Next spring the movie merchandising industry will know whether it's about to go bust or burst into stratospheric profits.
Why is such a vast business so dependent on one single day in the future? Because that's when the world will know whether George Lucas's "Star Wars" prequel, "The Phantom Menace" has bombed or boomed at the US box-office. And that in turn will decide whether the unprecedented billion-dollar deal between Lucasfilm and toy manufacturer Galoob Inc was worth the investment made by this global producer of cuddly kiddy fare.But before we all become submerged in "Star Wars" soapsuds, shorts and remote-controlled robots, it's worth realizing that, pervasive as these sales stratagems may be, they are a pale imitation of what was perfected more than 60 years ago.
"Movie tie-ins to manufacturers were more sophisticated in the twenties and thirties," says Peter Kramer, a lecturer in film studies at the University of East Anglia in England, who has made a specialty of movie merchandising. "More effort was put into the relationship between the studio -- which would provide specific marketing advice to local exhibitors -- and the cinema-goers at the grassroots level in the community. Merchandising was more efficient than now because, whereas today it is only coupled to a handful of specific films, back in the thirties it was applied to every single studio release."
The localized marketing for theater-owners was contained in "press books", in which a studio like MGM would boast about their 1934 film "Dinner At Eight": "The merchandising of Jean Harlow was never better demonstrated than by the dozens of 'Dinner At Eight' fashion and shoe windows". And to make sure that local exhibitors understood just how much merchandising muscle a star like Harlow could carry, the book's next page told them: "Tie-ups: A Million Dollars Worth of Promotion!!! 250,000 Coca-Cola dealers will exploit 'Dinner At Eight."'
Nowadays, film critics complain about ubiquitous product placement in every film from Huey helicopters in "Apocalypse Now" to James Bond's choice of a distinctly downmarket Smirnoff vodka martini in his latest 007 escapade. But this sort of hit-or-miss merchandising is just so much wasted screen space compared to the product tie-ins to stars during Hollywood's heyday. Try this one for size: MGM's audacious fashion tie-in for the Joan Crawford vehicle "Letty Lynton" in 1931.
First off, the studio sends out to Macy's in New York stills of the star wearing her gown by Adrian of Hollywood for the opening ballroom scene. Macy's then contracts out the manufacture of the dress so that it is ready in time for the film's release. MGM then sends to Macy's photographs of Crawford and that dress emblazoned with the movie's title, the other stars, and the studio logo, as well as all the theaters where "Letty Lynton" will appear. The result: in 1931 Macy's sells half a million copies of Adrian's dress.
Two decades earlier those figures would have been impossible to attain. As cinema outgrew its innocent infancy, the roots of movie merchandising lay in the early studio's use of locally copied couture to add glamour to an emerging star system. But what was once a nickel-and-dime sideline for a couple of fan magazines and a single Hollywood shirt manufacturer on Sunset Boulevard would burgeon into one of the great success stories of 20th century capitalism. Up to the thirties America was in deep recession. It was producing the goods, but its wage-poor workers couldn't afford to buy them. The country needed to turn those workers into consumers. And movie merchandising effected that change.
Warner had million-dollar contracts with General Electric and General Motors, MGM had a tie-in to Bell phones as well to Coca-Cola, Paramount was with Westinghouse and all the studios had links to radio networks like CBS and NBC. Just as movie plots today are accused of being over-influenced by product placement, directors in the twenties and thirties were encouraged to junk historical costume dramas and instead -- in the words of Cecil B De Mille -- "shoot modern stuff with plenty of clothes, rich sets, and action". That way, every other film could show off the latest Bell telephone, General Electric oven or Westinghouse refrigerator.
It wasn't confined to consumer durables. Marlene Dietrich advertised Gimbel's slacks, mothers dressed their little girls in Macy's copies of Shirley Temple outfits, Garbo popularized the beret and trench coat and Barbara Stanwyck did the same for snoods. Lana Turner made sweaters big business.
