Star Wars and its seemingly unending list of characters and storylines has captured
the attention of fans for more than 40 years. And over this time, the stories originally
created by George Lucas have spawned 11 feature films, a growing list of TV shows, and more
Star Wars toys than Endor has forests. There may be no other entertainment franchise in
the U.S. that's enjoyed the same long-term success of Star Wars, and that's why in this
episode of The Bottom Line, we're taking a closer look at how the space opera about a
moisture farmer from Tatooine has become an out-of-this-world success for Disney.
Disney hasn't always owned Star Wars, of course. The company acquired the franchise from George
Lucas back in 2012 for just over $4 billion. That might seem like a huge sum, but Disney
has earned back its initial investment and plenty more since then. Take, for example,
the latest films in the Star Wars saga. Since Disney's purchase, there have been four new
Star Wars films, and a fifth one -- the last installment of the newest trilogy -- is about
to be released. These four films have grossed a combined worldwide ticket sales of more
than $4.8 billion. This makes Star Wars the No. 2 top grossing film franchise, second
only to Marvel's Cinematic Universe, which is also owned by Disney. Each of the Star Wars
films released under Disney has brought in $1 billion or more in ticket sales -- save
for Solo, which made only $450 million. The Force Awakens, the first film and the latest trilogy,
earned more than $2 billion in worldwide ticket sales. Episode IX, The Rise of Skywalker,
is likely to be a Death-Star-sized success for Disney, as the film will be the final
conclusion to the original Star Wars story that began all the way back in 1977.
But aside from making money hand over fist from blockbuster Star Wars films, Disney is
also using the franchise to launch its new video streaming service into hyperspace.
One of the biggest draws of the company's new streaming service, called Disney+, has been
the first live action Star Wars Show called The Mandalorian. Disney+ boasted more than
10 million subscribers just a few weeks after its launch, and while it's not clear that
The Mandalorian is the biggest contributing factor to the signups -- because, well,
it's easier to steal plans for the Death Star than it is to get video streaming figures from
Disney -- it's likely that the new show has had a significant positive impact on Disney+'s
early success. Bob Iger, Walt Disney's CEO, said on the company's recent earnings call
that "the first live action Star Wars series is unlike anything audiences have seen before
on any platform, and it's a strong indication of the quality and the storytelling that will
define Disney+." And it appears that this move is already paying off for Disney, because
according to some third-party data, The Mandalorian is one of the most in-demand TV shows right now,
outpacing Netflix's Stranger Things, based on streaming data, social media engagement,
and other online research metrics. And, in true Disney fashion, the company is
poised to capitalize on this Star Wars interest in the fullest degree. Disney already has
an Obi-Wan live action show starring Ewan McGregor reprising his role from the prequel
trilogy that will debut on Disney+ sometime in 2021. Additionally, Disney will also release
another live action show based on the Rogue One character Cassian Andor that will be a
prequel to the 2016 movie. The combination of classic Star Wars films and brand-new shows
means that Disney has an unprecedented potential to benefit from Star Wars on its new streaming service.
But there's still two more ways that Disney
is benefiting from its Star Wars purchase, and it involves turnstiles and toys,
lots and lots of toys. Just before The Force Awakens hit theaters in 2015, Disney launched a massive
Force Friday event, where coordinated unboxing videos of new Star Wars merchandise were shown
on YouTube just as the merchandise was hitting store shelves and online stores worldwide.
Force Friday was a massive success for Disney and spurred an estimated $1 billion in sales
in just one day. Of course, that wasn't the extent of sales. The estimated 12 months sales of Star Wars
merchandise in the year following The Force Awakens' release is between $3 billion and $5 billion.
And last but certainly not least, Disney is
just beginning to benefit from Star Wars through its new Star Wars Galaxy's Edge lands that
recently opened up at both Disneyland and Walt Disney World. Each park came with a price
tag of about $1 billion, and while some reports indicated that initial demand wasn't strong
for Galaxy's Edge, Disney has pushed back on that idea. The chairman of Disney's parks
has said that "Galaxy's Edge has exceeded every expectation we've had." Disney's parks
are an extremely important part of the company's overall business. For the full fiscal 2019 year,
revenue from its Parks, Experiences, and Products segment increased by 6% to more
than $26 billion. With the new Star Wars lands just getting started, there's plenty of time
for Disney to reap the rewards from future travelers to the outer rim.
Disney has perfected the system of creating massive box office hits that become vehicles
for selling merchandise and theme park tickets long after the films leave theaters. With
Star Wars, Disney is plugging an extremely popular story and characters into its lucrative
formula to generate billions of dollars for years to come. And with the company benefiting
from Star Wars in entirely new ways through its video streaming service, there's virtually
no end to how valuable this interstellar franchise will be for Disney.
Thanks for watching this video. Do you think Star Wars will continue to be a runaway success
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