From Reuters...

Media hype replaces advertising for "Star Wars" film

By Candace Talmadge

DALLAS -George Lucas may be the master of high-tech filmmaking, but his approach to advertising the much-ballyhooed May 19 debut of ""Star Wars: Episode I -- The Phantom Menace,'' is decidedly low-key.

That's not to say it hasn't been effective.

With all the media hype over the movie, Lucas' LucasFilm Ltd., the film's producer, and 20th Century Fox, its distributor, have been able to get free advertising instead of spending the $20 million or more that movie producers typically spend for a blockbuster movie.

""It's pretty smart,'' said Harold Vogel, a veteran entertainment industry analyst based in New York. ""In this case, you don't spend something to whip it into a frenzy when it's already in a frenzy. It's a huge picture.''

According to Competitive Media Reporting, a New York firm that tracks advertising spending, LucasFilm, based in San Rafael, Calif., and Los Angeles-based Fox ran all of five television commercials for the film between January and April.

""That's almost nonexistent,'' said a CMR researcher. ""It looks like they're not spending any money on this at all.''

Officials of LucasFilm and 20th Century Fox were unavailable to comment.

According to Advertising Age, the ad industry bible, the studio started airing five commercials last week. But the main marketing strategy for the long-awaited movie is based on a combination of crafty public relations, lucrative licensing agreements, cinema trailers and Internet-based, ""Star Wars'' fan-generated gossip.

Over recent weeks, ""Star Wars'' producer and originator Lucas has been interviewed by Time magazine, featured in Vanity Fair and Wired magazine, and appeared on the Rosie O'Donnell television talk show.

These are all examples of carefully selected, very targeted public relations, according to Marty Brochstein, executive editor of The Licensing Letter, a New York newsletter that is tracking LucasFilm's numerous ""Star Wars'' licensing agreements.

""Every newspaper and magazine has done a story on the lines of fans waiting at stores,'' Vogel said. ""If you can get one minute of air time on every television station in the country for free, why pay?''

In addition, ""Star Wars'' licensees have leaked information to stir interest. PepsiCo Inc., for example, last winter gave Wall Street analysts a sneak preview of the graphics for its specially designed ""Star Wars'' collectible soft drink cans. In 1996, Purchase, N.Y.-based PepsiCo signed a $2 billion promotional deal with LucasFilm.

A year later, when PepsiCo spun off its fast-food operations, the resulting company, Global Tricon Restaurants, Louisville, Ky., retained promotion rights in the deal. It will sell ""Phantom Menace'' merchandise through its KFC, Pizza Hut and Taco Bell stores.

Toymaker Hasbro Inc. has the primary ""Phantom Menace'' toy licensing agreement from LucasFilm, though other companies have also been granted rights to other items, such as video games and books. Analysts have estimated that ""Phantom Menace'' related merchandise sales could reach anywhere between $500 million and $1 billion this year.

Discount retailer Wal-Mart Stores Inc. of Bentonville, Ark., alone is reported to have purchased ""Phantom Menace'' items worth $500 million at retail.

""To be honest with you, Lucas probably doesn't have to spend all that much on paid advertising,'' Brochstein said.

According to Advertising Age, Fox normally spends between $20 million and $30 million to advertise a new movie.

Instead, LucasFilm is putting the brakes on all promotional activities for the blockbuster film. It did not allow retail sales of ""Phantom Menace'' merchandise until May 3 and has prohibited any advertising for the wares until two days after the film opens at the box office, Brochstein said.

""This is very shrewdly done,'' said Vogel, the entertainment industry analyst. ""They're keeping it scarce, yet managing to publicize it.''

""They're concerned there's going to be a backlash,'' added Brochstein. ""People will become so sick of it, they won't go to see the film.''

According to Daily Variety, under terms of the distribution deal Fox cut with LucasFilm, theaters will be allowed to play only eight minutes of trailers before the start of the movie. Moreover, LucasFilm has banned advance ticket sales for the first two weeks of the run, fearing scalpers will try to hoard them.

""Star Wars'' fans, however, have no concerns about possible negative effects of hyping the movie. In a recent CNN interview, Stuart Halperin, co-founder of the Hollywood.com Web site, said the Yahoo! search engine alone listed more than 1,200 Star Wars related sites, although only 18 were specific to ""Phantom Menace.''