Working in harmony with Hollywood

China's Pangu Investment Company has announced it has settled its dispute with Paramount Pictures ahead of the release of Transformers 4: Age of Extinction in China. Previously the Beijing-based developer filed a lawsuit against Paramount, accusing the movie company and its two Chinese partners of failing to include its landmark building in the movie as agreed. The case shows that it is still not easy for Chinese companies to have their products included in Hollywood blockbusters.

In 2009, Metersbonwe managed to place ads in Transformers 2, which was the first time a Chinese brand cooperated with a Hollywood blockbuster. Metersbonwe subsequently produced a Transformers T-shirt which sold over 1 million pieces, rapidly raising its revenues.

Most Chinese brands cooperate with Hollywood movies through intermediary agents. They will usually charge more than $1 million, this will cover both the product placement and the authorization fees for the brand to use the film's content and image to advertise and develop derivative products.

For made-in China products, which are associated with low price and low quality, cooperating with well-made Hollywood blockbusters can polish their image when they appear alongside the world's top brands.

The latest survey by the Beijing-based media-research firm EntGroup shows that over 34 percent of Chinese audiences supported Chinese brands' product placement in Hollywood movies, with only a little more than 6 percent objecting, the rest were neutral. And the majority of Chinese cinema-goers, 58 percent, think brand-building through product placement in Hollywood movies is a good marketing approach for Chinese brands looking to explore international markets and promote the brand's values overseas. That's why in recent years, many brands have tried to feature in Hollywood blockbusters, especially those films shot in Chinese locations, such as Transformers 4, which features product placements by 25 Chinese brands.

However, there are still many barriers to such product placements by Chinese brands.

First of all, there are certainly some differences between Western and Chinese advertising concepts and creation. Hollywood producers may try to present the products in a funny or an exaggerated way as this has been shown to increase their impact, while the Chinese companies want their products presented in a straightforward and positive manner. This can lead to proposals by Chinese brands that are inappropriate to a film's content. For example, Chinese dairy giant Yili requested the robots drink its milk products in the Transformers 3, a proposal which was naturally refused by the film's director. Facing such differences, it will be a long-term task for Chinese brands and US film producers to better communicate and cooperate with each other.