Luxury makes moves “behind the scenes” at the movies – why luxury wants to finance full length features

History and current climate

With advertising strategies that often involve a cinematic story arc, luxury brands are no stranger to large scale, striking audio-visual productions that enable to them to capture the imagination and hearts of their loyal and prospective customers. 

However, in today’s climate of instant, bite-sized viral content that propels brands to the forefront of consumers’ minds (and purchasing power), luxury brands must navigate how they retain their prestige, while creating an enduring emotional connection with their customer base. 

In addition to luxury brands aligning with sporting events and hospitality experiences, there has been a growing trend in recent years in luxury brands financing full length feature films. While historically luxury brands have been involved with the film industry through collaborations around a feature’s theatrical release, or through product placement, the move towards direct investment (and involvement – for example in the case of Saint Laurent Productions) takes this to the next level where a luxury brand supports other creatives and their art form, building a relationship that outlives the feature’s initial release and press, and beyond the brand being a short-lived seasonal sponsor.

Benefits and pitfalls

There are invaluable benefits to both luxury brands and the media and entertainment industry. However, the luxury sector’s support of a cash-strapped (and fragmented) film industry that is still feeling the effects of the pandemic and strikes in recent years, can present legal and commercial complexities, namely: 

• What is the “return” on the investment? While revenue from the exploitation of the feature may not be the primary objective for a luxury brand, a brand will want to ensure they see a tangible return on their investment. For example, this could be modernising the brand’s image, aligning itself with a particular production company, developing in-house production experience, leveraging advertising opportunities (for example, dressing key talent on screen and at premieres), or associating the film’s narrative or “feel” with the brand’s identity.
• Who “holds” the IP Rights? Although typically a luxury brand will not own exploitation rights in the feature (as these will sit with the studio and/or distributor(s)), where a feature focuses on the brand itself, its history or its founding story, the brand may have more leverage and opportunity to control certain exploitation rights (for example, via specific channels or territories). In any event, a luxury brand may wish to secure contractual rights to use footage (ideally of its own choosing) from the feature for a wide range of uses, such as a backdrop to its runways (in the case of fashion), or as part of printed advertorials to tie in with the feature’s release, in a number of - if not all - territories around the world.
• Who retains creative (and editorial) control? Creative and editorial direction will usually sit with directors, producers and, increasingly, with above-the-line talent on a film, so it is unlikely (although not impossible under the terms of the financing) that a luxury brand will hold a certain degree of creative and/or editorial control. However, a luxury brand will want to seek robust contractual protections where the film is visibly (and inextricably) tied to the brand from the audience’s perspective. For example, a luxury brand may require that:
  • when it comes to the story and key scenes (including set dressing and costumes), branded products must be displayed and/or used by characters in a manner that is in keeping with brand guidelines designed to preserve the prestige of the brand; 
  • it holds consultation rights around material changes to the film (for example, a change of director, writer or key talent which could alter the “look” and “feel” of the production), especially where such changes would affect brand alignment (and the terms of the financing); and
  • whether the brand would like to “pull the plug” swiftly (with or without publicity), in the event any aspect of the feature (including its talent) was embroiled in any scandal or if it looked like the film or brand could be brought into disrepute due to its association with the feature. 

Of course, there is a careful balance here as producers will want to avoid excessive interference which risks alienating their teams and diminishing the authenticity of their art. Contracts (and their negotiations) should therefore bear in mind the “bigger picture” and collaborative artistic spirit in which the financial deal is being struck – often in cases where each party “needs” the other in some form - while securing sufficient brand protection measures for the luxury brand and artistic autonomy for the producers and their creative teams.

• How does a luxury brand protect its brand assets and their usage? While creating opportunities for brand exposure, third party brand asset usage inevitably increases reputational risk. Therefore a luxury brand will typically, and understandably, want to retain tight control of how and where its branding is used in the production. As a minimum, it may consider: (i) how the brand’s IP (including its trade marks and designs) may be used within the production (and its associated assets) and by whom; (ii) how this will be monitored; and (iii) whether the brand’s involvement will be explicit or understated. In contrast to brand association with television productions (which tends to be more tightly regulated on a national basis), the regulation around the film industry (especially in the US) sees greater freedom around product placement and brand visibility within feature length productions. 
• Is the luxury brand risking too much alignment with the deemed “success” or “failure” of a feature? With a prestigious reputation to protect and therefore, in some cases, with more to lose than smaller scale production houses, a (perceived) initial high-profile “flop” or a controversial film can reflect poorly on a luxury brand, particularly where the connection is already well-publicised. A luxury brand may therefore decide to keep its involvement “behind the scenes”, or choose to align with post-release publicity or fashion-driven coverage instead. This way it can monitor the reception of the feature before it is publicly associated with it. As with any brand advertising initiative, a careful and advisably cautious reputational risk analysis should be part of the due diligence process ahead of the financing. This diligence process should also include a chain of title review of the feature’s underlying IP rights so that the luxury brand – as with any other financier – is comfortable that its investment in the development of existing IP (where applicable), and creation of the new production, is secure. 

Final thoughts

Luxury brands’ financing of feature films may continue to reshape both the luxury and media and entertainment sectors and the (now increasingly blurred) relationship between them. For luxury houses, it presents a compelling opportunity to align their brand’s ethos with meaningful narratives and art. For film producers, it opens up new (and well needed) doors to production finance, with the potential for increased “upfront” financing edging a production ever closer to being greenlit. Although not without its challenges in balancing brand protection and artistic integrity, luxury brands may continue to support, and become a larger part of, the film industry. 

You can read more about the latest trends in luxury tie-ins here.