The Potential Financial Pitfalls of Remaking Old Movies

Aug 24, 2023 | Law Student Blog,

By Gabriella Cepeda, Saint Louis University School of Law, Juris Doctor Candidate, 2025

In recent years, Hollywood has witnessed a surge in the remake trend, targeting classic movies and beloved childhood favorites. This nostalgia-driven approach has proven successful in generating initial excitement among fans. However, the remakes of films incorporating iconic characters like Barbie and The Little Mermaid may carry significant risks that could lead to substantial financial losses or at least fewer gains for the relevant brands involved. This article delves deeper into the potential implications of these remakes through licensing agreements, resulting in a loss of revenue for the brands.

The Resurgence of Remakes
The movie industry has long relied on remakes and reboots to tap into the nostalgia of audiences. The success of films like Disney’s live-action adaptations of Cinderella, Beauty and the Beast, and Aladdin has demonstrated the immense profit potential in revisiting beloved classics. As a result, this trend has extended to iconic brands, which have established strong licensing partnerships over the years.

The Licensing Conundrum
One of the primary concerns associated with remaking old movies lies in the intricate web of licensing agreements surrounding these brands. Licensing agreements grant third-party companies the right to produce merchandise, spin-offs, and other promotional material based on the original movies, characters, or brands. These agreements are typically negotiated and renewed periodically, ensuring that the brand owners maintain control over their intellectual property and receive a fair share of the revenue generated.

However, when a remake of a classic movie is released, it often sparks renewed interest in the brand and its characters. This increased demand can lead to a surge in licensed merchandise and related products. Herein lies the problem: the original licensing agreements may not explicitly cover these remakes, potentially leading to the initial licensees producing and selling merchandise related to the remake without consulting the brand owners. 

Brand Dilution and Loss of Control
When licensees capitalize on remakes without consulting the brand owners, it can result in brand dilution and a loss of control over the brand’s image and revenue stream, and arguably a breach of contract by such licensees. The original brand owners may find themselves unable to regulate the quality, design, or appropriateness of the merchandise associated with the remake, as they may not clearly have had the ability to approve or disapprove.

Furthermore, the brand owners may miss out on a significant share of revenue from the increased merchandise sales. Without explicit provisions in the original licensing agreements, the original brand owners may struggle to negotiate a fair share of profits from the licensees benefiting from the remake. This loss of revenue could be detrimental to the financial stability and growth of the brand.

Legal Challenges and Ambiguities
Another significant challenge arises from the legal ambiguities surrounding the licensing agreements in the context of remakes. When the original licensing agreements were drafted, they may not have accounted for the possibility of remakes or explicitly outlined the rights and obligations of licensees in such situations. This oversight can lead to legal disputes, as licensees may argue that the remake falls within the scope of their original licensing agreement, while brand owners contend otherwise.

These legal battles can be time-consuming, expensive, and can further erode the revenue potential of the brand. The uncertainty surrounding these disputes can also deter potential investors or licensees from entering into new agreements with the brand, leading to missed opportunities for revenue generation.

Preserving Brand Value
Ultimately, the success of a brand depends on maintaining its value, both in terms of financial profitability and consumer perception. Remaking old movies can generate short-term excitement, but the subsequent loss of control and revenue potential can negatively impact the brand’s value in the long run.

To mitigate these risks, brand owners must be proactive and negotiate new licensing agreements when necessary and possible that explicitly address the potential implications of remakes. By including provisions for remakes and establishing clear guidelines for licensees, brand owners can safeguard their intellectual property and ensure a fair share of revenue from the remakes.

Conclusion
While the era of remaking old movies can reignite nostalgia and captivate audiences, the financial consequences for brand owners can be severe. The lack of clear provisions in licensing agreements, the potential loss of control over brand image and revenue, legal challenges, and brand dilution all pose significant risks to the profitability and longevity of iconic brands.

As the movie industry inevitably continues to explore the past for inspiration, it is essential for brand owners to be proactive and forward-thinking. By renegotiating licensing agreements and addressing the potential implications of remakes, brands can better navigate this new era and protect their financial interests while keeping the magic of their beloved characters alive for generations to come. By doing so, they can ensure the preservation of their brand value and secure their position in the hearts and minds of audiences worldwide.

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