Having recently attended a symposium co-sponsored by the United States Copyright Office and the World Intellectual Property Organization on Copyright & Artificial Intelligence, Nancy noted that as AI infiltrates modern life, the effects on the content licensing industry, creators and copyright will be enormous. Read all about it here.
Nancy Wolff, Scott Sholder, Sara Gates and Elizabeth Altman collaborated on this comprehensive discussion of current copyright law: what copyright is, how it works, what can/cannot be copyrighted, how it may be managed, what are the exceptions, and how to preserve copyright protection. Also addressed is copyright infringement, litigation and enforcement. Read the chapter here.
CDAS is a founding legal adviser to the Copyright Alliance and its attorneys hold leadership positions within the Media Law Resource Center (MLRC) and ABA IP Section. CDAS lawyers are officers and trustees of the Copyright Society of the USA, have been asked to speak on copyright-related issues throughout the world, and engage in advocacy work on behalf of associations in furtherance of copyright reform. CDAS lawyers have appeared in leading copyright cases, and also provide copyright clearance review for entertainment and media clients and trademark portfolio management.
One thing is clear from Sundance 2020: the current market for documentary and quality unscripted projects is extremely strong. Among several eye-catching deals, the $10m paid by Apple to acquire the documentary “Boys State” matched the sum paid by Netflix to acquire “Knock Down the House” in 2019. Concurrently, premium cable outlets and SVOD platforms ranging from HBO, Netflix, Amazon and Hulu to new players HBO Max (scheduled to launch in May 2020), Peacock (July) and Quibi (April) are commissioning a diverse range of quality documentaries, either as one-off pictures or episodic documentary series such as “Cheer,” “McMillions,” “All or Nothing” and “Making a Murderer.”
In the context of this new exciting marketplace, some of the traditional rules have changed. What do producers need to know?
- Contemplate Flexible Formats: Given the rise of episodic content, and taking into consideration the massive amount of footage that documentary filmmakers often create, it is no surprise that there have been several examples of projects that were originally planned as one-off documentary films being reformatted into two-part documentaries or even multi-episode series. Moreover, several projects that were planned as feature documentaries have been reformatted into multiple episodes of ten minutes in order to premiere on Quibi, while other documentary projects have been developed in tandem with a tie-in series of podcasts (for instance, the “McMillions” podcast promises to allow listeners to ‘go deeper inside the story’).
Accordingly, filmmakers should try to structure their deals and negotiate their paperwork in a manner that permits some flexibility with respect to the final form of the project. It is best not to be put in the position of having to determine whether a release that was signed with respect to a “documentary motion picture” would apply to an entire episodic series, especially if the subject at hand is very high level or somewhat tricky (such a subject who withdraws cooperation with the film during the course of production).
- Make Room for Buyers: Traditionally, documentary filmmakers have often adhered to the mantra that “credits are free” when according individual credits and company credits to financiers and collaborators (meaning, that filmmakers will often offer an enhanced credit in lieu of a financial entitlement). However, the new group of premium buyers strongly disfavor logos and company credits, in part because their business is predicated on keeping viewers engaged, and they don’t want people to be discouraged by long opening credits. Accordingly, it is not uncommon to see only one company logo at the top of the production – that of the platform. Filmmakers should bear this in mind, and may want to build in contractual language stipulating that all credits are “subject to network, distributor or other licensee approval” (which has been commonplace in television for some time). Likewise, most of the newer platforms do not approve of according any kind of paid advertising credit to third parties (unless it’s a very high level celebrity-like figure), so filmmakers need to be cautious when agreeing to any such obligations.
- Where’s My Backend?: Most documentary filmmakers (and many documentary financiers) would agree that nobody is in docs for the money. With that said, there have been multiple examples of extremely successful documentaries over the past twenty years that have generated profits for filmmakers and financiers. Under the new structure, whereby the conglomerates that own most of the platforms and outlets are seeking to acquire all rights and build their IP libraries, there is usually one “buyout” payment and no backend profit participation, while other forms of “upside” such as box office bonuses are also effectively rendered moot. Filmmakers need to bear this in mind, and may need to revise their financial structures to account for this (in consultation with experienced counsel, of course).
