Online Video Gets More Product Placements

If you’re a long-time reader of the HDTV Almanac, you know that one of my favorite hobbyhorses to ride is the question of “who is going to pay for the video content?” Advertisers have long been aware that we’re skipping their commercials with our DVRs, but they were at a loss about what to do instead. Some of them are smelling the french roast, however; Nike has cut its television commercial budget by 30%. But if the advertisers leave television, how with the content creators get paid?

I’ve long been a fan of product placement. The practice of putting products in television episodes and movies is nothing new; it has been around much longer than Jack Lord’s big black Mercury on “Hawaii Five-O”. (And who can forget the Reese’s Pieces coup when Mars turned down the chance to have M&Ms appear in the movie “E.T.”?) Product placement is alive and well in both television and movies, as witnessed by the fact that just about every laptop you see on screen has the glowing Apple logo in plain sight.

Now it looks as though product placement is coming on strong for streaming video as well. With online services now producing their own content, they too have the opportunity to make deals to include products in the scenes. An article in Online Media Daily includes an interview with YouTube’s Suzie Reider, head of industry development. According to Reider, advertisers realize that a growing share of their audience is online.

For example, a company called Alphabird is going to produce a new comedy about a home handyman, and it will serve as a vehicle for product placements ranging from tools to appliances. The article doesn’t mention what portion of the production costs will be covered by these deals, but it is interesting that the show is being built from the ground up, so to speak, with product placements in mind. Instead of the mythical Binford Tools of “Home Improvement,” we can expect to see familiar brands in these episodes.

How will consumers react? Well, it’s been going on for a long time already, so I expect we’re more or less used to it by now. It’s only when it’s done with a heavy hand that it becomes objectionable, such as a long shot of a General Motors car driving down a driveway while the cast of “The Mentalist” does some voiceover dialog. (Am I the only one who gets bugged by that? If you turn the sound off, the shot is indistinguishable from a stand-alone commercial.)

Done right, product placement subtly just makes you want to get a pair of those jeans that the star is wearing, or drink that brand of beer, or whatever. I believe that it is likely to be a major part of production funding going forward.