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Strategies for the Acquisition of Rights to

Produce New Entertainment Content

Source underlying rights, original idea or rights to make


derivative content from an existing rights holder.

Commission and own rights to new creative (e.g. scripts,


music, art direction, costume, etc.)

License rights to any source content (e.g. recorded


music, stock footage, trademarks)

Own and control the copyright of the new content


created which includes all intellectual property rights.

Concept creation and acquisition of necessary rights to produce


and own copyright to new intellectual property FOCUS OF THIS
LECTURE

Development/pre-selling to finance content

Production

Exploitation

New ideas developed


by owners/employees
Pitches of new ideas
Speculative scripts
based on original ideas
Commission creators
to come up with new
ideas/concepts
Invented or based on
real events

Original ideas

Create new content by


adapting existing and
copyrighted material
(based on derivative
rights)

Derivative/adapted ideas

Publishers
print/games/web
Development
companies
Production companies
Indie Producers
Studios
Live theatre
companies
Creators

Sources of underlying
rights

Internal Development
Team (in-house)
Co-ventures with
creative producers
Creative that walks in
the front door with
spec scripts
Reach out to owner,
option/purchase
Bid for it in an auction

Strategies to access
rights

Properties derived from the


literary/print world:

Books, short stories and illustrated


books
Magazine articles/magazine brands
Newspaper stories
Internet stories
Comic books

Legit theatre

New content in a new medium


New theatre production based on existing
production/scripts/music design

Movies and TV programs:

Filmed content into plays or books


Re-make in the same language as original
Re-make in a new language
Sequels, prequels
TV to movie, and vice versa
Re-purpose material existing content for
new uses/platforms (e.g. Wings TV
Channel is based on USAF archives)

Format rights (e.g. Fear Factor and


American Idol)

Local versions of variety/non-fiction


Scripted: e.g. UK version of Law and
Order

Toys and consumer products

Characters from video games

Experiences like theme park rides (e.g.


Pirates Caribbean)
Life rights, living and deceased (often tied
to a book).
Established franchises
E.g. Star Wars, James Bond, Harry Potter

Major franchises are controlled by large

entertainment firms who created them


or bought controlling rights (e.g. Disney
bought Marvel for $4 B and LucasFilm for
$4B). Studios rarely license derivative
rights to competitors.

Public domain (free): published works older than 50 years


from death of Author (Canada). In the USA most content
produced before 1923.

Historical events (e.g. 911) and news items


Political people/orgs in the public domain (e.g. film about
Obama, Mormon religion in Book of Mormon)
Stories about people that are deceased but not protected
by trademarks (e.g. Joan of Arc easy, Elvis - hard)
Re-make of original material in the public domain (e.g.
Alice in Wonderland, Grimms Fairy Tales)
Public domain rights are often combined with copyrighted
material (e.g. Rights to a Non-fiction book on a public
domain topic)

First step is to determine who actually controls the rights:

Agents/managers/entertainment lawyers who rep talent


and properties (living and dead). Cdn example is
Westwood Creative Artists http://www.wcaltd.com/

Live theatre licensing agents, e.g. Samuel French


http://www.samuelfrench.com/
Disney http://www.disneytheatricallicensing.com/

Creative directly, i.e. writers, directors, actors, authors,


producers who often solicit content producers.

Production companies, studios, theatre companies and


other entities who control content.

Production

companies, studios, theatre companies and


other entities who control content.
Book,

magazine and comic book publishers, eg.


Penguin/Random House
http://www.penguinrandomhouse.biz/rights/
Estates

for classic literary properties as Babar and talent


such as Jimi Hendrix e.g. Experience Hendrix LLC
http://www.jimihendrix.com/us/experience-hendrix-llc

Format companies (e.g. Endemol


http://www.endemoldistribution.com/content/titlese
arch-formats.aspx
And e.g. Freemantle
http://www.fremantlemedia.com/Production/our_bra
nds.aspx

Broadcasters who own content (e.g. CBC, BBC


control vast libraries)

Consumer product companies

Foundations and institutions: Smithsonian, National


Geographic and Jacques Cousteau Foundation
Archives (mix of public domain and copyright
protected)

Copyright protected
Are rights accessible?
Fit between idea and
organization/people
Financeable and
makeable idea
Unique concept
Exclusive rights
Positive market
response

Good Ideas

Rights not avail, messy


or too costly.
Dont trust partners
Content is unfinanceable
Too small or too big
Nothing unique/weak
brand
Already shopped
Negative market
response

Not so good ideas

Acquire all rights needed for market exploitation today,


tomorrow. One never knows where markets/tech is heading.

Where rights are reserved and not available, understand the


implications on new content being created (i.e. If you cant get a
specific right).

Ensure rights are internet/digital ready that can ride the roller
coaster of tech change.

Acquire rights for the least cost up front to reduce risk.

Utilize contingent payment methods where possible, i.e. options,


pay-as-you-go and based on future success metrics v.s. big
payment up front.

Manage contractually the approval rights of parties controlling


rights and limit/eliminate the need to ever having to ask for
permission.