- Remakes, Remakes, Remakes: The dirty secret of documentary acquisitions is that, at least some of the time, buyers are acquiring the documentaries in order to secure the remake and other derivative rights. The right unscripted material can be fodder for a highly successful scripted series or series of scripted motion pictures – or can be used as the basis for an unscripted series spinoff format. Indeed, circumstances have sometimes arisen where potential buyers have withdrawn their interest in a documentary when it became apparent that remake rights were not available.
Accordingly, filmmakers should pay attention to remake and derivative rights when putting together their projects. They may wish to seek to acquire life rights – or an option to acquire life rights – from subjects, although this is not always possible. They may want to consider how their collaborators and financiers participate in derivatives, if at all. And when it comes time to sell the project, filmmakers should be cognizant of the potential value of derivative rights to certain types of projects. Ultimately, for documentary filmmakers the documentary should come first – but selling remake rights can be a good way to help finance the next doc!
Amid concerns over a weak market and the impact of streamers on the independent film industry, the 2020 Sundance Film Festival closed with the exhibition of several highly anticipated films, some record-breaking sales and the upsurge of important new deal makers. See below for some key trends that emerged from this year’s festival.
Slower Initial Sales
As new buyers continue to flood the Sundance Film Festival each year, including big budget-backed streamers such as Disney Plus and Amazon Studios (which purchased the 2019 Sundance hit comedy “Late Night” starring Mindy Kaling and Emma Thompson for $13 million, to little box office success), the festival has witnessed an overall resurgence of record-setting sales. Nevertheless, opening weekend sales were largely sluggish. Unlike previous years, where multiple sales might be completed during opening weekend, the first sale this year took place four days into the festival and current sales can often take days or even weeks to resolve. Perhaps due to the lackluster commercial performance of films like “Late Night,” distributors are choosing to be more selective and are waiting to view a wider variety of projects before undertaking an expensive acquisition. Slower initial sales could also be attributed to the fact that more films are entering the festival with distributors already attached, like the documentary “Mucho Mucho Amor,” which was acquired by Netflix before the festival opened, or the popular entry “Promising Young Woman” (starring Carey Mulligan and produced by Margot Robbie), which was set up at Focus Features; consequently there are fewer projects in contention.
Genre-Based Films and Documentaries Still a Hit
Initial sales notwithstanding, this year was a big hit for documentaries. Beginning with Netflix’s pre-festival purchase of “Mucho Mucho Amor,” documentaries continued to drive sales at Sundance, perhaps even more so than in previous years. Some of the most buzzed-about films included the star-studded Taylor Swift and Hillary Clinton biopics. Most notably, Apple and A24 teamed up to acquire the Concordia Studio-produced “Boys State” for a staggering $12 million, a new sales record for documentaries at Sundance.
Another standout success was the Andy Samberg-led romantic comedy “Palm Springs,” which set a new festival sales record thanks to a $22 million deal with Neon and Hulu, dethroning the record previously held by “Birth of a Nation” by a substantial amount. The deal reportedly includes an acquisition fee of approximately $17.5 million along with a guaranteed bonus compensation, the details of which have not yet been disclosed.
There are a few possible explanations as to why these record-breaking sales were feasible in the current risk-averse climate:
- First and foremost, it’s worth noting that each of “Boys State” and “Palm Springs” was jointly purchased by a traditional distributor and an OTT streaming service (with exclusive streaming rights) – a split that reduces individual financial exposure and aligns with the existing assets of each buyer. This dual arrangement presents a fruitful venture for both theatrical distributors and streamers that could in fact establish a new business model for future sales, as discussed below.
- In an era of divisive discourse where Sundance submissions have increasingly veered into controversial topics, many of the best-selling films presented a hopeful or positive message. The non-partisan political coming-of-age story “Boys State” depicts the dramatic plot twists of contemporary politics and the importance of civic engagement. “Palm Springs” is a romantic comedy that has been widely compared to the cult classic “Groundhog Day,” a feel-good movie with wide-ranging appeal. Thus, the films offer content that is inherently less risky (indeed, some of the biggest and most successful sales in past years at Sundance were similarly genre-based, such as “The Big Sick”).
Where Does Sundance Go From Here?
