Coming This Summer: Harry Potter vs. Star Wars

Orlando Sentinal: After a year in which Universal Orlando rode the popularity of Harry Potter to record heights, Walt Disney World is pinning its fortunes this summer on the one intellectual property with which the boy wizard is most often compared: Star Wars.
Disney next month will reopen Star Tours, the Reagan-era simulator ride that is undergoing its first major upgrade since it debuted in Disney's Hollywood Studios in 1989 — six years after the third film in the original Star Wars trilogy had arrived in movie theaters.

The revamped attraction — which Disney is also rebuilding at Disneyland in Anaheim, Calif. — will feature state-of-the-art 3D technology, new film scenes shot by Star Wars creator George Lucas' movie studio, and more than 50 different ride variations. It is the sole big-ticket addition at Disney World in 2011.

But Disney is banking on Star Tours to do more than deliver crowds this summer. It also hopes the ride will stoke renewed interest in a long line of Star Wars merchandise — from Goofy-as-Darth-Vader figurines to build-it-yourself light sabers — much the way that the Wizarding World of Harry Potter has fueled record souvenir sales at Universal. Disney says it will have more than 400 Star Wars-themed items for sale in its parks following the reopening of Star Tours — nearly twice as many as it had three years ago.

If Disney can replicate even a fraction of the merchandise success that Universal has had with Harry Potter, executives will be thrilled. Disney licenses the rights to Star Wars from Lucasfilm, while Universal licenses Potter from Warner Bros. and author J.K. Rowling.

There is a downside for the theme parks: While Star Wars and Harry Potter souvenirs are very popular, they're not necessarily as profitable as other park merchandise because of the hefty royalties Disney and Universal must pay for rights to the properties. That's a particular drawback for Disney, which has a vast library of popular, internal content — from Mickey Mouse to Buzz Lightyear — and which licenses comparatively less content overall than Universal does for its theme parks.

Although both companies closely guard the financial terms of their licensing deals, regulatory filings show that Universal's minimum annual payments for intellectual-property licenses has more than doubled, from $4.6 million to $10.8 million, since 2007, the year it struck its deal for Harry Potter. And those payments do not include volume-based fees.

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