Monday: Production Conference part 1: "Brand Integration"

American Film Market 2011 conference: unofficial notes
Nov 7, 2011 9 AM: Production Conference notes part 1, "Brand Integration"
Notes by B. Hahne

The original blog location of these notes is: http://2011afm.blogspot.com
This is day 4 of a 5-day series, check back at the blog for more as the days go by.

Clarifications or pithy comments by the note-taker will generally appear in [square brackets like this].

These notes are copyright (c) 2011 by Bruce Hahne. Noncommercial, nonprofit redistribution and/or pointing people to the blog is permitted and encouraged.

Disclaimers: "Free notes, you get what you pay for!" There notes are a summary, not a transcript, and represent my best effort to capture the panel discussion plus Q&A. They also probably contain errors. I'm not in the film industry, nor am I affiliated with AFM / American Film Market or with any of the firms associated with the panelists.

-----------------

Moderator: Georg Szalai, NY Bureau chief and Business Editor, the Hollywood Reporter

Panel:

Eric Baum, SVP for Business & Legal Affairs wor Worldwide Marketing, Sony Pictures

Xavier Kochhar, Managing Partner, MediaLink

Jordan Yospe, Legal Counsel for Motion Picture, TV, and Brand Integration with Manatt, Phelps & Phillips LLP

[This was a really solid session, the panelists gave clear responses, understood that the audience is mostly small-budget filmmakers, and were trying hard to be helpful to the audience.]

--------------------------------------

Video clip: negotiations/meetings re "The Greatest Movie Ever Sold" - it's a movie about product placement, which is funded by product placement. The video is mostly clips of the filmmaker being turned down or brushed off.

Georg: Tell us about this film

Eric: Picked up by Sony Pictures Classics, our "independent" distribution arm. Oh and BTW I'm speaking today only for myself, not for Sony.

Jordan: I'm an attorney and we have a lot of advertising clients - this movie didn't make McDonald's look too good, so we couldn't get involved.

Xavier: Morgan, the guy who made the film, had the idea for this film, gave it at TED - see the TED website. Morgan is a documentary filmmaker who brings up tougher issues in a funny way. He went to Hollywood private film finance and they said no. So then he went to the brands directly. He didn't have agency or brand relationships, but he worked through intermediaries like us [on the panel]. The response he got was primarily "Morgan, you do have a brand yourself, and you're kind of controversial. This is a lot of risk for not a lot of potential upside - this film doesn't look like a tentpole film." Coke, P&G, others weren't going to touch this film. But lower-tier brands were willing to take a look.

Georg: For filmmakers looking to do brand integration, who are the key players that they need to talk to? And is it different for Sony vs. small filmmakers?

Eric: Let's first untangle the language. "Brand integration" is not "product placement". We live in a branded world, brands are everywhere. For an independent producer where every dime matters, if you can even get 100 cases of water for free [for featuring the water bottle in your film], that's a win. But for Sony, water is not exactly on our high-priority needs list.

Jordan: Most of my work as an attorney is to work on brand integration deals. As filmmakers you need drinks, food, cars, hotel rooms. We work with the product placement people. These deals are simple: "We give you water, you use good-faith efforts to get us into the movie, and you don't put our competitors' product in the movie". That's product placement. "Brand integration" is more comprehensive or involved - the water gets integrated into the storyline somehow, using a brand strategy. In this situation the brand owner can both pay you cash, AND contribute to the marketing expenses of your movie when it comes out. The latter component is called "activation". You try to integrate the product into the storyline without making it obvious that you did this. But for product placement, the main legal requirement is just that you NOT feature the competitors' product.

Georg: How can filmmakers get these deals?

Xavier: If you have a budget, you can talk to me. Depends on the size of the production and whether you have distribution. For the big studios, you're working with all the major advertisers anyway, you just call them up and say "here's what's coming out this summer, do you want your product(s) in the movie?" and then you negotiate. For small filmmakers, the easiest method is you go to the owner of some local restaurant or business [and you work out a barter]. For a mid-sized film I'd seriously advise you to work with people like Jordan here, or me - my job is to know all the agencies and it's your job [as a filmmaker] to make the best film. We don't want to be in the business of filmmaking, that's your job.