What does all this mean for the future of Sundance? On the one hand, the festival’s trajectory seems somewhat uncertain. Unlike Cannes or the Toronto International Film Festival, which benefit from a larger international market, Sundance focuses primarily on small-budget independent films and documentaries, which historically have not performed well at the domestic box office. Moreover, as streamers such as Netflix continue to develop and produce original content, there is less demand for third-party content. In that respect, Sundance may begin to look more like a showcase of distribution-ready films rather than a traditional marketplace.
However, there could be a few potential developments that offer reason to be optimistic about the future of festival sales:
- Streamers Dominate the Market: Digital streaming studios continue to aggressively search for binge-worthy content that will satisfy their numerous subscribers and hopefully attract new ones. As more buyers enter the independent film market every year (with Disney Plus and HBO Max considered major new players), the appetite for content could result in heightened competition in a market that is increasingly dominated by streamers. In turn, this influx could also spur more hybrid deals between streamers and traditional distributors.
- More Hybrid Theater-to-Streaming Distribution: The rise of digital streamers may encourage a symbiotic theater-to-streaming sales model similar to that between Neon and Hulu or A24 and Apple, where traditional distributors control theatrical rights and streaming services piggyback with subsequent streaming rights. Netflix and Amazon seem inclined to focus on delivering hits quickly to their subscribers, rather than in engaging in lengthy and likely non-lucrative theater releases. For instance, Netflix’s “The Irishman” and Amazon’s “The Aeronauts,” two of the respective studios’ biggest recent releases, both had fairly limited theatrical runs prior to streaming. Since streaming services don’t necessarily measure success according to box office performance or other traditional metrics, they are less likely to be willing to invest in expensive theatrical runs and are instead focused on collecting a slate that will boost their subscriber numbers. In fact, according to Jennifer Salke and Matt Newman, heads at Amazon Studios, “Late Night” is one of the top five best performing films on Prime Video and is therefore viewed as a commercial success by the company, despite its box office revenues. Distributors that are exclusively theatrical, on the other hand, would benefit from a streamlined process where streaming rights are simultaneously negotiated and the financial risk is accordingly re-distributed, with streamers fronting a majority of the acquisition cost. (As more details of this year’s biggest sales emerge, it will be interesting to see how distributors who have teamed up share profits, if any). As a result, the bifurcated sale of theater and streaming rights seems like a commercially viable approach for current buyers. Moreover, reduced costs could allow for distributors to partake in multiple sales or even larger individual sales. For all these reasons, the joint theater/streaming sales model may become a key source of growth in festival sales.
- Potential Rise of Episodic Content: Sundance has remained a festival mainly for feature length content and has resisted embracing episodic programming compared to other markets. Nevertheless, with the continued popularity of episodic content and the potential growth of short-form content, this could rapidly change. Quibi, the short-form content mobile streaming platform, made a high-profile appearance at Sundance this year and may become yet another market disrupter following its launch in April.
Regardless of sales, Sundance continues to attract droves of industry veterans and movie enthusiasts alike. Furthermore, the festival’s reputation as a prestigious launching point for rising talent supports its ongoing relevance in the contemporary market. Nonetheless, given the unpredictable trends of the past few years and the ever-evolving digital media landscape, it will be worth keeping an eye on the direction of future Sundance sales, perhaps as an indicator of larger trends in the industry.
Imagine you’re sitting on the next big true crime hit. The nonfiction genre has ballooned in recent years across media, particularly in the podcasting space where production costs are relatively low and there are fewer gatekeepers to content distribution. Long gone are the days when the choice was among America’s Most Wanted, 20/20, Cold Case Files, and Unsolved Mysteries. The first seasons of the true crime podcast Criminal and the investigative journalism podcast Serial were released in 2014. Netflix’s first season of Making a Murderer came out in late 2015. The immediate popularity of these series was evident in their ratings, and they have been followed by rapid exponential growth in the true crime and investigative journalism entertainment space.
While true crime is often equal parts edge-of-your-seat entertainment and hard-hitting journalism, it’s important to remember that part of your job as a journalist is to stay within the bounds of the law and maintain a high level of ethical standards. Here are some tips for how to do so.
