Industry Scramble for Product Placement Profits Continues

NEW YORK (AdAge.com) -- CBS is considering charging brand integration fees as demand for branded entertainment platforms continues to increase, the network's chairman, Leslie Moonves, said.

Photo: AP CBS chairman Leslie Moonves wants institute brand integration fees.

'Should be looked at'
Responding to a question at the Association of National Advertisers' TV forum on Wednesday, Mr. Moonves said, "There is still a cost associated with putting commercials into our shows. Is it something that should be looked at, we're looking to talk about it."

Another senior executive at CBS said separate integration fees could become a reality later this year.

The recent legal spat between Mark Burnett Productions and product placement agency Madison Road revealed the kind of catfights going on over who gets to share in such fees. Mark Burnett Productions currently charges integration fees of up to $5 million for The Apprentice, a show it produces for NBC. The company also produces reality show juggernaut Survivor for CBS.

$10 million integrations
CBS does not currently charge a separate fee for product placement deals; pricing is wrapped into overall media discussions. Though Mr. Moonves, who is also co-president and co-chief operating officer at CBS parent Viacom, said he would be willing to entertain marketers who want to spend $10 million for product integrations without buying separate ad time on programming.

Mr. Moonves, speaking as part of a question-and-answer session at the ANA event, said the cost of producing programming had risen and that producers such as David E. Kelly have said they'd rather write a car brand into a script than lose $100,000 off the budget.

Commenting on likely format changes to CBS News, Mr. Moonves said: "It has not been a banner year for CBS News, but we're making changes that should have made a long time ago. People there thought Edward R. Murrow was still down the hall. ... Cable news is affecting how we do things, but we are very pleased with Bob Schieffer." He said changes to the CBS Evening News format were unlikely to be made before summer.

Viacom split
Mr. Moonves also went out of his way to portray his portion of the soon-to-be-divided Viacom as a growth business. He said that the group under his aegis, which also includes radio and outdoor divisions, could see growth from local markets. He said radio still made a $1 billion in profit.

Press commentary of the de-merger has highlighted co-president Tom Freston's side of the business, which includes cable networks (MTV in particular) and Paramount Pictures, as more growth-oriented.