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Managing Your Rights

How media producers can best protect, control and exploit their creative and intellectual assets in a multi-platform world.

NMK seminar report from April 2001. By Colin Kirkpatrick.

The contest for ownership of intellectual property is one of the key battlegrounds of the digital economy. For independent TV producers, who have traditionally had to surrender intellectual property rights to broadcasters and commissioners, the growth of new platforms has serious implications.

Producers and broadcasters alike recognise that emerging digital platforms represent new opportunities to exploit the commercial value of intellectual property, and both parties are keen to secure their piece of the pie. For the independent production sector, this means trying to implement new business models that shift the balance of power away from the distributors and towards those who actually generate the creative property.

Last December (2000), some of Britain's top indies wrote an open letter to the government, prior to the publication of the Communications White Paper. Companies such as Hat Trick, Celador and Tiger Aspect stated that "independent producers like us are seeking to embrace the new media opportunities not just by creating television programmes, but also by developing and managing media brands derived from the intellectual property that we, after all, created in the first place."

Managing Your Rights, the second of NMK's Digital Synergies seminars, sought to examine these issues. Significantly, the event coincided with the first ever World Intellectual Property Day, an attempt by the UN's Intellectual Property Organisation to highlight "a growing awareness at every level that ideas are property like any other," according to Laurence Smith-Higgins of the UK Department of Trade and Industry's Patent Office (quoted in The Observer, 22 April 2001).

With so many new companies, technologies and organisations entering the broadcasting arena, working out who owns the rights to which aspects of a creative product, and for which medium, is never going to be simple or without conflict. Add to this the problem that older contracts often don't make provision for emerging media (which did not exist when contracts were written), and you could be in for a rough ride.

John Enser, of legal firm Olswang, cites the example of a company whose plans to exploit the video-on-demand rights to their content were thwarted by the discovery that the rights had already been given away to both a terrestrial broadcaster and a major distributor. The case illustrates the importance of specifying exactly what people are permitted to do with your content in all contracts.

Another well-known example of new technology leading to disputes over rights ownership is that of singer Peggy Lee, who successfully sued Disney for royalties from the video of The Lady And the Tramp on the grounds that her 1950s contract relating to 'phonographic records' applied equally to VHS video tapes.

Enser believes that it's even more important to be prepared for such eventualities in the digital age, when there are so many more links in the distribution chain. A project like Big Brother 2, for example, involves a range of companies, including Endemol, Channel 4, E4 (who will be providing live camera feeds), and Sky Digital (who demand a cut of revenues generated by their interactive voting facility).

For this reason, it is crucial to determine who has editorial control, and who will get a share of revenues, in the early stages of project development — and to record such agreements in writing. Thus if a website is to be produced for a programme, it must be decided at the beginning who is responsible for producing it, who will pay for it's construction, who will build the site, and who will maintain it once complete.

When content is produced by several companies and distributed over a range of media, the task of collecting and distributing revenues becomes a complex business. A possible solution would be to collect all additional revenue raised from cross-media applications in a single 'pot', and then divide it among all those with a share of the rights, according to the terms of their contracts.

Increasingly, independent producers are asking 'what proportion of the rights can I retain?'. Companies like Celador have done well from spin-off products based on their shows, with items such as Who Wants To Be A Millionaire board games and CD-ROMs bringing in extra revenue. But broadcasters are becoming more savvy about these issues, and will be prepared to defend their current position as rights-holders aggressively, even if this means drawing heavily on the resources they have at their disposal.

The key, as always, is to 'Acquire Broadly, but Licence Narrowly', according to John Enser. In the above example, such a policy has enabled Celador to negotiate the rights to each specific use to which the Millionaire brand is put, and to partner with the most appropriate company in each case. A typical deal might involve selling the rights to a third party for a flat fee, plus a cut of the profits.

But as well as creating additional markets for content, emergent digital media can also create headaches for content owners. The global nature of IP-based media, for example, complicates the process of selling exclusive foreign rights; in the Yahoo nazi memorabilia case, expert witnesses claimed that it was only possible to prevent around 70% of internet users in a given country from accessing sites based in other countries.

An even bigger problem is that of piracy, as the furore over Napster illustrates. 'Weightless' digital media content is easily copied and distributed, and even when security measures are put in place, these are generally circumvented by hackers within a matter of weeks or even days. This, more than anything, accounts for many major content companies' reluctance to make their content available as on-demand downloads, paid for on a per-consumption basis.

