YouTube Stars Are Upending Hollywood's Gifting Economy

Illustration by: Jason Raish

Social media "influencers" have discovered hospitality suites, but are they worth an $150,000 payment?

Nathalie Dubois was setting up a celebrity gifting suite at the Carlton Hotel just before this year's Cannes Film Festival when she got a phone call. After 20 years of handing out free tins of caviar and luxury vacations to Soori Bali, the owner of DPA, a hospitality company specializing in connecting stars with brands, was used to fielding calls from publicists with odd requests. But this one took the cake.

"A guy who was handling a [publicity team] for social media influencers said he wanted to bring four of them," she says. "But he wanted me to pay them $3,000 each to come to the suite. I told him, 'No, I don't pay.'"

Celebrity gifting used to be a sacred ritual at scores of events and places where Hollywood stars flock en masse. The economic model for the practice makes perfect Keynesian logic: High-end companies get their products into the hands of famous and aspirational personalities, hope the stars get photographed wearing or using them and enjoy a priceless windfall of publicity if they do — all for the small cost of a suite full of freebies. At their height in the late 1990s, gifting suites rivaled the Governors Ball in terms of star-drawing power. But they took a hit during the 2008 recession. "It didn't feel appropriate when we were having homes foreclosed," says Karen Wood, a branding expert who started gifting in the mid-1990s. But in recent years, gifting suites have been making a comeback.

Except digital "influencers" are ruining everything. Like Dubois, Wood — whose company, Backstage Creations, runs "hospitality suites" at the Emmys, Critics' Choice Awards and the MTV Movie Awards — also has been approached by flacks repping online stars. She won't name names (especially since she doesn't recognize any of them), but they all want money to perform the arduous task of showing up at her suites and taking thousands of dollars of free stuff. Wood says she has been asked to pay anywhere from $10,000 to $50,000 and once even a staggering $150,000.

In fairness, influencers are only doing what they're accustomed to. In the digital world, YouTube and Instagram stars are given huge sums to plant products in their videos and photos. Why shouldn't they get paid to do the same for the companies that publicize their wares through gifting suites — after all, influencers are followed by tens of millions of potential consumers on social media, giving them a much bigger publicity bang than old-fashioned stars.

Not surprisingly, though, they've had a hard time convincing old-school Hollywood. "This year was the first time I saw the influencers were big in Cannes," says Dubois, who welcomed Susan Sarandon, Viola Davis and Dennis Quaid into her Emmy weekend suite. "But we have to be very careful about it. You can't put an influencer next to an A-list star, because next time the stars won't come back. It doesn't look as serious."

This story first appeared in the Sept. 27 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.