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?
Heinz Ketchup had a cameo but Apple was a star. I saw The Girl With The Dragon Tattoo yesterday and started to think about product placement. In this excellent film, while Heinz ketchup played a fleeting role during a scrambled eggs breakfast, Apple laptops were a recurring presence throughout the film
How did Apple get this advertising? According to a 2006 Washington Post article, Apple does not pay for it. Still, though, they work very hard to get it and probably provided the computers.
Carrie Bradshaw used an Apple in Sex and the City, as did the “good guys” in 24, and Alec Baldwin in It’s Complicated. To see the films in which Apple appeared, you might want to look at brandcameo.
The Economic Lesson
As oligopolies, large firms with few competitors have many consumers with which to communicate. Films are one vehicle for contacting a large audience. Other characteristics of oligopolies include sticky prices, mass production, product differentiation (though not always as with steel), and the need to advertise.