Content creators in the digital era have it pretty good.
You can create content on a shoestring budget–you can literally pick up your iPhone and make a movie. You can post content on YouTube for free and have millions of potential viewers in seconds. Moviemakers also have unprecedented access to funding, including new sources of money like crowd funding, and moviemakers have social media to advertise and promote their work, for free.
You can reach literally millions of people in an instant. It’s kind of incredible.
You also have several new platforms–Amazon, Hulu, Apple, Spotify, Vimeo, Netflix, YouTube–all looking for exclusive, original content for their platforms, and they even have money to pay for it! They are looking to acquire and fund projects at a fast pace to attract (and keep) subscribers, creating a huge demand for content. It truly is the age of content.
But change begets more change. And with all of these new outlets (most of them traditional tech companies) comes change with regard to how you make and deliver your project.
Many indie moviemakers are accustomed to calling the shots. They finance their projects through private equity, grants, tax credits and “loans” from their relatives, always retaining final cut and working at their own pace. However, if you want to take advantage of these new revenue streams and exploitation on these new platforms, you may need to alter your production m.o.
Entertainment attorneys Lisa A. Callif (R) and Michael C. Donaldson (L)
When a streaming platform or any media company funds your project, you now have a boss and you must work in accordance with the company’s rules. Your flexible attitude about production schedules, budget and location agreements need to adjust. You have a boss to answer to, a tech company, who expects you to deliver, on-time and on-budget, and in accordance with their delivery requirements, which will be included in a heavily negotiated agreement.
This is all very doable and in many respects is positive. It’s just a matter of adjusting your mindset and following directions—to keep it very simple.
The more challenging aspect of this funding model is not the budget or being buttoned up or sticking to a schedule, but rather it’s the real legal issues—copyright, trademark, personal rights and more.
At a time when independent moviemakers have begun to figure out that they do not need to adhere to studio-driven policies about copyright, trademark and personal rights issues, media companies are imposing these policies on moviemakers once again. Many of these policies are not required by law, but rather developed for corporate purposes. To reduce risks and avoid claims.
One of the great advantages of an indie moviemaker is that she is not beholden to studio-driven policies. Indie moviemakers can rely on the letter of the law. With a good clearance attorney, she can use that to her advantage. She can secure insurance and work with her distributor to get them comfortable with clips being used pursuant to fair use or an interview subject who has not signed a release, for example.
However, when the indie moviemaker’s project is being funded by a studio with deep pockets, that changes the equation. Now the legal landscape is more akin to a traditional studio-driven model. This increases budgets and potentially makes it more challenging to tell stories. This shift is causing a fracture within the independent film space, as these larger entities still want cost-effective content, but require more rights and clearances, which can be expensive.
Here’s an example. One of our clients (let’s call him Sam) used the same composer for several projects. Their arrangement was a friendly one. The composer charged Sam a reduced rate, but in exchange, the composer licensed the score for use in the film and held on to the copyright. We negotiated a holdback on the exploitation of the score, so the composer couldn’t use it until two years after the initial exploitation of the film. It was a win-win: great score, reduced fee and the composer got to hold on to the rights to hopefully capitalize on the score down the road.
Cut to Sam’s next project. This one he pitched to a studio that loved it and is financing the whole thing. Yay! However, the studio’s policy is that all scores must be a work-for-hire and all rights must be exclusive. Sam wants to use the same composer, but the composer wants double his normal fee because of this arrangement. However, Sam’s budget doesn’t support this fee. He didn’t account for an increased fee, and the studio is not sympathetic. As a result, Sam has to scramble to make this work—amend the budget or find a new composer.
In another example, documentary moviemaker (let’s call her Sara) just completed her fifth film. Sara relies heavily on fair use and license-only materials she is legally required to. We work very closely with her and make sure that all the materials she utilizes are solid fair use. She is always successful in obtaining E&O insurance and she’s never had a claim on any of her films. The studio finances her sixth film. They tell her early on that they only want her to use fair use materials when absolutely essential—basically only if the material is unavailable for license. Her film is clip intensive and this policy more than doubles her licensing budget.
Luckily, we caught wind of the issue early on and were able to negotiate with the studio to make this work. The client moved some things around in the budget and we reached some reasonable compromises with the studio, so that Sara was able to make the film utilizing fair use and the studio was on board with the process.
The important takeaway is simply that moviemakers need to be thinking through these issues from the beginning. Understanding that the production process is going to be different allows the moviemaker to deal with these issues early on and adjust expectations. This includes budgeting accordingly, getting legal involved early, having clearance discussions from day one. The key is full disclosure and transparency. No one wants to compromise the moviemaking process or be at risk to not fully deliver the project.
Enjoy this time of robust content creation, but be smart and prepare yourself. Ask questions and ensure you understand the process prior to finalizing any budgets or committing to any legal arrangements. MM
Lisa Callif is a Partner with Donaldson + Callif, a Los Angeles-based law firm representing independent producers of film, television and web-based content in all aspects of creating their projects, including financing, development, production and distribution. As part of her practice, Lisa does a significant amount of clearance work for documentaries and narrative projects, including fair use analysis and personal rights.
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