companies such as Marvel Studios, PIXAR, and Lucasfilm
must follow not only the content creation schedule established but also have Disney’s green
light for every plan and change along the way. Therefore, there is a lack of creative control
and decision-making from Lucasfilm.
As of right now, in May 2023, Lucasfilm has produced over 10 Star Wars projects,
including a new trilogy, two spinoff movies, and brand-new TV shows for Disney+
(Lucasfilm, 2023). All 5 theater releases under Disney’s command were able to gather more
than US$1 billion at the box office, except “Solo: A Star Wars Story”. With only around
US$400 million worldwide, followed by a commercially successful but lackluster “Rise of
Skywalker”, the last movie of the new trilogy, Lucasfilm and Disney CEOs Kathleen Kennedy

and Bob Iger decided to focus on telling stories throughout TV shows on Disney+ (The
Hollywood Reporter, 2023).
New stories were created and told through live-action TV shows, a format we’ve
never seen before in the history of Star Wars, with fans praising two out of the productions:
“The Mandalorian” and
“Andor”. According to
Boyle (2022), the first two
seasons of “The
Mandalorian” are the most
watched shows on
Disney+, adding up to
almost 14 billion minutes watched by audiences. In addition to that, “Andor” brought the
political and ethical conflicts present in the Star Wars franchise to the front stage, with
more mature storylines and better-developed characters. As of right now, the Walt Disney
Company is currently using Star Wars media to develop new shows to populate the
Disney+ catalog. According to a graph available in Statista (2023), Disney+ already lost 6.4
million subscribers since the fourth quarter of 2022, and they need to stay relevant in
streaming with their brands and offer the same quality content as other services such as
Amazon Prime, Netflix, and HBO MAX. Even though they were a success to audiences and
critics, they couldn’t have commercial success like the movies.

There are a few differences between the two formats which explains the different
integration performances between Star Wars and Disney products and services. Firstly, it
must be stated that movies are easier to commercialize through marketing than TV shows.
Films offer audiences an
immersive experience with new
characters and stories, and the
connection established in a
cinema theater resonates with
people way more than consuming
a show, which is not only longer
but also lacks the experience
cinema provides. It is one of the
reasons new movies will always
be made, to sell new audiences the experience of watching a new entry, just like others
before them, making them feel special. The information is extremely relevant when we
remember that children will be the ones responsible for buying most of the products.
According to Brickset (2023), an online forum with all data regarding LEGO sets, there
were a total of 55 brand-new LEGO sets created and commercialized for Disney’s sequel
trilogy. On the other hand, only 18 sets were made for all four live-action TV shows.

CONCLUSIONS
Lucasfilm was able to maintain itself on top of the market's chain for more than 40
years, with its biggest challenge nowadays being how to keep the relevance it acquired
throughout the decades. Under Disney’s management, they were able to deliver audiences
memorable cinematic experiences and amazing stories once again, and now are heading
towards a new direction for the company. However, this change of course is causing a
decrease in the relevance of the brand. Even if they decided to pursue a new way to explore
their IPs because of the criticism received with the two last films released, the box office
results of all movies of the franchise were outstanding, with only one out of eleven movies
not having a US$ 1 billion performance (The Numbers, 2023). Refer to Appendix B for a
more detailed chart.
In addition to the box office value, the films were better integrated into products and
services from Disney than TV shows. There are elements from all the trilogies everywhere,
from theme parks to products you can find in Disney’s stores, with the characters from
these stories resonating with fans the most. Therefore, Disney’s decision-making is
negatively affecting its income, Lucasfilm’s potential, and most importantly the Star Wars
franchise's relevance in the entertainment industry.