Jordan: As a lawyer I get calls every few weeks from indy filmmakers who have given money to "consultants in the brand integration space" - there's one guy who's particularly infamous, and some firms are now getting into this business [scam]. They ask for $20K to $50K up front -- and people have paid them this money -- to go "fund their picture with branded dollars". These "consultants" then disappear. And even for $50K it's not worth it to sue, which is why they ask for the $50K [and not more]. If you don't have a distribution deal, I advise you to stay away from these people. Xavier and I, our job is to make sure you're talking to the right people, typically somebody lower down the branding chain. I charge by the hour and my time will only cost you a few thousand dollars.

Xavier: Right, always do your homework, spend money on due diligence if needed. Be wary of anybody who says "I can guarantee X". Here on the panel we work with some of the largest brands in the world and WE can't "guarantee" anything. Also be wary of giving money up front.

Georg: Filmmakers might be worried about integrity of the film, not getting "too commercial" - is there a balance? And can you give an example of integrations that have worked well, or not well?

Eric: You start by looking at the script and breaking it down. Look at every prop in the film, every element, everywhere that some product might appear. We have people who do that. If we see opportunities then we bring those to the filmmaker and talk about what we could do. For a studio picture, we usually don't need "production resource support", i.e. we don't need the brand owner to provide us with the product. What we like is above-the-line media [spend] coming to assist the $30M to $50M P&A that we at Sony have to spend. There has to be a relationship, and you don't want to take the audience out of the suspension of disbelief.

Jordan: The big filmmakers worry about this too, by the way - "are you going to start jamming brands into my film?" We have a conversation and talk about what makes sense WRT marketing and the creative side of the film. Then we offer some choices, "here's what we came up with, what changes are going to happen [within the film]? What makes sense?" With Sony this is a very collaborative process, and nobody has forced a brand into a picture that I've seen. For smaller films where the money matters a lot, you have to work to find the potential integrations.

I worked on a $100M film and the director didn't have $50K to do one shot that he wanted. You'd think he could have just called up the studio and said "I'm doing this [get me the money]", but he couldn't. So we found him some money to do it [presumably via product placement]. The advertisers can be seen as resources to help you make the movie you want to make.

Second video clip intro comments:

Eric: This is a Sony film, it's a comedy. The filmmakers kept a lot of creative control.

Jordan: None of what you're about to see was in the script. With comedies you never know what's really going to work. So here they used a prop to make th movie funnier.

(Clips: Adam Sandler film where a KFC chicken bucket shows up all over the place - seems like a running gag.)

Jordan: Those showed you a brand deal that we did with KFC. The only deal up front was that one of them would carry the KFC bucket in the first scene. The other things happened later, in the other scenes, and we were on the phone to KFC saying "is this OK?" KFC ended up liking it. It wasn't me asking the cast to do this, the cast came up with it, the actor cut holes in the KFC bucket and put it on his head. KFC got 2 minutes of screen time in that film. What we do for brands is we look for scenes that are important in the film, scenes unlikely to be cut, and we say "how can I get a brand into that scene? Do they drink beer, do they drink Coke? Is there pizza? What could be in this scene that I can use as a brand?"

Georg: So is this just good luck for the brand, or did you call KFC and say they had to spend more money to help you?

Jordan: Yes those phone calls did take place. The brands have a quarterly budget and their job is to spend it. They don't take money back, but they also don't have more to spend. We actually created this clip reel to take to the KFC annual convention. We got the employees [francisees] excited and used this to try to ask for more media spend from KFC.

Eric: It also helps here that you have the talent [actors] engaged with the brand on screen. Typically you have to pay millions of dollars to get top talent to do that. Many top talent have contractual terms that limit your ability to make them interact with products on-screen. The actors are managing their own brands as well. They may also have contractual terms limiting your ability to do an after-production marketing campaign that features the actor + the brand, since that would imply an endorsement.

Georg: Are there cases where product placement doesn't make sense, but a marketing relationship does?