But for shifting retail off the screen and on to the shelves, the Princess Diana award for product persuasion had to go to Joan Crawford. "Paris may decree this and Paris may decree that," huffed Silver Screen, "but when that Crawford girl pops up in puffed sleeves, then it's puffed sleeves for us before tea-time."
The stars were acutely aware of the commodity connection. One Sunday, walking down Hollywood Boulevard, MGM cameraman Joseph Walker spotted the press baron William Randolph Hearst with his lover, the actress Marion Davies. "The couple were peering intently at a display of frocks in the window of a fashionable shop," he later wrote. "She was using a cameraman's blue viewing glass. Watching her I knew she was evaluating the gowns in the shop window -- a sure way of knowing just how those dresses would photograph."
All these products were targeted at young women; because, as contemporary market surveys revealed, housewives were making up to 80 percent of the purchase decisions for the home. During the fifties, though, the audience slowly changed from women to boys, and the studios let their merchandising arms wither away. Also, as Kramer points out, there were hard economic facts confronting the studios: "Between 70 and 90 percent of every dollar spent at the box office goes directly back to Hollywood. If you license a toy, it might sell for $50, but the studio's licensing subsidiary will get back a lot less than 10 percent. Merchandising during Hollywood's golden era was therefore done not so much to make money outside the studio, as to advertise the studio's latest release and get film-goers coming back week after week.
However, there was a way through the merchandising roadblock and that was for a studio to possess its own retail or toy division. And as Kramer points out, "Disney always had one. They licensed comic books and toys even before they made 'Snow White,' their first full-length feature in 1937."
But compared to money-making machines like MGM or Warners, the Disney studio was a Mickey Mouse operation up until the early eighties. No, the man who created modern movie merchandising was a young film-maker aware that Warners had finagled him out of the profits on his last film, "American Graffiti." So when the contract with 20th Century Fox for the rights to "Star Wars," his next film, came up for negotiation in 1976, George Lucas steeled himself.
"If you're an executive," recalled Steven Spielberg, "suddenly you realize that if you're going to go into business with George Lucas, you are no longer in the 20th Century Fox business, you are in the George Lucas business, and George is going to call every shot."
The director not only insisted control of the production would be in the hands of his own company, but Lucas also retained sole ownership of the music and soundtrack rights, as well as the copyright to any sequel. And last but not least, he won 100 percent of any tie-ins.
Fox, says Kramer, "made one of the worst business decisions since the Native Americans sold Manhattan for a few beads." But the prescient Lucas probably already knew this because within weeks of the contract being signed he told fellow director John Milius, "I'm going to make five times as much money as Francis (Coppola did with "The Godfather') on these science fiction toys. This is a Disney movie," he said. "It cost 10 million, so we're going to lose money on the releases but I hope to make it back on the toys."
Lucas sold himself short. From a budget of $10 million, Star Wars grossed $1.5 billion. And the toys? By the end of last year the film had doubled that amount in licensing fees. "What happened in 1977," says Kramer, "was that the mainstream film industry recognized the potential to make huge profits out of products that were "directly' based on films that they had released."
It had been done before by Disney, albeit on a small scale, and it had been done without selling studio products. But Lucas saw that both strategies could be combined to incredible effect. "From that moment on," concludes Kramer, "merchandising became definitive of what Hollywood does."
Thus the proliferation of Hollywood studio shops sprouting up and the likelihood that seekers of "Pain and Panic" dolls (from Hercules) or interactive Quasimodos (from "The Hunchback Of Notre Dame") will be knocking their doors down this Christmas. But Kramer also foresees a possible return to a more varied past in merchandising's immediate future. Because, behind his innocuous revelation that, "Leonardo DiCaprio refused to turn himself into a 'Titanic' toy," he believes the studio shop's loss could have a social silver lining for everybody else.
The overwhelming success of "Titanic," he observes, "was built on the back of women's repeated attendance, particularly young girls." That message, he believes, will get through to the studio's retail arms which will not only respond with a likely return to traditional tie-ins to female products, but could also slow down the production of boys' "action" toys and instead create toys specifically targeted for the first time at girls. "If that takes off," says Kramer, "it will change merchandising as we know it."
Distributed by Scripps Howard News Service