Product Placement strategies

New agreement between US and China: better product placement exposure

New agreement between US and China: better product placement exposure

After the visit of Xi Jinping (vice president of the People’s Republic of China) to the United States, a new agreement has been established concerning product placement.  With this groundbreaking deal, the United States will be relaxing controls on China’s movie market.

According to Vice President Joe Biden, the new deal will grant US studios and independent filmmakers easier access to the ever-growing Chinese audience.

He states that “This agreement with China will make it easier than ever before for U.S. studios and independent filmmakers to reach the fast-growing Chinese audience, supporting thousands of American jobs in and around the film industry.”

The agreement includes a deal with Dreamworks Animation studio for a filmmaking joint venture in Shanghai. It is good news for one of the few industries where America still excels at, while easing access to China’s billion strong audience for the product placement industry. The deal opens China to an additional 14 U.S. produced films on top of the 20 non-Chinese movies for the market. The stipulations of this agreement include: all films must be produced in 3D or IMAX formats and an increased stake for the US government through distribution. The formats required calls into question how much the new agreement will help “independent filmmakers”. China now has just over 2,500 screens capable of handling 3D films and will soon have around 50 IMAX-capable screens.

A good example is the last summer’s blockbuster “Transformers: Dark of the Moon” (2012 Brandcameo Product Placement Award Winner). The latest installment in the Transformers movie franchise premiered in Shanghai and was one of a limited number of 2012 US films to be screen in China, where it became a huge hit. China was Transformers 3’s most profitable market after the US, and its opening weekend set the all-time China record of a $46.8 million box office.

China also had an important role in the product placement of Transformers 3. Many of China’s homegrown brands scored major roles in this film: Lenovo, Meters/Bonwe, TCL and Yili Milk.

Introducing Chinese brands in US blockbusters has been tested a few years before with Transformers 2. This partnership enhanced both brand building and profitability and has opened the door to Chinese brands in Hollywood films. It benefits to Chinese brands but also to other brands, which can also gain popularity on the Chinese market (e.g. Chevrolet Camaro).

While the U.S./China trade deal creates an opening for 20 more US films, it also represents a secondary opportunity for 20 more multiples of product placement for brands looking to piggyback on blockbusters to reach a huge, hungry consumer group.

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