(1) Observe best journalistic practices in conducting research and
One of the easiest ways to stay on the right side of the law – most critically, to enjoy the full protection of your First Amendment right to speak freely – is to follow universal standards of ethics in journalism. If you don’t work for a large media organization that promulgates its own code of ethics, don’t worry. The Society of Professional Journalists publishes their Code of Ethics online, and several news organizations such as The New York Times also make their internal ethical guidelines available to the public.
In keeping with the high standards of journalistic ethics, here are some key suggestions (but by no means an exhaustive list) for investigating and reporting on your true crime story:
- Be careful about making promises to, or developing personal relationships with, sources. Whether a source is asking to be off the record or for anonymity, or has an expectation or implies an expectation of a quid pro quo exchange such as a favorable portrayal, making promises to sources can quickly become tricky when later reporting your story. Personal relationships do develop over the course of cultivating a source, and whether by mere appearance or in fact, these dynamics can undermine your authority on a subject and imply a bias, depending on the circumstances. In every situation, maintaining professionalism will be key.
- Don’t get involved in any formal investigation. Remember – you’re a journalist, not a member of the police force, the prosecution team, or any other public agency. Don’t offer rewards for information or make assurances to victims or families, or the public, that you will get to the bottom of it.
- There is always more than one side to a story. If you expect to make accusations against any individual or company in the final story, ask them for comment. Protect your neutrality by always giving the “other side” the opportunity to counter any allegations or defend their actions.
- Know your rights (and the legal limitations) when it comes to newsgathering. This includes access to private property, whether you can record conversations without every participant’s permission, when to disclose who you are and what you’re doing and engaging or citing anonymous sources (especially government employees), and more. These rules may vary by jurisdiction, and things can get even trickier when dealing with digital media or communications that cross state lines.
(2) Vet your material from development stage through production.
When talking about real people and actual events, especially when criminal activity is alleged, you should be wary of crossing the line in certain areas of law, such as defamation and the right to privacy, and in some instances copyright law and the right of publicity. Fact checking and legal vetting should be part of your process.
A defamation claim could arise if you make a false statement of fact about another person that injures their reputation, and you did so either negligently or with what’s known as “actual malice.” If the plaintiff is a private individual, you would only have to be negligent in making that statement, whereas if the plaintiff is a public figure you would be at fault if you made the false statement with “actual malice,” that is, knowingly or with reckless disregard for the truth.
A false light claim could also arise (depending on the jurisdiction) if you widely make a statement that portrays a person in a “false light” that would be highly offensive to a reasonable person. The statement need not necessarily be a false statement of fact, but rather, create an implication, or inference, that is not true. In some ways this type of claim is similar to defamation, and they sometimes overlap, but it technically falls within the realm of privacy law. Note that reputational damage does not generally have to be proved under a false light claim – the harm caused here is emotional distress.
You could also face a claim for the publication of private facts, which is another type of privacy violation, if you publicly disclose a private fact about an individual that is offensive to a reasonable person, and the fact is not one of legitimate public concern. Unlike defamation and false light, there’s no requirement that the disclosure of information be false either in fact or in implication; rather, this sort of claim tends to arise when private information is made public that embarrasses the individual who is the subject of the statement.
In addition, a right of publicity or misappropriation claim may arise if you use a person’s name, or identifiable features such as their likeness or voice, for commercial or other exploitative purpose. In most states, the ability to use a person’s name or likeness in expressive works such as films, books, and podcasts are protected by the First Amendment, and liability will not arise if the person’s name or likeness is also used in advertising for that expressive work provided it is truthful and therefore “incidental” to the protected expression. That said, the scope of right of publicity and misappropriation laws vary from state to state; for example, some states grant postmortem rights of publicity while others do not.
Finally, a copyright infringement claim could arise in a true crime story if you’re using third-party copyrighted materials without permission. You may need to consult an attorney for a fair use review of your podcast, in particular if the subject of your true crime story is or was an artist such as an author or musician, and you want to use their work in your story.
It’s a good idea to consult a lawyer early in the process when dealing with the type of risky subject matter typical of true crime stories, so you can avoid potentially costly or time-consuming changes later on in production. For starters, remember:
- Just because you’re covering a high-profile case receiving attention across the media, and another media company (or five or ten) said something, it doesn’t mean it’s true. You generally won’t be protected from liability for defamation merely because you’re re-releasing information or materials first published by another source.