Xavier: Why would a brand work with a studio or vice-versa? 3 reasons:

1. Media value. This film reaches a certain demographic and we want to reach that also. We want a halo effect from the film. Impressions [here he means number of eyeball-views] are important. If only 10K people will ever see your film, it doesn't make sense for most major brands to talk to you.

Jordan: Well, even for a small film, can you say "I'll give you some cool footage of people using your product, and your ad agency won't give that to you"?

2. Yes. PR value: maybe it's a green film, environmental film. The brand says OK, I'm going to take this footage and do something with it. These budgets are often PR budgets, not media budgets, and there's usually less money there. The media budgets are the big budgets and you generally want to chase those.

The cases where a very specific product MUST be the product onscreen are very rare. As a studio, your job is to put butts in seats and sell blu-ray disks. The studios don't care that much about $50K or $100K or whatever up front, what they care about is "KFC, you spend media money already, I want you to help market my film when you do that."

Transformers: that movie has about 50 brand integrations in it. It's easy to get lost in the clutter in there. If you're in charge of a media budget, I'd advise you to hold on to a small portion of your budget for the occasional indy film which is precisely for you, like "Up in the Air" if you're American Airlines.

[Oops, we never got reason #3]

Clip: Taco Bell and Godzilla, TV ad.

Clip: Green Hornet goes to Carl's, in Black Beauty (the car) to order some chicken tenders.

Eric: For the Godzilla ad, none of the pre-film footage showed the creature, you had to go to the movie to see the monster. The Taco Bell ad just shows the tail. Studio got over $20M of above-the-line media from tie-ins. For Green Hornet, they did a special shoot with the actors, it was expensive - car, VFX, etc. We originally thought maybe some of that footage could go into the film, but that didn't happen.

Clip: Men In Black II, TV ad for Audi.

------------

Q&A

Q: How much will a brand pay per minute, or per page?

Jordan: We used to talk about that, minutes and pages, but we stopped doing that a while ago. Usually it's just "we have some scenes that we think could work". For money, it's dependent on the totality of the project - they're not going to pay for N minutes in your movie, even if it's a huge blockbuster, the brand wants to know who's in the movie, what's happening in the scene, where is the distribution, all kinds of details.

Xavier: If you're not a studio I'd be careful about using metrics [in this area]. Because then the brands are going to jump on you and say "OK, let's talk about impressions" and you say "well, it will be in 3 theaters!" [and that's not productive, obviously] Eric has a story related to music licensing here.

Eric: We were looking at one music track from a name brand, substantial record label, for a TV campaign, and they wanted $250K for the composition and another $250K for the recording. We said "look, you're trying to push this record, you GIVE us the music and we'll put the song into a Burger King campaign that we're working on." That didn't happen, but it's an example of a reversal in value considerations, value proposition.

Xavier: As a consumer, two integrations that worked for me even though I didn't see the movies:

- Nick Cage, song by Cold Play, "Fix You", I learned about the song through the media spots, not even the trailer. So I bought the song.

- Iron Man film - I loved that car, I didn't even know what the car WAS, I just called it "the Iron Man car" and I wanted one, but then I found out it was a $120K car. So instead I just bought the Cold Play song [ha].

Q: How about documentaries, can you do integrations?

Xavier: Documentaries are tougher since there's sort of no control. You can't say "here's what I'm thinking might happen, please give me $1M and we'll see what happens." If you have an actual script then you have something you can work a legal deal around - "you will do this or I won't pay you."

Jordan: If you have a certain talent in the documentary which matters to a certain brand, then it can work. For example we're doing a doc with a major NBA player right now, and we're looking for brands that want to be associated with that. But it WILL affect the creative side - it changes the structure of how the doc is developed.

Q: In the under $5M range, many filmmakers are pushing genre and elements, sex, nudity, violence, blood, etc. What's the LEAST attractive elements for brand integration, i.e. what aren't you looking for?

