TV and Movie Production In the latest action spectacle playing in a local movie theater, a square-jawed hero is more likely to pull out a latest shiny laptop or smartphone from Apple or Samsung and display it prominently for the audience to see, than he is to pull out an Uzi. This less than subtle sleight-of-hand is known in the film and television industry as product placement, and it has become a significant source of funding for many productions.

Though consumers may roll their eyes at  some of the obvious ways in which movie and television productions advertise goods, it has become an accepted practice, no different than the five or six commercials breaks sprinkled throughout a one-hour TV show.

Movie audiences are finding it common these days to sit through ten to fifteen minutes of branded advertisement preceding a film, and that doesn’t even include the ten to fifteen minutes of trailers for upcoming motion pictures.

Like it or not, we have entered the “Branded Age,” where everything is for sale and nothing is sacred. In order to gain an in-depth knowledge of the ins and outs of product placement, a firm understanding is required of all the elements that go into marketing the latest gadget on the big screen.

Principals

In general, the principals involved in a product placement agreement will be a movie studio, television network, commercial or music video filming a production, and a company that wants to place its products within the narrative.

Motives

There are many reasons why a company would be interested in product placement.  First, any company in the business of profit-making wants to market their goods to a bigger consumer audience. Films, television shows and music videos may provide brand awareness to consumers that a company may find difficult to target solely through commercials and print advertising. Second, a company can also target a specific audience through product placement. For example, let’s say Samsung realizes that their market share in urban areas is lacking.

They can approach a movie production or TV show with a sizable urban audience to showcase their products. This assures Samsung that their products will be displayed directly to a consumer group in which they lack maximum awareness. The final motive, of course, is financial. Companies who don’t enter into a “donation” agreement, but rather sign a contract based on compensation, stand to make money from movie studios and TV productions interested in showing their products. This applies only to agreements in which a production approached the company and asked for product placement, not in instances in which the company made the initial offer.

The motives for a movie, TV show or music video production are twofold: Branded companies provide a source of additional funding, and also provide a “hip” factor that can appeal to specific sectors of the audience. Making movies and TV series costs money, and productions are always on the hunt for ways to offset or increase their budgets. Having a “cool” product, like the very latest iPhone, confers a certain vibe and helps market the production to a segment of the audience. For example, the Fast and the Furious film franchise is known to use the most souped-up sports cars on the market, with a firm eye to pleasing the young Turks who are the franchise’s loyal audience.

Manner of Display

Next, it’s vital that both principals agree in clear terms as to what constitutes ‘placement’ of the product or products to be shown in the production. For example, some TV shows will have characters in a work setting who all use a particular laptop, such as iMacs, or only own smartphones with the Verizon brand name. The way in which the products are displayed should also include context, which can affect how a product is viewed.

In other words, Apple may frown upon one of its iPhones being used as a detonation device in a film that depicts a terrorist trying to blow something up. But problems may also arise if the product is not shown in a way that is clear and prominent, per the standards of the company. For example, if a movie has agreed to exclusively use Blackberry phones, it will not be advantageous to the company if the characters in the film display the phone in shadows or at night, where the product is less likely to be seen by the audience.

Unless this type of placement was agreed to in the contract, productions and companies must delineate the exact way a product will be shown in order to avoid conflict and dissatisfaction. A final consideration is whether or not the product will be shown in a way that’s aesthetically pleasing to the consumer. No company wants to see its product displayed as dirty, broken-down, or otherwise deficient. The goal of every company is to make profit, and that only occurs if people want to buy their product. Any adverse use of a company’s product is detrimental to its bottom line.

Getting Paid

Another important element of product placement is determining the form of payment. In some cases, a company will “donate” the product in lieu of an actual cash payout. Popular companies such as Apple, Blackberry and Samsung are branded with that “have to own” factor which allows them to forego money because their products are in high demand. However, less prominent companies may have to offer substantial cash payments to entice film and TV producers to agree to a product placement. Many production companies also negotiate marketing campaigns tied to the product being displayed in the film or TV show.