Minimize the need to ever have to go back and ask a


rights holder for new rights in the future. Todays friends
may be tomorrows adversaries. Giving a rights holder
decision making powers is giving up leverage.

Be careful not to muddy chain of title by allowing others to


introduce elements they own as a back-door tactic to gain
access to valued rights (e.g. the first party owns the
underlying rights but a second party owns rights to the
script used).

Protect against claims of plagiarism and copyright


infringement (e.g. Enforce strict rules among creative team
to keep the rogues at bay).

Legal documents should be clear to reduce


misunderstandings in the future. Right to assign underlying
rights is important.

Rights holder grants the producer the exclusive option to


purchase rights for a limited period of time (e.g. 1 to 2
years) for an option fee. These provide the producer with a
contractual hold on the underlying rights in exchange for a
modest advance with pre-agreed purchase terms.

Some arrangements provided for a second or third payment


to extend the term of the option.

The option agreement would also include the terms of the


purchase agreement (with pre-agreed terms) that is
triggered when a pre-condition is met:
Payment of a fixed purchase amount, payable at any time
during the option period (i.e. payment exercises option)
Payment based on a formula (i.e. if a TV program x
dollars, if Hollywood feature y dollars, if play z dollars.)

The option and purchase agreement would also specify if its


a complete assignment of underlying rights or the right to
make limited content.

Original ideas have a blue sky range of available rights nothing


has already been licensed. Get every right to reduce downside
risk and maximize the ROI. Licensee usually has more leverage
with unproven concepts.

Derivative content may be subject to pre-existing grants of rights


to others clutter, or even competition. Licensor usually has
more leverage. Exclusivity may be limited (say 5 years).

Specify exactly what new content can be created (i.e. How many
productions and what type).

Options to produce additional content? Rights to invent new


characters and stories.
Core content produced must be for term of copyright.

Underlying purchased should allow for full exploitation of the new


content for the term of copyright, world uses, all media, etc.
unless there is a practical reason that this cannot occur.

Exception would be if the intention is to produce only regional


content (e.g. a play in Toronto)

Exception would be if the license is to make a formatted show for


a local market only (e.g. Big Brother Canada)

Exception would be if rights are reserved/licensed to others (ie.


The rights to adapt a script to make an English language film
cannot conflict with the existing Non-English language film.

Territory of use (usually global but might be limited for live


theatre/format.

Term of uses (usually in perpetuity but may be limited for live


performances)

Language of use (to dub/version original version versus making


original versions in multi languages)

Exclusivity of use (for full term?)

Ancillary rights such as merchandising and licensing rights (i.e. to


monetize rights related to the new content created)

Full Grant of Rights the highest level:


Outright grant of all rights: included but not limited to: all media
(theatrical, television, satellite, cable, internet, video), all
publishing, all live performing rights, ancillary including
merchandising and licensing, all internet/telephony rights, for all
time, for all uses, all languages and formats, all rights exclusive,
all other uses not yet invented, in perpetuity and for the
universe (earth, moon, mars, other galaxies, etc) plus the right
to sub-license, sub-distribute, sell, dispose or rights and the
right to market publicize, along with full waiver of all moral
rights, and the right to assign rights, etc, etc, etc.

Media and uses


Language
Territory
Term
Exclusive/non-exclusive

Rights defined by MEDIA AND USES:


Media rights (e.g. all forms of TV (including
conventional, pay, cable, satellite, pay per view,
etc), theatrical, DVD/home video, ancillary and nontheatrical (such as airline)
Internet/new media rights (down load: temp,
permanent, streaming, VOD free, VOD sub.)
Mobile/wireless rights
Format rights (right to make new format versions)
Live theatre or public performance rights
Publishing rights
Re-print rights
Re-release rights
Recording rights

Rights defined by MEDIA AND USES (cont.)

Music publishing rights


Merchandising and licensing rights
Likeness rights (and right to use name and image)
Publicity rights
Moral rights
Adaptation rights (and right to abbreviate)
Right to create new original stories based on the
underlying property
Trademarks
Retransmission rights
Multi-media rights
Foreign language rights

Rights defined by LANGUAGE


All languages; or
Limited to pre-agreed languages e.g. English Language
Original language version only versus the right to dub or subtitle into foreign language versions (usually granted).

Rights defined by TERRITORY


All universal or world rights; or
Limited to certain countries or territories such as Canada only,
North America only or based on industry standard definitions to
limit rights to some form of cultural boundary like Francophonie
(France, French-speaking Europe and former France colonies where
French is spoken.
Airline, ship, military, embassy rights are usually included with base
country/flag carrier.
In the case of live performance, rights may be limited to a city or
even a single theatre.

Rights defined by TERM


Perpetuity/statutory copyright limit is the typical grant for new
content but limited by Copyright protection in practice. Content
Producer needs long term rights as the exploitation deals they
enter into are likely also for long term rights.
Limited term in the case of live productions.
If limited, what pre-agreed options exist to extend term
(perhaps based on success metrics).

