This article was first published in Entertainment Law Review, 1 Sept 12.
Ever since the demise of traditional advertising and the migration of marketing budgets into the online arena, brands have sought innovative alternative means to communicate with the market. Slowly but surely, more brands are exploring the possibility of getting involved with films. Orange has ventured beyond its parody skits and BAFTA sponsorship: for several years it has been financing films through a subsidiary, including this year's Oscar-winning "The Artist".
What's happened so far?
Times have moved on from the days of old-fashioned product placement – which is not to say it has gone the way of the Dodo. Far from it. Big product placement deals hit the trade press in Hollywood all the time: the latest of these being the leading Chinese computer technology giant, Lenovo, wanting to accelerate its entry into the US market. They concluded that one method was to have a product placement deal with the third instalment of the multi-billion dollar "Transformers" franchise at Paramount Pictures. They appear to be happy with the results, although it has not been reported what they paid.
There is a second leg to product placement, which in some respects is less subtle, but it has its admirers and that is ad placement (old adverts positioned purposefully in shot), often in beautiful Art Deco fonts, lovingly displayed in broad daylight. Think "Mad Men" or "Boardwalk Empire".
Beware Ofcom's Broadcasting Code . The code governs the do's and don'ts of product placement for the UK's commercial broadcasters. With the correct audience notifications the Code permits certain product placement, but the rules are designed to restrict the placement of a number of product categories including tobacco, alcohol, weapons, and gambling. One might ask why broadcaster rules affect the making of a film. They are pertinent because a number of broadcasters, such as the BBC and Channel 4, are often cornerstone film financiers in the UK.
Branded content was the buzz word a few years ago. It is a more nebulous concept, but fundamentally it involves a brand financing the creation of content that bears their hallmarks. Think of the revamped "The Fast Show" on the Fosters Funny website. It is used to drive online traffic to the brand's website or their social network pages. It serves to fill the void that arose when ad breaks on the commercial television networks were undermined by the advent of catch up technology, permitting viewers to skip the ads. It has been used with varying degrees of success. What seems clear is that the companies who have done it successfully are convinced of its power to raise brand awareness and access a specific demographic. Branded content plays well for those brands wanting to stock up on their "brand equity".
Then there are endorsements by film stars or their engagement as models for campaigns and catwalk shows, with paid appearances and agreements to wear branded merchandise. All exciting in their own way, but nothing new there.
Beyond these is an array of more sophisticated and complex marriages between brands, films and their stars.
A rare favourite has been co-branded advertising: an approach that is most workable when it is tied to a film studio that is creating and distributing the content, so the brand can co-ordinate their long lead marketing or a product launch with the marketing and release of the film. We have all seen it, usually on the side of a bus with 007's glistening white teeth outshone only by the glint of the Omega Seamaster's steel strap. The deals usually involve a (sizeable) lump sum paid to the rights owners, which will include the star's endorsement deal and commits the company to a minimum media buy in a stipulated time frame. The brand, film studio and the star will have various artwork approvals which are imperative if the brand is to establish this as a platform for real visibility and to mould the brand association so that it fits the brand's visual needs and pushes the film at the same time. The end result needs to work seamlessly for both brand and film – let's not forget a studio franchise is a major brand in its own right. Done properly, the results can be iconic.
On the evolutionary time line, the new kid on the block is brand-led film-financing. This got off to what can only be described as a rocky start, especially given that it has been hailed by the film press as a source of future film-financing. What sets this apart from most of the other models described in this article is that brands need to make the witting decision to invest their marketing dollars into independent films (meaning those produced outside the US studio system). The studios have evolved into well-oiled marketing and distribution giants, with the ability to book their films into cinema chains, ensure their films are acquired for broadcast by major television networks and cable channels, with the best reach and commercial terms achieved by their home entertainment divisions.
So why don't brands get in there quick? It's simple, anyone who's done a deal with a US studio can tell you that their opening position is that the deal has to be on terms that work for the studio – which is exactly the same as their closing position. How might that translate for a brand wanting an entrance into film? The answer: how awe-inspiring is your budget? So writing a big cheque must mean decent control, great dialogue and credits and logos aplenty on the film and its advertising? No. Think again. Which is precisely why the smart brands have decided that quality independent film is the way forward. The brands may be equipped to provide greater audience reach using their own means and there's a greater parity between the brand and independent film-makers, permitting the brand to eke out a meaningful deal.
So where does a brand start? Step one – don't dabble. Independent film-finance requires commitment and perseverance. A brand will need to commit time and resource to structuring its deals and selecting the right films. Step two – put the right team into place. Deploy advisers who are attuned to the needs of a major brand and understand the complexities of independent film finance.
What does the brand have to consider?
Timing. There is a perpetual tension between the time it takes from a commitment to finance a film to the time it's ready for release to the general public. The brand will need to align its expectations.
Who or what is the star of the film? One way of minimising the reliance on the involvement of a particular actor is to select a film which contains a theme which has a natural affinity with the brand. This provides the desired "brand equity". It also alleviates unnecessary pressures on contracting a particular actor, which in turn creates financial and scheduling pressures on the film. That's not to say the stars are not important. They are. The brand will need licences to use the film's poster (usually a hybrid of copyright and trade marks), which may include a likeness or picture of the star. Tactical deployment of the film's key artwork or so-called "one sheet" may be relevant to the marketing campaign rolled out by the brand in due course.
The ownership and IP rights acquired by the brand will be relevant. This issue is more complex than merely attempting to obtain a basket of intellectual property rights in the film: it will determine what controls and approvals the brand will possess as against the film-makers, distributors and broadcasters in each country. The brand must decide what content it will need to feed its own international marketing strategy. This will often require relationships with third parties ensuring that the brand maintains its rights to be the sponsor of any premieres or event-led launches and include film clips on the brand's online channels and social network sites.
Last but not least, it remains imperative to ensure that there are sufficient brand protections in place. Entrusting your brand – that has taken years to build – into the hands of independent film-makers who have little or no experience of the parameters of working with a major brand may not be wise, unless you are able carefully to control its use.
Brand-led film-financing will have a bright future if it's properly nurtured. In order to create value it will require hands-on selection, attention to detail and entrepreneurial marketing tied together with solid deal-making – as ever, with a sprinkling of stardust.
Kami Naghdi is a media & entertainment partner at pre-eminent law firm, Field Fisher Waterhouse LLP. He has previously produced eight world class feature films. He represents leading producers and film financiers including major brands.
1st July 2012 © Field Fisher Waterhouse LLP. All rights reserved.
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