How did Star Wars change the film business?

Star Wars, released in May 1977, is credited with reshaping Hollywood in several ways. It broke earnings records, turned merchandise into a major revenue stream, advanced special effects and sound, and encouraged studios to build big-budget franchises. Some historians add that many of its business strategies already existed, and that the film is better seen as a symbol of a shift than as its sole cause. [1] [2]

The film opened in 32 U.S. theaters on May 25, 1977. It took $6.8 million in its first weekend of wide release and later passed $300 million, which no film had done before, eventually reaching $798 million worldwide according to CNBC. It cost about $11 million to make. Twentieth Century Fox had never earned more than $37 million in a year, and its 1977 earnings more than doubled its previous best. A USC expert who worked at Fox at the time said the studio had not ranked the film as a priority until it opened. [2] [3]

The New Yorker reported in 1997 that before Star Wars, merchandise was used only to promote movies and had no value apart from them. Star Wars toys and other products became a business in their own right, and the magazine said this began modern merchandising. A 1987 New York Times piece put the trilogy's merchandise sales at $1.5 billion, alongside $1.2 billion in tickets. The USC commentary says it was the first film to benefit aggressively from what later became typical revenue streams, including a soundtrack that rose to number one. [4] [5] [3]

Time's account says that Lucas conceived the story as one part of a large mythology told over several episodes, which helped open the way for projects such as the Lord of the Rings trilogy and for sequels to nearly every megahit. Studios now aim for large action films that can become recognizable brands and be cloned for years. [6]

The Library of Congress says the film introduced visual effects and sound technology that changed how films were produced. CNBC notes that Industrial Light & Magic, which Lucas founded after Fox closed its effects department, took effects to previously unimagined extremes. The New York Times listed further effects: a changed view of science fiction, a redefined summer season, a revival of symphonic film scores, and a wave of films aimed at teenagers. The Library of Congress adds that its success persuaded studios to move from earning money through many films to putting ever more money into developing films like it. [1] [2] [5]

Agatino Balio, a film historian formerly at the University of Wisconsin, argues that the underlying strategies were not novel. United Artists had pioneered serial films with James Bond, and The Godfather and Jaws had already established the event film. He also notes that after adjusting for inflation, Gone With the Wind still ranks as the top-grossing film. Time similarly points to earlier series such as The Thin Man and Bond. Balio does accept that Star Wars broke new ground in effects. CNBC's conclusion is that the film became the symbol of an age of filmmaking rather than the herald of it. Time and the Library of Congress, by contrast, stress that its scale of mythology, merchandising and imitation was new. [2] [6] [1]