Rights defined by EXCLUSIVITY


Exclusive rights ensures no direct competition or confusion in
the marketplace.
Exclusive rights are needed to in-turn license exclusive rights in subterritories.

Exclusive perhaps for a set term, then non-exclusive thereafter


(ie. on a hot property, underlying rights holder may provide a
window before any new content is licensed.
Exclusive except for pre-determined pre-existing uses (common
for derivative rights from franchises).

Rights grant: media uses, term, territory, language and


exclusivity (as described in earlier slides).

Chain-of-title review/legal opinion/warranties (to make seller


actually owns the rights). I.P. Properties with long histories may
have compromised rights due to errors/legal disputes.

Access to related agreements to determine if underlying rights


really are free and clear and that the party licensing the rights
really owns them.

Reps and warranties from rights holder. In extreme situations,


grant of rights may be conditional on a positive Legal Opinion
from and Entertainment Rights Lawyer with valid errors and
omissions insurance.

Fixed Purchase Price (e.g. $50,000) or Variable


Purchase Price (e.g. $50,000 or 2% of the production
budget whichever is greater. When paid? Often first
day of principal photography.

Entitlements to future royalties and other forms of


Contingent Compensation: Referred to a Back-end.
Based on gross receipts
Based on adjusted gross receipt or net profits
Based on uses vs. receipts vs. units sold (or some
combination)
Are up-front fees advances against backend
royalties?
Any Agents Packaging fees with a back-end
entitlement? (e.g. ICM, CAA) You hire their people, you
get their packaging deal (US/Hollywood practice)

Does the underlying rights holder have approval rights


to any elements:
Creative
Consultative
business
publicity
joint shared
What other writers/creative can be hired.
final say
How approvals are exercised?

Credits: type, size, placement, linkage with other credits


Production and publicity/advertising

Right of underlying rights holder to withhold credit

(ie. pull their name?)

Reversion/turnaround provision what happens if


development initiative fails? Can creator re-acquire rights
i.e. do they automatically revert?

Are additional services of creator required (such as


consulting, writing, producing, publicity, guest/cameo,
services)? The touch of the creator may help new
content including a positive endorsement both to get the
content financed and as promo with the end consumer.
Will the creator agree to attend pitch meetings to sell the
new content?
Are additional services pay or play to allow for creator to
be dismissed in the event of conflicts?
Entitlements to receive profits from other works (i.e. What
if new content re-vitalizes a dormant brand?)

Options for other works (e.g. next project) to compensate


aggregator for investment in I.P. Brand/goodwill value.
Range here is:
No options one-off deal.
First right of negotiation
First and last right of negotiation
Pre-agreed business terms within option period (i.e. a la
carte pricing based on content produced).
Carte blanche to produce/assign rights for unlimited new
content (i.e. does the licensee step into the shoes of
licensor)
Does creator get travel & perks and attendance at awards
events?

Content Producer initiates and an inquiry to


determine who controls targeted rights and are they
available.
Offer is made in writing via email with phone follow
up.
Information may be exchanged (like underlying
agreements) that are shared after a Non-Disclosure
Agreement is signed by interested party.
Deal concluded via emails or in sometimes via draft
agreements.
Draft agreement is prepared (if negotiation was via
email) and negotiated between lawyers.
Execution of agreement to confirm acceptance and
payment of consideration.
Press release to trade or communicated only to targeted
funders (e.g. broadcasters or distributors).

Next step is often to commission a writer to create some


document to help sell the new content (e.g. pitch
document or treatment). Rights need to be acquired by
the producer to this work (all rights/in perp).

When scripts or screenplays are commissioned, these


are often under guild collective agreements (e.g. Writers
Guild of Canada) and the assignment of rights is
included in the guild contracts.

Everyone that goes near the creative must provide a


full grant of rights or release to their contributions (e.g.
story editors, directors, actors, art directors, music
composers, film editors, special effects, etc

Strict discipline and procedures are needed to ensure no


cracks or need to go back and ask later

Public domain/non-copyrighted/trademark free, is precleared/free, e.g. Beethoven composition (not recording)


filming The White House.

Rights or clearances are needed for all pre-existing


copyrighted material used in the new content.

Source music (e.g. The Who Song/theme song on CSI TV


series), synchronization rights to a) composition/song
and b) the actual recording.

Stock footage (e.g. clips of aircraft landing or historical


footage used in documentaries)

On screen artwork, logos, trademarks, names,


likenesses, people interviewed, etc.

Written and legally binding agreements for all


commissioned creative and source content.

Pre-clear any issues with legal counsel. More expensive


to not film than have to edit out later or be held hostage
by rights holder later.

Content need to produce a clean chain-of-title for


funders, broadcasters and distributors with all rights
held in prod co. who makes the new content.

In film and television Errors and Omissions insurance


is used to lessen infringement risk. The insurer (eg.
Chubbs) uses a lawyer to review content (script stage
and finished content stage). Buyers and key creative
get added to the E&O Policy.

Questions and Open discussion

Created by Steve Ord, Sept


2015