New Policy for Product Placement in Feature Films

Toronto based Veni Vici Entertainment Inc., and its associated companies, KiX PiX Productions, GVTC, Inc., and Apple Pie & Curry Entertainment have settled on an uncomplicated formula for structure of product placement deals in feature films, involving for the first time, CPM.

Since most of Veni Vici’s features will avoid major stars and will have conservative budgets, and since no one can predict box office, Veni Vici’s product placement deals will be structured for payments at the back end when numbers can be certified and CPM can be applied. This eliminates risk for the advertiser and provides a measurement to which cost-per-thousand can be applied.

Depending on the product, the quality and timing of the product exposure, and the complexity of the placement, the advertiser will pay a nominal down payment, which will be subsequently deducted from quarterly payments based on box office numbers and pre-agreed CPM.

The numbers are determined by dividing the official box office figures by the average ticket prices in designated territories. For instance if the U.S. box office on a film comes to $20,000,000 during the first quarter, this number is divided by $6.21 (the average ticket price based on the latest 2004 Ernst & Young survey for the Motion Picture Association of America) to determine the number of ticket buyers (3,220,612 in this case)

This number is divided by 1,000 to arrive at the CPM-base (3,221) and multiplied by the pre-agreed CPM which may range from $10 to $19 ($32,221 to $61,119) Later exposure on DVD will find the CPM reduced by up to 50% off the original rate.

Andy Halmay, a multi-award winning former ad man (Y&R, JWT, B&B, etc.) and president of Veni Vici Entertainment, says "This can’t remotely be compared to the recent fly-by-the-seat-of-your-pants product placement deals in TV where if CPM were applied it would choke an elephant.“

To accommodate advertisers, media buyers and product placement agents, Veni Vici set a simple modus operandi which saves the advertiser time and money. The prospective product placers tell Veni Vici what products they have and what audience they seek. (Movie audiences are young. Fifty percent are between 12 and 34) Veni Vici then determines if the product would realistically fit into any films it has in development. If there is a potential fit, Veni Vici’s writers develop the integrating scenes and provide the prospective product placer with a copy of the screenplay and the scenes in which the product could appear. The product placers then decide if this suits their needs and a deal is made or passed.

Halmay, who developed the original vacation time share concept and the grandfather of today’s music videos, feels Hollywood has gone insane in budgeting current films, as have some overly-eager product placers in television.

His ambition for Veni Vici and its linked companies is to achieve the highest ROI in the motion picture industry. With that in mind, he will buy into an international distribution sales agency and is preparing to take outsourcing to India one step further - by developing films that appeal equally to Bollywood and Hollywood audiences and, by producing up to 90% of the content of these films in India, where costs can be brought down to fractions of American costs. Since visual effects will be more and more in demand in films, Halmay seeks to invest in or acquire an Indian VFX house where comparative costs can differ dramatically.

Veni Vici’s first film, "The Horror of Surphanaka," finds three American college girls flying to India to surprise their boy friends who are there on an archaeological dig. They get the surprise of their lives when they find the boys missing while a monster out of Indian mythology – well known in India but a new Godzilla to the rest of the world - has materialized and is on a killing spree. This film, an Indian co-production, will be released early in 2006.

In 2006, KiX PiX will produce in India "Dangerous Days for Dragon Dancer Vigilantes" which will feature David Stevenson and Bob Sapp. Also, Halmay, in collaboration with India's Anand Bharadwaj, will produce "Beats Viagra," a riotous comedy about an Indian philosopher and an American hustler who try to launch a chain of Tantra instruction schools throughout the U.S.

The latter will accommodate a ton of product placements since the American hustler will constantly introduce the Indian philosopher to American products that are new to him and which he likes to try out, thereby providing the products with demos.


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