Perfectly Placed

Hollywood is a big business. In 2019, US films brought in US$11.4b. That’s roughly equivalent to Uber, Square and Charles Schwab’s recent annual revenue. Ticket sales and subscription rights aren’t the only way production houses put up these mega-figures. Product placement is a subtle but lucrative way of easily making money.

You’ve probably noticed product placement on the screen before. The way every soda can is perfectly facing the camera, without any fingers interfering with the logo. Or the habit of referring to products by their brand names, like Sprite instead of lemonade.

With that, how lucrative are the 15 seconds of fame? Very.

2013’s Superman rendition, Man of Steel generated US$160m in promotional partnerships. For reference, it did US$668m at the box office. Man of Steel had a record-breaking 100 partners for the film. From Budweiser, to Nokia to 7-Eleven, if you spot a known brand it’s probably a deliberate placement and comes with a 7-figure price tag. Every second and pixel of screen space can be monetised.

These fictional characters are very real global celebrities. James Bond Skyfall generated US$45m from Heineken for a product partnership. The deal included a handful of ads and rights to use the Bond character in ads on top of brief in-film flashes. Daniel Craig himself admitted that without product placement, the film was unlikely to have been financially feasible. In fact, even Bond’s pistol was a sponsored inclusion by German manufacturer Walther.

The most obvious is the Lego Movie. While Lego made over US$400m alone from box office sales, following the release of the film, Lego has a record year of sales (US$4.4b).

It’s an arguably necessary shift, even if the art of cinema is being sold out as a rolling 2-hour long billboard. Since the 2002 peak, annual cinema ticket sales have dropped by 22% to 2019, before the lockdown. Producing for streaming services just isn’t as prosperous.