RECOMMENDATIONS
Based on the research in this report, a strategy both the Walt Disney Company and
Lucasfilm should follow is to redirect their production focus to movies. Lucasfilm can select
one of the many stories in the pre-production stage and transform it into a first movie of a
trilogy. Set a one-year time frame for shooting and 6 months of post-production, so while
they’re finishing the project, marketing departments at Walt Disney Company identify how
they can fit this new intellectual property into their theme parks attractions, food and
beverages, toys, and licensing. Audiences will of course be anticipating a new entry in the
Star Wars universe, so there is a guarantee of commercial success. In addition to that, by
telling a new story and featuring new characters newcomers may sympathize and become
consumers.
Lucasfilm then would continue the story, developing the following installments,
while Disney would use its power to strengthen the connection consumers have with the
new Star Wars by releasing the movie after its theater run on Disney+, as well as
announcing a spinoff series for a secondary character, guaranteeing fans subscriptions to
new content being produced.
Concluding, by changing strategic and business tactics, Lucasfilm would be able to
continue increasing the mythology and culture of the universe they created, with Disney
overseeing production not only to assure that their requirements are being met but also to
see how they can establish a connection between the brand and consumers via services and
products. A recommended future research would be the specific reasons why there were

fewer consumers eager to purchase products from the TV shows as well as why Disney
didn’t have the marketing tools and power to properly commercialize their most famous
exclusive show on streaming.

REFERENCES
Boyle, K. (2022, April 1). ‘The Mandalorian,’ ‘Loki’ Top Disney+ Most-Watched Shows.
https://www.tvinsider.com/1039017/the-mandalorian-loki-disney-plus-most-
watched-shows/
Brickset .(2023). Star Wars. Brickset: LEGO set guide and database.
https://brickset.com/sets/theme-Star-Wars
Image of The Mandalorian and Cassian Andor [Photograph]. (2023, March 2).
https://static1.cbrimages.com/wordpress/wp-content/uploads/2022/08/Andor-
Mandalorian-header.jpg?q=50&fit=contain&w=943&h=&dpr=1.5
Digiday. (2015, December 22). Spoiler alert: The typical ‘Star Wars’ fan is a wealthy 46-
year-old male who loves comics. Digiday. https://digiday.com/marketing/star-wars-
demographics-male/
Disney to Acquire Lucasfilm Ltd. (2012, October 30). The Walt Disney Company.
https://thewaltdisneycompany.com/disney-to-acquire-lucasfilm-ltd/
Edelman, G. (2020, May 14). George Lucas is the Most Important Filmmaker of All Time. No
Film School. https://nofilmschool.com/George-Lucas-Most-Important-Filmmaker
Johnston, M. (2022, November 28). How Disney Makes Money. Investopedia.
https://www.investopedia.com/how-disney-makes-money-4799164
Lucasfilm Ltd. Logo [Photograph]. (n.d.).
https://upload.wikimedia.org/wikipedia/commons/thumb/2/25/Lucasfilm_logo.s
vg/1200px-Lucasfilm_logo.svg.png

Neiger, C. (2019, Dec 31). How Big Is “Star Wars” for Disney? The Motley Fool.
https://www.fool.com/investing/2019/12/31/how-big-is-star-wars-for-
disney.aspx
Star Wars: Galaxy’s Edge at Walt Disney World Resort [Photograph]. (n.d.).
https://lumiere-a.akamaihd.net/v1/images/image_fc20bfb1.jpeg
Star Wars Revenue Throughout Our Galaxy [Infographic]. (n.d.).
https://i.visual.ly/images/star-wars-revenue-throughout-our-
galaxy_502918b6851aa_w1500.jpg
Statista. (2023). Number of Disney Plus subscribers worldwide from 1st quarter 2020 to
2nd quarter 2023. https://www.statista.com/statistics/1095372/disney-plus-
number-of-subscribers-us/
The Hollywood Reporter. (2023, April 12). ‘Star Wars’: Behind Lucasfilm’s (Mostly) Risk-
Averse Movie
Bets. https://advance.lexis.com/api/document?collection=news&id=urn:contentIte
m:680K-STX1-JB0P-B2GX-00000-00&context=1516831
The Numbers (2023). Box Office History for Star Wars Movies. https://www.the-
numbers.com/movies/franchise/Star-Wars#tab=summary

Appendix A
Screenshot of the chart created by Matthew Johnston. Available at https://www.investopedia.com/how-disney-makes-
money-4799164
Appendix B
Screenshot of a Excel graph I made using information from The Numbers and The U.S. Inflation Calculator, available at
https://www.the-numbers.com/movies/franchise/Star-Wars#tab=summary and
https://www.usinflationcalculator.com/ respectively.

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