It's hard to believe, but it's been 43 years since the original Star Wars was released in 1977. Made for $11 million and debuting initially at only 32 theaters, the movie became a cultural milestone that spawned a franchise worth untold billions of dollars. It's truly a remarkable outcome for a film set "a long time ago in a galaxy far, far away...".
Many important business lessons can be learned by the Star Wars franchise, one of the most successful in movie history and still going strong after more than 40 years.
This all started with a science fiction movie that few took seriously when it was being produced. George Lucas believed in it and did the work required to make it an overwhelming triumph in movie-making.
What lessons can be learned from his success?
1) Believe in Your Product
Lucas developed the idea for Star Wars when he was making his hit film, American Graffiti. Made for $777,000, American Graffiti grossed $115 million for Universal Pictures, an extremely high profit margin. Despite this, Universal turned down Lucas' proposal for the Star Wars movie.
One might see where Universal was coming from since directing a hit teen comedy or a cult film like THX 1138 doesn't necessarily translate to directing a hit science fiction movie. Like the record companies that turned down the Beatles, they failed to see a future moneymaker when they saw it.
Despite the rejection, Lucas kept working on his project and was rewarded when 20th Century Fox agreed to finance the movie.
2) Do The Work Without Reinventing the Wheel
Star Wars was a massive summer hit when it was released but it wasn't a groundbreaking movie in itself. Lucas used comic books and old movie serials such as Buck Rogers as foundations for the movie's plot. He would also use old-fashioned inspiration for Raiders of the Lost Ark and its sequels. If it worked in the past, it will work in the future - even in outer space.
For the dogfights in space, Lucas went through old war movies such as Battle of \Britain and used the aerial footage as a basis for the battles between the TIE fighters and the X-Wings. The gunfights between the Rebels and the Stormtroopers wouldn't have looked out or place in any western or war movie. It was all about rah-rah action with clearly defined good guys and bad guys.
His film THX 1138 was a bleak film for adults about the future which had little action and sparse dialogue. Star Wars, set in a galaxy far, far away, was a film for kids of all ages with wall-to-wall action scenes depicting the timeless battle of good vs evil- in this case, Luke Skywalker vs the evil Darth Vader.
3) Don't Be Afraid To Tinker
Luke Skywalker was originally supposed to a be a general and an older man. Lucas thought better of it and made Luke a young man who was learning how to be a true warrior who would defeat the bad guy and save the galaxy, something than every male teen would want to identify with. Lucas also changed his name from Luke Starkiller to Skywalker. It was a subtle change but an effective one.
Han Solo was originally supposed to be a gilled alien with green skin. Lucas wisely changed him into a good-looking quick-draw renegade loner who played by his own rules. This obviously appealed to teen boys and girls who might have found Luke Skywalker a bit too square.
Stars Wars with an elderly Luke and a green alien Han Solo would have possibly made Universal Studios correct in their initial estimate of the movie's success. A bit of tinkering on Lucas' part turned the movie into a billion-dollar franchise.
Lucas also had the last word on casting. As he relates, “I was under this great pressure from 20th Century Fox to cast ‘names’...They wanted me to take Jodie Foster or Amy Irving – I wanted Carrie Fisher. I wanted new faces. That’s why I chose Mark Hamill and Harrison Ford.”
4) Take Less Now For A Whole Lot More Later
When shooting on Star Wars wrapped up, Lucas was owed about $500,000 from Fox studio in directing fees, up from the $150,000 he made for American Graffiti.
The film went over budget, from $8 million to $11 million. When Fox executives were shown an advanced screening of the film, they weren't impressed, Apparently several fell asleep. Lucas' friend Brian De Palma said the rough cut was one of the worst things he had ever seen (said in jest but still a bit hurtful).
After all that, Lucas made a request to Fox executives, which went something like this:
Lucas: About the $500,000 you owe me, let's make a deal that will save you some money.
Fox Executives: We're listening.
Lucas: I'll take only $150,000 if you give me the sequel and merchandising rights for the movie.
Fox Executives (thinking any sequels or merchandising revenue were a fantasy): You got a deal.
What happened next, of course, is on par with Universal's decision not to be involved with the film in the first place. Fox did save a few hundred thousand dollars but gave up billions in future revenue. They hoped Star Wars would at least make their money back but didn't anticipate the huge success of sequels like Empire Strikes Back and Return of the Jedi or the enormous avalanche of products such as toy light-sabers and action dolls. Merchandising revenue from movies was seen as being a given for a company like Walt Disney but not for a science fiction film with a cast of mostly unknowns. Of course, Disney will now make billions in merchandising sales from the Force Awakens.
Sir Alec Guiness, ironically enough, was also paid $150,000 but he was additionally offered 2% of the producer's profits for his role as Obi-Wan Kenobi. He didn't think much of the film, being a classically-trained British actor, but he signed on and would eventually make over $100 million!
5) Know Your Customers
The executives at Fox didn't like Star Wars when they saw the finished product. They thought it was boring or hard to understand or packed with characters that were too weird. Some fell asleep during the viewing. This probably led them to accept the trade of money for future rights.
George Lucas, on the other hand, had a good idea what the general public wanted in an action movie, even if it was set in a far-off galaxy. He also knew that even a character such as Chewbacca would be instantly beloved, given that he got the idea for him by observing his huge dog in the front seat of his car.
After all, what's cuter than your pet dog riding along with you, whether in a car or in the Millenium Falcon?
In hindsight, the success of Star Wars looks to have been a foregone conclusion but the steps in obtaining that success took both hard work and a lot of determination a vision through, no matter what the 'experts' believed.
