Is Virtual Product Placement Coming? ‘NCIS’, ‘Friends’ And ‘Criminal Minds’ Could Help Entertainment Firms Pocket $6.6BN Annual Revenue, Report Claims

EXCLUSIVE: Virtual product placement (VPP) could be set to become big business for entertainment companies — and it’s the golden oldies that are going to drive it.

That’s according to a new report from insights firm Radicale sponsored by VPP firm Ryff, which estimates the total opportunity to make addressable revenues from feature films and TV series libraries in the U.S. is $6.6BN, with legacy titles like NCIS and Friends the best suited for exploitation.

In practice, VPP sees paid-for products and brands placed into shots in post production — effectively an alternative to traditional advertising, but despite having been around for a while now hasn’t yet really taken off.

Should that change, Paramount, Warner Bros Discovery, Disney, NBCUniversal and Netflix could be among the biggest winners, Radicale’s research claims. Collectively, the five companies could make an estimated $1.48BN a year.

CBS owner Paramount is estimated to likely make the most ($412M), followed by WBD ($323M), Disney ($320M) and NBCU ($300M), with Netflix the lowest benefactor ($127M). For Disney and Netflix, these figures are around 30% and 10% of the total ad revenues, respectively.

The $6.6BN figure is derived from existing content libraries estimates in a PQ Media report from this year.

Radicale’s research suggests genres such as sitcoms and procedurals are better suited to include VPP integration than sci-fi and fantasy. Paramount’s deep library of cop shows comes in handy here, and the report pointed to NCIS as potentially the most profitable show.

The CBS drama’s 440 episodes to date provide a revenue opportunity of $23.1M, while CSI: Miami is worth $11.6M and NCIS progenitor JAG $11.4M. WBD’s sitcoms Friends ($11.8M) and The Big Bang Theory ($8.4M), Disney’s Criminal Minds ($9.7M) and Desperate Housewives ($9M) and NBCU’s Chicago Fire ($12M), The Blacklist ($10.9M) and The Office (9.4M) also have decent prospects.  

Cautious approach

However significant the revenue potential, product placement is always a delicate business given viewer sensitivities. U.S. media giants have taken a cautious approach to VPP, with the report noting Netflix has broadly eschewed paid product placement in its shows to date, Peacock only recently adding ‘In-Scene Ads’ technology and Prime Video unveiling a beta version of VPP back in May that allow inserted signage and billboards during post-production.

Radicale also estimated the live sports market in the U.S. could be worth $7BN in VPP, using a “conservative assumption” that VPP makes the estimated total value of spent on sports rights by the biggest companies ($24.2BN) around 20% more valuable.

The Big Four U.S. sports – the NFL, NBA, MLB and NHL – have a collective potential value of $3.2BN, while English Premier League football is worth $860M and Formula 1 somewhere in the region of $1.5BN-$1.8BN.

The report suggested companies built on technology like Amazon and Apple would be well set to leverage their sports broadcast rights with VPP and customer data sets.

We’ll see next year if VPP becomes a meaningful part of media firms’ business plans, or if it’s a false dawn.