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More on the Movies

by Elaine Schwartz    •    Apr 13, 2010

Following up on yesterday’s post, I discovered how important product placement can be. Sometimes movie makers decide the products beforehand, before they even complete the script and select the stars. Fees for a “starring” product can total millions.

Up in the Air? Including Hilton HHonors Diamond V.I.P. meant free rooms. But meanwhile, Hilton oversaw accuracy for their uniforms, service, details. For its participation, American Airlines helped to market the film.

The 28th Amendment?  Movie makers were contemplating where to insert a fast food scene before the scene was written. (Film has not been completed.)

Wearing economic glasses as you watch your next movie or TV show, you might get some extra insight if you watch for product placement.

The Economic Lesson

If profit equals total revenue minus total cost, then product placement certainly helps the bottom line. Also though, we should not forget the opportunity cost of these profit generating decisions. Is artistic quality influenced?

 

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