American Apparel suit means cheap ads
American Apparel has agreed to pay Woody Allen $5 million to settle a lawsuit. The filmmaker sued the retailer for suing his image without permission. Sally Herships reports on whether this is hurting or helping the company's business.
A billboard ad depicting director Woody Allen in hasidic garb (courthousenews.com)
More on Crime - Law, Mergers/Acquisitions
TEXT OF STORY
Bill Radke: This morning, American Apparel agreed to pay filmmaker Woody Allen $5 million to settle his lawsuit. Allen sued the clothier for using his image without permission. He called the company's ad campaigns "sexually gross and infantile." They attacked his reputation. Reporter Sally Herships wanted to know -- Is all this hurting American Apparel's business or helping it?
Sally Herships: American Apparel CEO Dov Charney is used to causing a stir with his provocative billboards. In 2007, he used a picture of Woody Allen eating dinner in full Hasidic garb.
Randy Freedberg is an intellectual property and entertainment lawyer. He doesn't represent American Apparel, but he says the company used the first amendment as a defense.
Randy Freedburg: Because we're doing it as satire and to make a statement, and it's almost artistic, it's not commercial speech, and therefore it's OK and we don't owe you money.
The company took the billboards down, but Allen still sued. Freedberg says American Apparel went out of its way to start this fight.
Freeburg: Hundred percent, no question. This is marketing for American Apparel. Like this, right now, this conversation. They're getting a lot of publicity for not a lot of money.
Allen demanded $10 million. But American Apparel said thanks to a number of sex scandals, Allen's image isn't worth that much. That drew media attention to the clothing company's own risque record.
Jonah Berger is a marketing professor at Wharton. I asked him how this could be good for business.
Jonah Berger: The way that consumers react to advertising is very different then the way that consumers react to regular news.
Berger says most consumers see an ad and know someone's trying to sell them something, but when they read news, their defenses aren't up. So a negative piece can be effective, as long as the company is small. Big, well-known firms risk having their reputations tarnished. But small company's brand awareness can get a lift.
Berger says consumers won't remember the details of this lawsuit, but they will remember American Apparel.
Berger: Next time some of those people are walking by an American Apparel store whereas before they might never have thought about stopping in, now they might say, oh yeah, maybe I should go check them out.
American Apparel and Woody Allen may find some common ground in their dispute today. But lawyer Randy Freedberg says American Apparel doesn't want the case to end.
Freedberg: They've already milked it, they've milked it for a long time.
Herships: But they want to keep milking it.
Freedberg: They want to keep milking it as long as they can.
Freedberg says even if American Apparel ends up paying $10 million, it's still cheap advertising. So the company wins either way.
In New York, I'm Sally Herships for Marketplace.
Comments
Comment | Refresh
05/18/2009
This is dated and plain wrong. The case was settled today and The Guardian posted a statement from the CEO explaining what the ad was about.
http://www.guardian.co.uk/film/2009/may/18/american-apparel-woody-allen
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.