- So too can copyright infringement liability arise from republication. Another project’s use of third-party material does not necessarily mean you’re free to use it, too.
- If you’re digging back into a cold case, tread carefully when raising new facts and allegations, even against people implicated but never charged or convicted when the trail was still hot.
Be especially careful with secondary and tertiary figures in the story – in many cases, these minor figures are the ones who complain if they are portrayed in a negative light.
(3) Be creative (but not irresponsible!) with your advertising and promotional strategies.
It’s common for ads promoting a podcast to include snippets of statements and materials from one or more episodes in the series. In the promotional context, however, editing for duration and the addition of music or other sounds and materials can change the meaning or implication of a statement. In this way, you should be careful when promoting high-risk material and you may want to consult a lawyer to separately vet all marketing and advertising.
Similarly, additional copyright issues could arise if you’re using third-party copyrighted materials in the podcast and you want to use some of those materials in advertising. Do not assume the use in an ad is likely to qualify as fair use just because the use in the episode itself may be. The same considerations in the context of the content of the podcast do not necessarily apply to advertising for the series.
Finally, be careful what you agree to when entering sponsorship or other advertising deals. If a sponsor is asking for the right to use material from your story – including the names of individuals or snippets from episodes – to cross-promote their status as an official sponsor, be careful not to grant rights to use a person’s name and likeness that you do not have. A right of publicity claim could arise if you do.
So be creative with promoting your hard-hitting story, but not so much so that you’re violating the law.
Fair use is one of the most important – and most misunderstood – concepts in the area of copyright law. It is an important concept for anyone who is using content owned by third parties – which includes anyone who livestreams gaming, creates “let’s play” videos or otherwise uses gaming assets and branding. Unfortunately, there is a lot of misinformation on the internet and thus creators are often unclear about their rights and responsibilities.
With that said, here are answers to some frequently asked questions for creators:
What is Fair Use?
Fair use is an exception to the general principle that unauthorized use of a copyrighted work is copyright infringement. Simply put, if a claim of copyright infringement is brought against a defendant, the “defendant” can try to demonstrate they made a fair use of the allegedly infringed work in order to prevail in the case.
Because fair use is a defense, only a court can say whether a particular use of copyrighted material is a “fair use.” However, experienced attorneys can provide an opinion, based on their evaluation of the use using the four-factor test (see below) and their knowledge of case law.
What are the Four Factors?
Courts look at four factors when making a fair use determination
- the purpose and character of your use
- the nature of the copyrighted work
- the amount and substantiality of the portion taken, and
- the effect of the use upon the potential market.
The application of these four factors is nuanced and often complicated, but in short, the use of a copyrighted work is not likely to be fair use if it is used for the same or a similar purpose for which it was originally intended or in advertising/marketing materials, uses a lot of the original work including its most important parts (what the courts have called “the heart of the work”), and/or is used in a manner that competes with the market for the original work. It is more likely to be fair use if the new use is “transformative” in that it comments on, critiques, or otherwise adds new meaning to the original work in some way, if only a small portion of the original work is used (i.e., only enough for the user to make their point), and if the original work is not being used to advertise or otherwise promote the new work or use. So, if a video talks about, for example, loot box mechanics or the historical treatment of race in gaming by using game clips as examples, commenting on and analyzing those clips, it is probably more likely from a legal perspective to be fair use than straight game footage.
Note, however, that there is no bright line amount of use that constitutes fair use. For example, you can never assume that “if you use less than 5%, that’s fair use” – courts have found using only a line or two of text or music to be infringing. If you are in doubt, you should speak to a lawyer.
Is Crediting Important?
It’s nice, and may be considered best practices or industry custom, but it’s generally not relevant for a legal determination of fair use.
Can’t I Use a Disclaimer?
In short, no. Those disclaimers that you see on YouTube stating “This is a fair use. No copyright infringement intended” are generally not legally relevant. There is a small chance that they could be helpful to you in determining the damages that you owe in the event that you are found to be infringing, however, because they may bear on whether your intent was “innocent” or “willful.”
What if I get a DMCA takedown notice? And if a website removes my video, do I have any recourse?
