Brand aids: 5 lessons from Disney's deal with Lucasfilm

May the force empower you to make better business decisions.

Disney’s purchase of Lucasfilm provides some valuable insights into how to bolster your small business brand through deals and partnerships.

The past 10 years have been among the most crucial in Disney’s quest for brand resilience. The strongest brand in the world got there by fortifying itself with a host of new ones. Disney acquired Pixar for US$7.4 billion in 2006, Marvel for US$4.24 billion in 2009 and Lucasfilm with its Star Wars franchise for US$4 billion in 2012.

Its first film for the franchise, Star Wars: The Force Awakens, was released in December 2015 and is the third highest grossing film in box office history with box office gross in excess of US$2 billion.
 
On the back of this prolonged success, Brand Finance, a global marketing company that values brands and weighs up their strengths, now estimates the value of the Star Wars brand to be US$10 billion. So what on earth can smaller companies learn from the company which owns the rights to everything from R2-D2 to Spider-Man, Buzz Lightyear and The Hulk?

Don’t vertically integrate – do deals

It may look like Disney is about buying up everything, but it actually shares its intellectual property with outside companies frequently. The Star Wars franchise exploded for the company well before The Force Awakens hit cinemas.
 
There were Halloween costumes, toys, games, posters and school supplies. Fast-food chains and buses were all in on the act while food manufacturers made Star Wars cookies and Lego had building blocks ready to click together. 

These companies were allowed to appropriate the Star Wars “name” at a far cheaper rate than normal, and for Disney, the companies helped it to disseminate the Star Wars franchise into all kinds of markets it has no control over in the lead-up to the movie.
 
The point here is to make your brand as ubiquitous as possible through partnerships and deals.
Find synergies with companies that have no immediate link to your own and find new ways to sell your ideas using other companies’ marketing and distribution channels. Even Disney can’t do it all.

Read next: How Disney, Coca-Cola and McDonald's are fighting to remain relevant

Make the old new again

The Lucasfilm buyout was much tougher than the purchases of Pixar or Marvel. There were fears about George Lucas handing his vision over to Disney. In a way, Disney had already addressed that fear after its first two acquisitions, as it was plain that Disney did not recreate or interfere with the characters, ideas and culture already created by Pixar and Marvel.
 
With Pixar and Marvel, they didn’t fix anything that wasn’t broken. Most people believed the company could be trusted with R2-D2 and Princess Leia. Disney learnt how to assimilate.

There are a lot of benefits to doing business like LucasFilm.

 However, the company still had to refresh the Star Wars brand, which had become stale and, in the opinion of some observers, almost self-cannibalistic. Rebranding should bring old and loyal followers with it while attracting a younger market into the fold.
 
This is exactly what The Force Awakens achieved, weaving the original film’s nostalgia in with a new storyline.
 
Rebrand with intelligence. If you chase the new trend, be wary not to alienate what got you there in the first place.

Drip feed and keep ’em in suspense

 Disney got the ball rolling just after acquiring Lucasfilm, setting up www.starwarscelebration.com. In November 2014 came the first teaser trailer. In April 2015, the annual Star Wars Celebration was held in Anaheim, California, and in July it featured at Comic-Con in San Diego, where director J. J. Abrams appeared with some of the original cast.
 
This was followed by “Force Friday” on 4 September, when fans could buy loads of franchise paraphernalia.
Use the force to better your business
 
Disney leaked products all the way up to Force Friday, used “YouTube influencers” to break news, gave sneak previews of products and deliberately spilt inside information. The second trailer arrived in October and the company was laying a very nice trail to the 18 December general release.
 
Long but well managed marketing campaigns can have a powerful psychological effect on buyers. Build enough momentum over enough time and give customers a reason to watch their calendars, possibly change their schedules and ensure they get the merchandise they want.
 
It’s all about the fear of missing out and the desire to be first. If a business builds on the idea of the opening, the sale or the new product bit by bit, then you stand a greater change of creating an aura and expectation that will keep audiences/clients/customers hungry. In this regard, Disney took a big bite out of Apple.

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Make it accretive from day one

In December 2015, analysts predicted The Force Awakens merchandise would generate US$5 billion over a 12-month period. The company’s greatest strength was to find the film’s right character to promote and this has been the BB-8 Droid.
 
This was the big Christmas toy for 2015 but Disney didn’t stop there. It manufactured more than 100 new Star Wars toys and sales between Force Friday and the end of 2015 reached US$1.75 billion.
 
As expensive as the Lucasfilm buyout was, merchandising helped grow the company’s earnings and kept analysts’ forecasts buoyant. Wall Street loved the deal and Disney’s share price has doubled since the acquisition.
 
Businesses that believe they have a strong brand – whether it be in a character or even a charismatic leader – should leverage that popularity in multiple ways.
 
If a staid company such as publisher Penguin Books can put its book covers on coffee mugs, there’s little reason why others can’t plant logos in smart places. It’s also a win-win deal – the customer buys a product which acts as free advertising.

Content proof yourself as best as possible

Disney is an empire of diversity which does not rest on its laurels. What it fears most is being disrupted by smaller, nimble players. It does not want another Pixar entering the fray, which could explain why it was the most expensive of all its recent big deals – it was a threat to Disney’s pre-existing animation franchise.
 
It’s worth remembering Disney will always have some expensive duds in its ranks. Its televised sports network, ESPN, is losing subscription numbers and films such as John Carter and The Lone Ranger failed at the box office.
 
Disney has the luxury of quietly retiring some products if it chooses, but in most cases it hasn’t bought to kill, but rather to curate. Pixar remains creatively “unDisneyed” and Lucasfilm retains some of the marketing rights to its output.
 
The lessons here are many. Buy out a competitor if you can, but think about using the best of it and even allowing it the freedom to do what it does best. Another option is to diversify.
 
Not all lines will work, so keep looking for new ones; times will change. Mickey may still make it onto the front of an Apple Watch, but the mouse no longer rules in our time.


February 2020
February 2020

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