Working in harmony with Hollywood [China Daily: Hong Kong Edition]
(China Daily: Hong Kong Edition Via Acquire Media NewsEdge) China's Pangu Investment Company has announced it has settled its dispute with Paramount Pictures ahead of the release of Transformers 4: Age of Extinction in China. Previously the Beijing-based developer filed a lawsuit against Paramount, accusing the movie company and its two Chinese partners of failing to include its landmark building in the movie as agreed. The case shows that it is still not easy for Chinese companies to have their products included in Hollywood blockbusters.
In 2009, Metersbonwe managed to place ads in Transformers 2, which was the first time a Chinese brand cooperated with a Hollywood blockbuster. Metersbonwe subsequently produced a Transformers T-shirt which sold over 1 million pieces, rapidly raising its revenues.
Most Chinese brands cooperate with Hollywood movies through intermediary agents. They will usually charge more than $1 million, this will cover both the product placement and the authorization fees for the brand to use the film's content and image to advertise and develop derivative products.
For made-in China products, which are associated with low price and low quality, cooperating with well-made Hollywood blockbusters can polish their image when they appear alongside the world's top brands.
The latest survey by the Beijing-based media-research firm EntGroup shows that over 34 percent of Chinese audiences supported Chinese brands' product placement in Hollywood movies, with only a little more than 6 percent objecting, the rest were neutral. And the majority of Chinese cinema-goers, 58 percent, think brand-building through product placement in Hollywood movies is a good marketing approach for Chinese brands looking to explore international markets and promote the brand's values overseas. That's why in recent years, many brands have tried to feature in Hollywood blockbusters, especially those films shot in Chinese locations, such as Transformers 4, which features product placements by 25 Chinese brands.
However, there are still many barriers to such product placements by Chinese brands.
First of all, there are certainly some differences between Western and Chinese advertising concepts and creation. Hollywood producers may try to present the products in a funny or an exaggerated way as this has been shown to increase their impact, while the Chinese companies want their products presented in a straightforward and positive manner. This can lead to proposals by Chinese brands that are inappropriate to a film's content. For example, Chinese dairy giant Yili requested the robots drink its milk products in the Transformers 3, a proposal which was naturally refused by the film's director. Facing such differences, it will be a long-term task for Chinese brands and US film producers to better communicate and cooperate with each other.
Second, differences also lie in their modes of operation. For Hollywood producers spin-off products are more important than product placements as they generate more revenue and they want the marketing plans for the film's deriviatives to be closely related to the film. So in their negotiations with Chinese brands, they will want details of follow-up promotional activities, the design of authorized products, their production and distribution, included in the contract. Those Chinese brand owners who lack experience in making long-term plans are usually unable to meet the requirements of Hollywood producers. Therefore, Chinese brands who hope to cooperate with Hollywood, may need to change their way of operating.
Finally, intermediaries are still necessary for Chinese brands to work with Hollywood. But at present, these intermediaries are not that professional and they simply act as brokers. They can hardly help Chinese brands learn from Hollywood's marketing experiences and build a related placement system in order to maximize the value of movie advertising. Some intermediaries have even cheated when facilitating the cooperation, such as in the case of Pangu, where an intermediary agreed some terms of the contract that were never approved by the film's producer, which caused mutual misunderstandings in the cooperation.
With the development of China's film market and the growing needs of Chinese brands to internationalize, more Chinese products will feature in Hollywood blockbusters in the near future. But, only with the full cooperation of Chinese brands, Hollywood filmmakers and their intermediary organizations can a healthy market order based on trust and respect be built up.
The author is the Research and Development director of the Beijing-based media-research firm EntGroup.
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