The World of Hollywood Product Placement

Dexter Morgan (Michael C. Hall) using a MacBook Pro.

Product placement has been around since the age of silent films. Product placement took off in the movie E.T.: The Extra Terrestrial in 1982 when Eliot (Henry Thomas) lured E.T. into a trap using Reese Pieces. Since that time, product placement has become almost unnoticeable because the products look like they belong in the scene. There is not a movie or television series that does not use product placement.

Apple products are shown in 30% of the movies. Their products like the iPhone, iPad, iMac, MacBook Air, MacBook, and MacBook Pro have appeared in several movies including The Twilight Series, Mission Impossible 3: Ghost Protocol, Contraband, Safe House, and Chronicle.  In television, Dexter uses iPhones and MacBook. MacBooks are in Sex and the City, 24, Buffy the Vampire Slayer, and House of Cards.  In the trial of the century (Apple vs. Samsung), Apple executives claim that they do not pay for the product placement.  Instead, they provide free devices for product placement in television and film. What production company will turn down free products to place in their television series or films? Apple products appear 891 times in television shows in 2011.  It is very smart on Apple’s part. Apple spends one billion dollars each year on advertising, and that does not include the products they give away for free to television series and movies. Their competitors – Samsung and Microsoft – spent much more than Apple on advertising.

Product placement has become extremely important particularly because of devices like Dish Network’s The Hopper, which allows the viewer to skip commercials during live television. It is because of this feature that Fox, CBS, and NBC have filed a lawsuit against Dish Network. Since product placement is within the television series episode and movie, devices like The Hopper cannot skip over them, and forces the viewer to observe the product in action. Since the product looks like it belongs in the shot, no one minds this type of commercial.

Hollywood and the Benjamins

Hollywood Money

You may have a great idea for a television show, but unless you can “show me the money”, the idea will not come to life. Hollywood is “all about the Benjamins”. It takes a lot of Benjamins to produce anything in film. The amount of Benjamins depends on a variety of factors including the type of genre, amount of time, and the type of network. For instance, HBO’s drama The Wire cost approximately $1.5 million per episode. While MTV’s reality show Jersey Shore cost appropriately $10,000 per episode. However, E! Online reports a thirty-minute reality show cost between $100,000 and $500,000. It is still cheaper than drama series like The Wire.  From the examples, you can understand why reality shows on television have skyrocketed in the last ten years.

Why are reality shows cheaper? One answer is the cost of talent. The talent is paid, but they are not well-known actors. A well-known actor like Charlie Sheen was earning $840,000 per episode when he was on Two and a Half Men, and worth $120 million. Kim Kardashian’s net worth is $40 million. She makes approximately $80 thousand per episode, but was not paid that amount when Keeping Up With the Kardashians first aired in 2007.

Reality shows require fewer writers. Yes, reality shows have writers. They use mostly nonunion and freelance writers and crew members resulting in not having to pay certain salary amounts as listed in various unions like the Writers Guild. The show does not have to worry about employee strikes.

Reality shows generate a lot of advertising revenue because of product placement. The contestants on the show Survivor are awarded with Snicker bars and Dortios nacho chips.

Reality shows generate more money in DVD and Bluray sales than other television shows. Shows like The Amazing Race outsold and outranked dramas like Desperate Housewives.

Since their expenses are significantly smaller than a drama series, their payoff is high revenue. In other words, less Benjamins going out, and more Benjamins coming in. Since it is all about the Benjamins, reality shows are here to stay and will continue to soar in Hollywood.