The DMCA notice and takedown process provides copyright owners with a way to request removal of their copyrighted work from a website or other internet service if they believe the use infringes their copyright. To benefit from the “safe harbor” from copyright infringement the DMCA provides ISPs, the website or platform must designate a registered agent to receive and process DMCA takedown notices. DMCA notices must include certain specific information to comply with the law, and the registered agent of the ISP has the job of reviewing and determining whether to comply with the takedown request.
An ISP, such as a platform that hosts gaming content, does not have to comply with a DMCA notice if the notice does not fully comply with the legal requirements for a takedown notice. However, if an ISP does remove content following receipt of a DMCA notice, it must also promptly notify the party that posted the video. That party then can file a counternotice if it believes the content was wrongfully taken down, for instance if the use of the copyrighted work is likely to be a fair use.
Whether you’re a platform looking to benefit from the protections of the DMCA safe harbor, or a content creator looking to correct an improper takedown of your video content, you should consult with an attorney to make sure you’re in compliance with the DMCA’s requirements, and are not taking any actions that could potentially subject you to liability down the line.
Will I Be Sued For My Videogame Videos?
This is where we have good news. Because video game publishers largely view streaming and game-related media to be helpful to their business (under the theory that exposing more people to the game will increase sales), publishers rarely bring copyright infringement lawsuits against gamers. The exceptions where publishers do bring legal action tend to arise in instances where users create new installments of games (what lawyers and courts would call “derivative works”) without authorization, insert other infringing material into games via mods, create and sell software “cheats,” or do something that is offensive in addition to being infringing (e.g., adding explicit or hateful material). In recent years, major players such as Take-Two Interactive and Epic Games have actively policed these types of infringements of their copyrighted games.
This means that it isn’t always necessary to apply the fair use analysis outlined above. However, those creators who are seeking to make heavy commercial use of game assets (other than solely streaming/YouTube video revenue) should consult with an attorney before embarking on their plans to ensure compliance with copyright law.
One of the greatest challenges in defending claims of copyright infringement in the gaming space seems to be the wildcard of the judge’s expertise and understanding of the emerging fields of gaming and streaming. A key defense strategy will inevitably involve a careful framing of the discussion, including describing how the game works, what the purpose of the video is, explaining the meaning of common terms, and the context and communities in which these activities exist online.
Moreover, everyone should keep an eye on the risk factors listed below.
What Red Flags should I be aware of?
While the use of gaming footage in the form of livestreaming and “let’s play” type videos rarely results in a claim, there are a number of uses that creators should be particularly cautious about:
- Licensed music: Any game video that features licensed popular music is more likely to cause an issue with the game creators and/or the owners of the rights in the music being used. Creators are generally fine with exhibiting those videos on YouTube (which has a blanket license with multiple labels), but uses of music in other contexts or on other sites could trigger a DMCA takedown or a copyright infringement claim.
- Choreography: Any videos that use choreography or dance moves tend to pose a higher risk. There has been a spate of recent choreography-related claims alleging that games have made unauthorized use of protected dance moves, in particular against Epic Games for the use of short animations in its game Fortnite. Choreography is probably an overlooked area (versus other areas of copyright risk) and thus it is not a fait accompli that the game publisher will have secured the rights, so a video creator could be pulled into a potential lawsuit. Obviously dance-focused games are highest risk, but other games that include “celebration dances” are also a risk. While many recent choreography-related claims have failed because copyright law does not protect simple routines or common social dances, they are nonetheless costly to defend and could become increasingly risky as the law develops in this area.
- Street Art and Tags: Videos that include any kind of pre-existing graffiti or tags, or even original designs that closely resemble a pre-existing artwork, are similarly susceptible to a copyright infringement claim. Street artists have become notorious copyright infringement plaintiffs in recent years, and like choreography, game creators may not have cleared the rights to these works. The unauthorized use of graffiti may also raise trademark and right of publicity claims, depending on the context in which the tag is used.
- Athletes and other Identifiable Real People: Any gaming footage that includes the recognizable likenesses of real people (e.g., sports games) is susceptible to a claim. This is not actually a copyright issue, but rather falls under what lawyers call “right of publicity” (i.e., a person’s exclusive right to make commercial use of their name [or alias], likeness and other identifiable features). User-generated content that inserts a real person into a game via a mod could also trigger a claim of this type, particularly from celebrities who regularly monetize their names and likenesses.
