A Strong Case for Product Placement

Viacom, just like many other television networks, is struggling. It has seen viewership drop drastically in its flagship stations which cater to young audiences. These include the infamous MTV, VH1, and Nickelodeon. Sumner Redstone is the majority owner of the network and at age 92 refuses to admit defeat. He does not want to sell the company but his inevitable successors might be forced to if this trend continues. {http://www.economist.com/news/business/21646744-future-nonagenarians-media-empire-looks-ever-more-uncertain-autumn-sumner}

Television networks get paid by how many viewers watch their shows. More specifically, marketers pay them to market their products to reach a specific audience that can be very targeted depending on the genre of the show. So for marketers, MTV, VH1, and Nickelodeon are very important channels to reach a younger demographic. However, viewership is down across the board leading to decreasing demand from markets and shrinking revenues for the network. The reason why viewership is down is that there are many alternatives to watching a live television show. For example, many viewers will watch clips from a show on a streaming device or even tape the show and watch it later. This is a big problem for marketers because it bypasses their reaching efforts. When I tape a show and watch it at my own convenience, I do not sit through the commercials but instead fast forward through them. I am sure everyone else does the same. So less people are watching the commercials and the content as it is scheduled on television.

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For networks, they can solve this issue by offering more lucrative product placement ideas. They can have shows strategically place products in their scripts either subtly or over the top depending on the type of show and the amount the marketers are paying. By doing this, advertising messages may not get across so clearly, but watching a comedy show where young guys are drinking Heineken will get the message across to young watchers of the show to drink Heineken. Marketers will be sacrificing the concept of being fully in control of their messages for a definite reach of the target audience. This is a tradeoff that should seem like a lucrative opportunity for both marketers and networks who are being uprooted by the changing consumer trends, especially from youths.

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