A couple of weeks ago, a research firm called Concave Brand Tracking drew some unexpected attention from Netflix after claiming that season three of Stranger Things contained about $15 million worth of product placement.
Netflix pushed back on the report’s implications, telling Concave that it wasn’t paid by Coca-Cola, Burger King, or any of the other brands that appeared in the hit show. After a “very polite discussion,” says Concave director Dominic Artzrouni, the research firm added a quote from Netflix to its report, saying that the products in Stranger Things 3weren’t paid for or placed by third parties. “They’re all part of the Duffer Brothers’ storytelling, which references 1980s consumer and popular culture,” Netflix’s statement said.
“It seems like they really want to stay away from that image of them selling out,” Artzrouni says.
Similar disclaimers have popped up elsewhere. Vox and CBS MoneyWatch ran the same statement from Netflix in its stories on Stranger Things product placement, and series creators Matt and Ross Duffer told the New York Times that none of the brands in season three gave them a revenue cut. Netflix even contacted CNBC about a year-old story to clarify that the company wasn’t paid to feature KFC in Stranger Things season two.
Despite the pushback on the idea that it accepts payment in return for promoting products—an arrangement that sounds suspiciously like a form of advertising on an ad-free service—Netflix has much to gain from relationships with brands, whether or not anyone writes anyone else a check. That’s especially after a quarter in which it lost U.S. subscribers. Even if money doesn’t change hands, several brands featured in Stranger Things are spending big bucks to promote the show in their own marketing, resulting in a quid pro quo that ultimately helps Netflix attract more subscribers. While Netflix insists that it won’t run ads on its streaming service, it can still lean more on product placement to ramp up its marketing for future hits. In that sense, Stranger Things may be a blueprint for what’s to come.
HOW A PRODUCT GETS ON TV
Stacy Jones, the CEO of the content marketing agency Hollywood Branded, says there are three main ways in which a product gets onto a TV show.
Traditional product placement occurs when a brand loans or trades its product to a production. A beverage company, for instance, might supply a production with water and soft drinks, or a phone maker might send handsets to use on camera so the production doesn’t have to buy its own. In these cases, the production’s main goal is to offset some costs and stay under budget.
A more formal kind of product placement, Jones says, is “brand integration,” in which the brand pays a fee to secure a more prominent role in the show. These kinds of arrangements, which took off during the reality-TV heyday of the early aughts, might guarantee a close-up shot of a product logo or a mention of the product by name.
Finally, there’s “copromotional marketing,” in which the brand helps advertise the show through its own marketing channels in exchange for promotional placement. Though Heineken was rumored to have spent $45 million for placement in the James Bond film Skyfall, that doesn’t mean the production made $45 million off the deal. Instead, Skyfallbenefited from the millions that Heineken spent on beer ads that also mentioned the film. This approach tends to be more common in movies than TV shows, Jones says, but that’s starting to change with streaming services such as Netflix, whose full-season releases have the same impact as a new movie release.
Jones says Netflix shows have been involved in all levels of product placement—either on its own or through its production companies—but Stranger Things falls mainly into the copromotional category, featuring brands on the show in exchange for them marketing Stranger Things in the real world. It’s a mutually beneficial relationship. Burger King, for instance, is marketing an “Upside Down Whopper“—an inverted hamburger in special packaging—while Coca-Cola is bringing back New Coke. As of this week, Concave estimates that Coca-Cola alone has benefited from the equivalent of $3.8 million in advertising from the show, based roughly on the screen time its product got on the show and the number of people who’ve watched.