Madison + Vine - Universal asks brands: Can we be co-creators?

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Universal Pictures is developing a strategy to move the integration of brands into entertainment properties to a deeper level that goes well beyond product placement.

The studio sees opportunities for marketers to "co-create" films and to set aside research and development funds for script development. In exchange, it believes the entertainment industry needs to develop a more sophisticated understanding of brands' strategic goals rather than viewing marketers merely as a source of funding.

"My question is, can we work with brands so we're not force-feeding them our already-baked product?" Universal Vice Chairman Marc Shmuger said during a recent speech at an entertainment marketing conference in Los Angeles. "Can we co-create?"

Although the marriage of brands and entertainment properties is a hot topic on both coasts, Mr. Shmuger is one of the highest-ranking Hollywood studio executives to champion a co-production model for films similar to one that's in place for some unscripted TV shows. He said he plans to discuss the concepts soon with potential brand-marketing partners.

bypass one-time deals

Among his suggestions: Brands should allot a portion of their R&D budgets for script development and should consider longer term deals, such as sponsoring a season or slate of movies.

The current marketplace is sparking many such conversations in Hollywood and on Madison Avenue. Entertainment companies face rising production costs and view marketing deals as a way to offset costs and extend marketing budgets. Advertisers, meanwhile, are exploring new ways to reach consumers as digital-video recorders make it easier for them to avoid 30-second spots.

Robert Riesenberg, director of Interpublic Group of Cos.' Magna Global Entertainment, said such partnerships need to be carefully crafted. "If you're trying to create a story for a brand, then you're starting at a very bad place," he said. "But if a creative idea has an application for a candy company or a car, that's great."

Miramax and Coors last year formed a partnership for product placement in films and at premieres, and Revolution Studios and Ford have aligned in a non-exclusive deal. The Coors/Miramax relationship does not extend to co-production, although Coors did get its spokestwins into the recently released hit "Scary Movie 3." The Ford/Revolution agreement will give the studio access to the carmaker's R&D process and put the partners together early in the filmmaking process.

Co-producing films is much more complicated and costly than churning out TV episodes, said Lee Gabler, co-chairman and partner of Hollywood talent agency CAA, which has been instrumental in marrying brands with TV properties. "How will the deficit financing work? How will the project be designed so that the brand message is effective? And what about the two or three years of development?"

`emblazon an image'

But Mr. Shmuger said the ability of films to "emblazon an image into the popular culture" makes them an unparalleled marketing vehicle. Hollywood, although known for its slick PR machinery, hasn't been good at communicating its own best selling point, he said.

"Brands are dependent on creating images that resonate," Mr. Shmuger said. "There's no better place to do that than on a movie screen. If the project can be developed to be organic by design, the opportunities are endless for creating value to both parties. You have to approach it strategically, not exploitatively."

Pitfalls abound. A movie could be destined to fail if audiences perceive it as crass commercialization, just as viewers have tuned out some brand-integrated TV shows. Talent, always a variable in film promotion, has to get in line, and studio executives have to be more forceful about making actors understand the value of brands' marketing muscle, Mr. Shmuger said.

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