Although podcasts have been around in one form or another since the early aughts, their ubiquity and popularity has skyrocketed in recent years. Apple, Spotify, Pandora, Google, and Stitcher, among other platforms, have changed the game when it comes to distribution, variety, and access. Wildly popular programs like Serial, Pod Save America, My Favorite Murder, and The Daily have set the standard for content excellence across the news and mystery genres, while The Joe Rogan Experience, Comedy Bang! Bang!, WTF with Marc Maron, and Conan O’Brien Needs a Friend are leading the way in the comedy space.
If you want your dulcet tones to break into the digital airwaves and bring your audience information or entertainment and laughs (or maybe all three), you will of course need solid distribution and top-notch content. But you also need legal protection both for you and for your content. While podcasting may seem straightforward enough to not warrant the involvement of a lawyer, there’s more to it than you might think. Here are five things to do to protect yourself and your content when entering the world of podcasting.
- Form a Company: You may have already done this, but setting up a company, whether a corporation, partnership, or LLC, is a smart first step in becoming a content provider. Apart from tax implications (which your accountant can explain to you), the corporate form creates a shield around you to protect your personal assets from certain forms of liability (for instance, breach of contract), limiting legal exposure to the assets of the company where it can be said that the company is the liable party. The corporate form may not protect you from torts such as defamation and copyright infringement if you (intentionally or not) slip up in your individual capacity, but the company can still potentially absorb the exposure for torts it is deemed to have committed. You may also want to use a corporation or LLC to hold your intellectual property (more on IP below) or “loan out” your services as talent, which can be helpful from a financial standpoint (again, talk to your accountant). Setting up a company can be simple enough to be a DIY project but might become more complicated, requiring professional advice, depending on the arrangement you want and if you have multiple shareholders or members. But it’s generally not that expensive and could save you headaches in the long run. Once you’ve formed your company, make sure that you assign any existing contracts to the company (an attorney can help you with this as well), and that future contracts are in the name of the company – not your own name.
- Obtain Copyright and Trademark Protection: To protect your original content, you should apply to register copyrights in that content. While ideas and concepts are not copyrightable, the tangible expression of those ideas is, including scripts, sound recordings, skits or sketches, songs, and even, in some instances, individual jokes. If the content is original to you (i.e., not simply copied from someone else) and is in a “fixed” medium of expression, you can apply to register your work with the U.S. Copyright Office. The application process is more straightforward than the trademark process (discussed below) and the basic fees are reasonable; the bar to obtaining a registration is also pretty low in that “originality” for copyright purposes requires only minimal creativity, and it is far less likely that another copyright owner will challenge your application. While it may seem onerous to register each episode of a podcast – especially if you release episodes more than once a week – there are ways to potentially streamline the process and keep costs down, and copyright counsel can be helpful in this regard. Registering copyrights will also help you if your podcast one day moves into other media, such as television or a published book.
Have a clever name for your podcast? You should consider applying for a trademark registration. If you offer goods or services (including entertainment services like podcasts) using a name, logo, or short phrase as a source indicator, you may be eligible for federal trademark protection through the U.S. Patent and Trademark Office. Simply using the word, phrase, or logo “in commerce” is enough to give you some rights to enforce against infringers, but registration gives you more rights and enhanced damages if someone tries to rip off your mark. It’s important to note, though, that there are filing fees and other expenses involved in applying to register a trademark (and in maintaining a trademark once it is registered), and during the application process other trademark owners have a chance to challenge your mark if they think it is too similar to theirs. The application process is also more complex than applying to register a copyright and it is usually advisable to seek legal counsel to help ensure your mark is not “blocked” or otherwise rejected.
- Obtain Necessary Licenses, Releases, and Permissions: If you are using third-party content (playing audio clips or music, reading from a script or a book, etc.), you should make sure you have permission to do so from the owner of the copyright. Despite popular misconceptions, there is no magic percentage that you can use without consequence (e.g., 8 measures of a song, 30 seconds of a comedy bit, 5% of a book) and the question of whether something is “fair use” is complex, gray, and extremely fact sensitive. The best practice is to make sure you have a license (whether written or oral) to use content that is not exclusively yours or seek out content from royalty-free libraries or that can be used under Creative Commons licenses. And when that content includes the voice or other identifying aspect of a third party, you’ll need to get that person’s permission as well, separate from the necessary copyright permissions. A person’s voice is part of their “right of publicity” which is distinct from copyright and generally (with some exceptions) requires permission to use.
