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It was the rise of television that robbed the industry of its huge audience; for most people moviegoing became an event rather than a habit. Because TV managed, by its sheer glut, to make familiarity boring, films could attract the occasional customer by offering something new and daring: giant wrap-around screens and special effects, naughty words and forbidden themes. The problem was that, unlike TV, the movies could not keep manufacturing the same product ad infinitum. You could make your money with Ben-Hur, The Sound of Music or The Graduate; then it was back to the story board to hope for some other hit.
In 1977 Star Wars changed all that.
The film had no stars, an unfamiliar story and a genre (science fantasy) that had been pronounced box-office poison. 20th Century-Fox, which took the project after two other studios had turned it down, had to strong-arm theater owners into exhibiting the film. Everyone was wrong; everything was different. Writer-Director George Lucas showed three ways a movie could make money: by attracting a core audience back to see the same movie three, four, a dozen times; by devising sequels as imaginative, and as successful, as the original film; and by marketing toys, books and other merchandise related to the movie. The writing was there for everyone to see—on the bottom line. Hit sequels have become an event that is also a habit—a new story involving characters as familiar as Archie Bunker. The moviegoing cycle has returned to Point A: what audiences are looking forward to is déjá vu.
Now a hit film can generate a multimedia chain reaction. Art Murphy notes that "there are seven potential markets for a new movie: the theaters, pay TV, free TV, cassettes, television syndication, merchandising and sound tracks. The theatrical release of a film is now the introduction of a new product. With the right handling the product could have a shelf life of five, seven, even 20 years." The evidence is everywhere this summer: Annie dolls, TRON video games, Blade Runner magazines, Star Trek books. One industry expert jokes that the Holmes-Cooney fight was a merchandising spin-off from Rocky III. Little E.T. is expected to generate a lucrative ranch-house industry all his own, with dolls, clocks, lunch pails and Christmas toys.
Merchandising is nothing new to the movies either: Gone With the Wind spun off dolls, board games, Bibles and Scarlett O'Hara Panties. But Star Wars perfected the technique. Taking a cue from his pal Lucas, Spielberg retained control of the E. T. merchandising. Producer Kathleen Kennedy, 29, conducted the negotiations. "A year ago," she recalls, "it was hard to convince the heads of the big department chain stores that a little space creature was going to be lovable to all ages. I showed them E.T.'s picture and they went 'Ugghhh!' " When Kennedy approached the M&M Co. to tie its chocolate candy pellets into the movie script, she was rebuffed. Instead, E.T. follows a trail of Reese's Pieces to Elliott's house—and M&M executives are standing around with chocolate melting on their hands.