Jordan: Mostly common sense. If you're a brand, you want people to use your product. You want your product associated with the hero not the antagonist. You don't want your product used to hurt people. You don't want negative associations with your brand, and you usually avoid controversy. I'm not a marketing guy, it took me a while to figure this out. If it's a horror film, how will we use a brand in that film? It's still a violent movie. Some brands don't mind nudity or violence - they're usually the liquor brands and energy drinks [ha]. At the opposite side, the G and PG movies, it's very difficult. There are brands doing TIE-INS but those brands aren't directly in the movie. I don't get it, actually, these firms will advertise all over the place but they won't put their products in my G movie. There's a big concern about pushing stuff at kids [via product placement, apparently]. But PG-13 yes, it works for the brand people. With the hard R movies, as long as the brand isn't in the nude scenes. Drug use is bad for a lot of brands - they don't want that association - they don't want the press saying that this brand was associated with drug use. If it's an R-rated action film with nudity, then we can look at what we do around the hero, in the important scenes without the nudity element. For the brand manager, they ask "could I get in trouble when this film comes out, for negative brand association?"

Xavier: Make the film you want to make - the brands aren't saying "I'll change my brand campaign based on the next movie coming out" [so similarly you shouldn't go changing your movie around based on brands.]

Q: Re the KFC ad, [more info please.]

Jordan: In this case we spoke directly with the CMO, we had a relationship, we said "here's what's starting to happen on set, is this OK?" [Jordan is apparently literally on set during the filming, that's part of his job, he gets to hang around the set as the onsite product brand placement lawyer.] I can never go to the filmmakers and say "you have to cut this scene, KFC doesn't like it" - I'd send somebody else if we had to tell them that [ha].

Q: If you show a branded car and it crashes in the next scene, is that a problem?

Eric: That's more of a clearance issue, you might be misusing a trademark. But in the US you probably have pretty strong rights to do that, 1st Amendment etc.

Jordan: About cars. No underage drinking, no drinking and driving. Car guys don't like their cars crashing. If you crash a car maybe that's just a clearance issues, but if you want to work with the brand, you've got an issue.

[More discussion about shooting scenes with crashing cars.]

Q:

- How does a brand evaluate the results of a placement?

- Please share some numbers about how much was paid by a car company above the cost of the car they gave you.

Xavier: first question is good. The only way that marketers give you money, or continue to give you money, is if you have hard ROI metrics. ~8 years ago - these were the days when people would just say "we'll throw a ton of money at you and we'll see what happens". But those days are over. Particularly with digital [he means internet], you have a lot of metrics. Media buyers don't buy based on you saying "it depends". Media buyers have metrics sheets - they call it "buying spots and dots". They're buying the metrics: specific demographics with specific frequencies. This is why in Eric's business, the TV ad tie-ins and so on, they do these deals, they're very easy to put metrics around - this much was spent on the TV ads.

Jordan: Jack & Jill, I was just at that movie last night. We shot on a cruise ship. That's normally very expensive - we had to bring a big film crew onto a cruise ship, and the big stars want the big rooms. Seven figures to do that. We did an integration with the brand. Typically figures like that are low 6-figures. But this had big name stars - Adam Sandler, Al Pacino. If you don't have that, the dollar figures drop off rapidly. There was another case in the film where there's a brand involved, and in the end no money came our way, it turned into just a [trademark] clearance issue.

With cars, sometimes you get free cars and you keep them. Sometimes you get cars and they take them back. Sometimes they pay to put the cars in your movie. If you're beyond $100K then you're doing something special. What Eric does here is in the $10M+ range for media buys, that's different.

Xavier: Right, if you're above $250K deal it's something special, a studio film. Most deals are more like $50K. If you don't have those [brand] relationships, you need to rely on guys like us - me and Jordan - we bill per hour, though I do have a commission model. For a $50K integration for a small film, that's a lot of my time. There's a fundamental issue in the brand integration business, has been around for a long time, which is the deals [for indy films] are too small. I have a responsibility to my CEO and if I'm going to only make $5K on 100 hours of my time, that doesn't make economic sense.

[Eric hands out a Jack and Jill Tshirt to the questioner]

Xavier: BTW, that was brand integration within this panel. [ha]

Q: So you get paid a commission as part of your work?

A: That can be part of the model, yes.

Q: So how do we know if it's worth it to have Jordan bill us hourly.