In the music industry, the larger record companies are not prepared to let their 'product' loose on the internet until it can be demonstrated that the entire network is secure — something that is unlikely ever to happen. Simon Scott, of InterTrust, believes these companies are approaching the problem from the wrong direction: the solution lies not in securing the network, but in the encryption and physical protection of the content itself.

Under this model, the business rules are indivisible from the content, so that whenever your product is distributed or copied by a customer, he or she is required to pay for the privilege. This is achieved by embedding the rules of transactions within the code of the digital media product itself, and to a certain degree within the software and hardware used to read and deliver it.

Simon hopes that InterTrust's digital rights management (DRM) products, such as MetaTrust, will be widely adopted to perform this function; even if they do not succeed, however, he is adamant that the principles behind them will. MetaTrust works by incorporating the data or content you wish to sell within a heavily encrypted virtual 'box', which also governs how that content is consumed, including such variables as price, payment, and the ability to save, print and copy.

The 'box' of data can safely be sent via unsecured networks, while its contents remain protected, irrespective of how many times they are consumed. Other elements of the system include the software that gives customers access to 'boxes' of content, and a means of collecting all transaction records associated with your product in a database, while the company also employs a large team of experts who are paid to stay one step ahead of the hackers.

Such systems may also give rise to what Simon calls 'superdistribution', whereby people who had already purchased the content could sell it on to others, generating further royalties for the rights owner, plus a commission for themselves. One possible side effect might be that newly 'monetized' peer-to-peer networks give a new lease of life to pyramid sales schemes!

This is all very well for companies that are able to bypass conventional distribution channels, but for those relying on more traditional methods, the problem remains that broadcasters and distributors continue to hold all the cards. If you want your content to be shown on their channels, you still have to surrender some, if not all, of the rights. For Iain Bennett, of Prospect, this problem has very little to do with new forms of content and technology, and everything to do with the structure of the British TV industry.

Iain argues that no matter how many new platforms are introduced, every one will be controlled by large corporations if independent producers continue to allow themselves to be hired at a daily rate to make programmes, while relinquishing the rights to the content they produce.

This is an issue about the relative powerlessness of the individual compared to the bargaining power of the collective organisation. Only if all those involved in production embark on a campaign of organised, collective opposition to the status quo will they be able to challenge the clout of the BBCs, Channel 4s and Skys of this world, and thus negotiate a more equitable share of intellectual rights.

When it comes to emerging media, where relationships between producers and distributors have yet to be standardised, Iain advocates taking a pro-active stance. If contracts are unclear over who should own the website of a TV programme, take the initiative and build the site yourself. If you can prove 'proof of concept', you will have a good case for retaining the online rights.

Of course, if there's one thing the internet is good at, it's enabling disparate individuals to form networks and communicate with one another. Some producers are starting to take advantage of this, and one area where we can see changes taking place as a result is the archive clips industry.

In the past, specialist archive houses — which have bought the rights to old material — and larger production houses and broadcasters — who control vast libraries of their own content — have dominated the market for clips and old footage. Meanwhile, independent producers have amassed libraries of their own, high-quality footage, but few have had the time or resources to exploit the material commercially (or enough footage to justify doing so).

At the same time, the market for archive clips is growing, thanks to factors such as increased outlets for programming, falling production budgets (it's cheaper to buy footage than shoot it) and the current popularity of nostalgic (and inexpensive) compilation shows.

This is the picture painted by Mark Leaver, general manager of Clipsalesnow.com. Clipsalesnow.com is a relatively straightforward e-commerce business, launched in February 2001, which provides clips to programme makers. All of the clips can be viewed online before they are ordered, which helps producers to find exactly what they are looking for, and makes the research process quicker and more efficient. The footage itself is then delivered on video tape, but in the future it may be possible to download clips directly to your edit suite.

The difference between Clipsalesnow.com and other archive houses is that the company does not own the rights to many of the clips it sells; these belong to independent producers, who sell their material through Clipsalesnow.com, and pay a commission to the site on every sale made. It is one small example of how digital technologies can enable to producers to exploit their rights more effectively, and bring in additional revenue streams.

Whether or not you can advantage of such initiatives depends on the rights you have managed to retain. Clip rights have not traditionally been considered all that valuable, so while there is a good chance that broadcasters might be prepared to let you keep them, it is just as likely that you may have given them up without a fight. Yet again, this underlines the importance of identifying every potential source of income from your products — now and in the future — and ensuring that contracts specify precisely who owns what.

Ultimately, there are no easy answers to the issue of rights management, and the battle over ownership is sure to be hard fought. One thing that's for certain is that broadcasters and large corporations will do everything in their power to retain possession of all the intellectual property they can lay their hands on.

As far as producers are concerned, they don't have the right.