The  blockbuster science fiction film, ET, is an example of this type of marketing tie-in with product placement. In the film, ET, an alien from another planet, becomes enamored with Reese’s Pieces, a peanut butter version of M&M candies. Aware that the film had mega-hit potential, the film’s producers and the makers of Reese’s Pieces created a series of commercials featuring ET that demonstrated the alien’s love of the candies. This set audiences up for the product placement within the film when it was released, and helped raise the profile of both the candy and the movie.

Legalities

Nearly all products on the market today are protected by various intellectual property rights. Film and television producers must adhere to these rights when negotiating a product placement agreement. Most intellectual property rights cover the licensing and copyright associated with the product. In other words, a film or TV show would not be able to assert that a product is of their own creation, even within the context of the “pretend” world of the TV show or film in which the product appears. For example, an actor could not claim he invented the iPhone unless, in fact, Apple agreed to allow that claim to be used.

Because product placement is not confined to just electronics or soft drinks, there may be other considerations. Let’s say a feature film studio wants to use BMWs or Ferraris in its production. The studio must ensure that all insurance and liability coverages are in place in the event that the vehicles are damaged, destroyed, or otherwise harmed. This would apply even in productions in which the vehicles will be intentionally crashed, a high occurrence in many of today’s action movies. In cases where firearms are used as product placement, it’s imperative that safety measures restrict use of the weapons to those with proper training, include provisions for their care and maintenance. The care and maintenance provision also applies to vehicles, aircraft, and jewelry.

Finally, there is also the issue of what happens if the product does not get shown in the feature film, TV show or music video as agreed. During the editing process, a director may realize that the product no longer fits the overall tone or intent of the production, and thus edits out all images and scenes in which the product appears. Two solutions are available in the event this happens. First, the production can refund all payments to the company and explain why the product was not placed. Second, the production can offer to transfer the product placement agreement to another film, TV show or music video.

For a current television series, this is an easy offer to make, as there are many episodes available for product placement. A feature film would have a harder time making this offer, as the parameters, audience and tone of each film are very different. Unless the product placement contract contains language specific to this situation, filmmakers and consumer companies may find themselves in a court of law to resolve the dispute.

Restrictions

It’s also important for producers to be aware of the restrictions established by the FTC and the FCC, which govern the use of all products for which money has been paid by production companies to display them in films or TV shows. In addition, all television shows on normal (not cable) channels must comply with the Standards and Practices division of their network, which restricts how and when certain products, such as cigarettes, can be shown.

Another constraint that may complicate matters in a TV show with product placement is an existing agreement with an advertiser who is in direct competition with the company contracted for product placement. For example, Apple makes a deal with NBC to showcase its newest iPad on one of NBC’s television series. However, IBM has paid for commercials to air during that same hour. Understandably, IBM will be upset that NBC has contracted with a direct competitor for product placement during the same hour in which IBM’s products are advertised.

There is also the matter of how much control a production should give a company in a product placement agreement. If the FTC believes that a company has directed a filmmaker to display its products in such a way as to constitute an advertisement, then it may impose regulations on that agreement to scale back the product placement.

Use of Likeness

Movies, TV shows and music videos are all driven by actors, singers and performers. When a company secures a product placement deal and sees a big-name celebrity using its product, it will naturally want to advertise that use in other media. But if the company doesn’t clear this advertisement with the celebrity first, problems may arise. Celebrities spend years building a brand, and they want to be compensated for the use of their likeness. Any company that enters into a product placement agreement will likely have to negotiate with representatives of the performers who used their product if they want to display stills, photos, videos or captions of that celebrity beyond the specific production in the contract.

Final Consideration

Entering into a product placement agreement is much easier for a top-rated TV show or big studio film than it is for independent productions. Companies like Apple or Samsung want to display their products in front of the largest audience possible, which precludes smaller, down-market productions. However, independent films and small TV shows can still reach out to large companies and offer to showcase their products for free, or enter into an agreement that rewards the production based on the production’s audience or viewer figures. Product placement agencies are the best way to secure such agreements, as they are practiced in matching film and TV companies with the right product. And of course, it goes without saying, but no agreement should ever be made without the consultation of a media attorney.