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 Representation

Ari Gold (Jeremy Piven), the Talent Agent in Entourage

Director Robert Rodriguez said, “If you do a film with a studio, agents step in, they start saying, ‘My actor has to get this amount of money’, and it becomes a deal.” These days one cannot get acting or writing job in Hollywood without knowing someone. You cannot walk up to a producer, director, or a network executive, hand them your screenplay and say, “I guarantee my script will become a blockbuster hit!”. If the person is nice, he or she may say, “O.k.”. When you walk away, your script goes into file thirteen (the trash can).  This is why writers and actors have agents representing them.

Many actors believe the myth that their agent gets the job for them. This is not true. The agent’s job is to get his or her client through the door for an audition by pitching his or her client to the casting office. It is up to the individual actor to win over the casting director to get the job. The actor accomplishes this by showing up for the audition, looking professional, and being charming to the casting director. Once the actor obtains the job, the agent is one who negotiates the contract’s terms with the producer on the actor’s behalf.

Many people confuse the agent's and the manager’s roles. Agents are licensed by individual states and usually have agreements with unions like the Screen Actors Guild (SAG). Managers are not licensed or required any special training or education. Agents obtain 10% of the actor’s work that is a direct result of the agent’s actions. In other words, the agent is only paid when the actor is paid. Managers obtain 10-15% on all the actor’s work regardless of the role the manager played in assisting the actor to obtain the work. Agents have many clients (50-250 actors). Managers have fewer clients (10-25 actors). Managers are not allowed to legally negotiate on behalf of the actor, but agents are. Agents are focused on obtaining employment and negotiating contracts. Managers are focused on the actor’s career including branding. 

Actors and writers must have good relationships with their agents and managers. Agents and managers have a lot of influence on the actor’s and writer’s careers. Anything worth having takes time and work.

The Art of Negotiation

The final agreement in a negotiation is the written contract.

Doctor Chester L. Karrass, chairman of Karrass, said, “In business, you don’t get what you deserve, you get what you negotiate.” Negotiating is one of the hardest parts of business. In the filming industry, an executive producer is constantly negotiating several matters including salaries, obtaining investments, and establishing filming locations. It can be daunting to walk into the room not knowing if the person you are negotiating with is a master negotiator, a rookie, or someone in between.

Positional bargaining is a negotiation strategy that is based on fixed positions and usually results in an agreement or no agreement. In other words, the end to positional bargaining is a win/lose result. Positional bargaining is usually present in salary negotiations. For instance, the recruiter pressures the candidate to name a salary or hourly rate. Ramit Sethi, personal financer and entrepreneur, states to never name the least amount you will accept because it may be below what number the recruiter had in mind. If it is below that number, they will be happy to offer you that particular number, and nothing above the number. Instead, place the pressure back on the recruiter by asking him or her questions about the salary range.

Before you enter into any negotiation, do your homework including obtaining objective criteria. You need to know what is the value of the position that you want, and what is the value you are worth. Knowing the salary for a particular position can assist you when the recruiter is pressuring you for a number. You can tell the recruiter a range and where you fall within that range based on your previous experience and any objective criteria that may be relevant. Objective criteria include researching the business that you are negotiating with. The more prepared you are the stronger your position and the better your negotiation will be.

Changing negotiation strategies from positional bargaining into a mutual agreement provides the best results for both parties because it is a win/win outcome. You need to frame your stipulations in terms that will benefit the other negotiator. If a recruiter states that he or she cannot offer a higher salary because the economy is bad, the candidate can tell the recruiter that the increase in salary is an investment in their business. Then the candidate will explain how it is an investment in the company.

Negotiating is an essential skill that every producer must have. Additional lessons I learned from each video was that you must be confident, prepare for your negotiations, be able to read people, and never disclose your bottom line. Like everything else in life, practice applying your negotiation skills. By practicing, it will make you a stronger and better negotiator.