Jordan: First of all, you should have a product PLACEMENT guy running around trying to get you free water. that's not what we do. We do integration. If your budget is $1M it's going to be tough. I don't actually care about the budget of your film, I care about who's in it, how much distribution do you have.

Eric: Right, for the Adam Sandler film it's $30M P&A from Sony.

Q: If you just show a product in a movie, is that just a clearance issue?

Jordan: If you show it and there's no deal in place beforehand, that's just clearance.

Q: But can I go in advance and say "we're going to show your brand in the scene?"

Jordan: That's placement, at best you'll get free product, probably.

Xavier + Jordan: Also BTW, most of these brands want present-set or future-set films, not set in the past. Once in a while you might get some film set in the past where it makes sense for Coke to get placement, but that's rare.

Q: Metrics, huh?

Xavier: Click-through rates, impression metrics, more. There was a recent deal where the payoff was stepped: "you get this much money at each proof of eyeball delivery".

Xavier: Two of the best integrations IMHO are Pirates of the Carribean, and Harry Potter, despite the absence of brands.

- Pirates was a giant integration for the theme parks.

- Harry Potter: you want to buy the books.

And BTW there were purposely NO integrations in those movies. There were TIE-INS, but not product integrations.

Q: Re internet, films are releasing online, getting millions of viewers. Can you do product integration here, with the TV model online?

Jordan: If you have those numbers [viewers] already, yes. Voyr.com is working in this area, they do backstage stuff for Jay-Z. We know up front roughly how many views we'll get from this footage. As a filmmaker if you DON'T have these numbers, you can't go to Xavier and say "spend millions on my internet thing".

Xavier: There's some similarity in the music business, I had a friend talking to me about how to break into the music industry now. Today's advice I gave was: if you're such a great musician, record something and put it out there. Justin Bieber is the example. There was zero risk for the sponsors when he walked in to do the deal, because he already had 15M fans. I understand that there's some sexiness to having film on spool playing in a theater, I get that, but I believe in digital [he means internet, sigh] - you can come with numbers and metrics.

Jordan: Yes, you can sell films based on short videos.

Q:

- Brand integration and product placement: are they common and effective in US?

- Are there restrictions on what you can do?

Xavier: Yes, it's effective, you should do it, if you don't then none of us on the panel have jobs. [ha]

Georg: yes, commonly done in the US

Xavier: maybe a slasher film, or lots of nudity, might not make sense.

Q: For the KFC case, did you get the local francisees to increase their media spend?

Jordan: Initial deal was with KFC corporate. Then they went to their francisees to get more money. You have to work through corporate to get to those people. And it gets complex - it's often an association of dealers. But let corporate [with the brand] work that for you.

Q: I have a sitcom built around product placement and brand integration. I spent a lot of time researching this and heard there's script analytics software that will give you ideas on how to do this. Is this true?

Jordan: When I was in film school there were claims that there would be software that would let you write great scripts [and we know that's nonsense].

Xavier: Film is art. For media BUYERS it's science, but there aren't any buyers on this panel. I'm not familiar with any software that does what you say. It's like saying that Google is going to come up with an algorithm that tells you how to direct films. [What, you haven't heard of GScreenPlay? Ha.]

Q: What do you look for in a script to figure out what items to place and where?

Jordan: I can't answer that in 1 sentence. Experience of knowing what the brands want - what is their demographic? Even if it's "boots", that's not enough - if you tell me "boots", I say "if you want boots, here's what you need to do in that bar scene: I need a big bar scene, I want a bottle on the table, I want it way more than 30 seconds, I need a bigger shot of the boots." I literally sit down with the filmmakers and go through this.

Q: If I can put a package together and pitch it to distributors, am I limiting distribution if there's a brand in there because the distributor wants to get the film on TV, and the rights aren't cleared? [At least, this is how I understood the question.]

Xavier: Really good question, this is a BIG issue, hits many films, it's a bigger issue with the bigger films. With Disney we'd get into these big complex deals. If you have a film and the storyline is perfectly integrated with KFC, but your studio is tied to McDonald's, you're not going to get that KFC money. [Not sure that this precisely answered the question, but oh well.]

-----------------

BREAK and end of first session

-----------------