If you have guests appear on your podcast, make sure they sign an appearance release that allows you to use their names and likenesses (e.g., voices) including for commercial, advertising, and promotional purposes and that releases you from liability for the ways in which guests’ names and likenesses are used. While the best practice is to get written permission, you can also secure this consent verbally by having the guest read a brief script on air. There are special considerations when dealing with minors that are beyond the scope of this article, and in such situations, it is best to consult a lawyer familiar with minor talent.
- Vet Your Content and Read Your Contracts: Related to number 3, if you are using third-party content (assuming you have permission), you should make sure that content doesn’t infringe anyone else’s rights. Issues in the podcasting space, especially in comedy, usually arise in the context of defamation. For example, if you source a clip of another comedian’s latest standup special and that comedian makes a defamatory statement about another identifiable person, you may be liable for re-publishing that defamatory statement. The best practice is to review content before using it and consult a lawyer if you have concerns about any piece of content.
Also, if you sign any contracts, whether to acquire or license content, or for a third party to distribute or host your own content, read them before you sign them. If you sign a contract you normally are bound even if you haven’t read it, so always understand what you are signing before you put pen to paper or fingers to keyboard. When licensing third-party content, make sure you’re indemnified in case the person who provided you with the content didn’t have sufficient permission to do so, and when reviewing terms set out by hosting platforms, know who controls your RSS feed; typically, the host will control it for the period they host it, but unless your content is exclusive to one platform (for instance, Spotify), the platform should not own the stream or the content. And note that in many jurisdictions, an email agreement is considered a binding contract – so be careful what you agree to via email. Usually the best time to engage an attorney is when an offer is initially made to you – even if it takes the form of an email as opposed to a formal contract. There are obviously more issues that may arise than just these, so don’t sign away your rights unknowingly!
- Get Errors and Omissions Insurance: Many insurance companies offer E&O insurance for media and entertainment companies (such as AXIS Capital, AXA XL, QBE, and OneBeacon) and getting coverage is a smart idea particularly given how much litigation arises out of media and entertainment properties. Media insurance policies often cover copyright and trademark claims, contract claims, defamation claims, and other risks that commonly arise in the media and entertainment space. While this may seem like an unnecessary cost, especially for an individual or small business, those who make their living in media and entertainment should seriously consider it – and as the podcast business becomes more mature and sophisticated, insurance is increasingly being required in connection with certain forms of distribution.
1. AB5 Brings Uncertainty: The new California Assembly Bill 5 (AB5) became effective on January 1, 2020. Originally created to codify the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex), and to address the increase of misclassification of workers as independent contractors, the drafting of AB5 is so broad that it greatly expands the definition of “employee” in a way that potentially reclassifies most independent contractors as employees. This has huge potential repercussions for many companies doing business in California, including those in the entertainment industry (which has traditionally been extremely reliant on independent contractors), as companies may now need to provide full employment benefits to individuals previously characterized as independent contractors.
While there are certain statutory exemptions, the exemptions do not cover traditional entertainment job categories. There is currently very little guidance as to how the law will be interpreted and enforced, and how it will interact with guild rules. It is incumbent on all studios, producers, networks, and other entertainment companies to watch developments closely, and to consult with knowledgeable counsel when in doubt.
2. Continued Evolution in Streaming: The rise of streaming platforms has dominated the film and episodic programming business over the past few years. 2020 is poised to bring the most significant year of change yet, as new platforms such as HBO Max, Quibi and Peacock will join the recently launched Apple TV+ and Disney+, and incumbents such as Netflix, Hulu, and Amazon. Each of these platforms is targeting a slightly different position in the marketplace, and the economics for content producers vary on a platform-by-platform basis based on the rights and territories that each discrete platform is presently seeking to acquire.
From a deal-making perspective, it is possible that the increased competition will put pressure on platforms to offer greater transparency into the performance of their content and potentially more meaningful participation for creators in the upside of successful series and movies. Additionally, it will be interesting to see if Netflix blinks with respect to its (to date) steadfast insistence on dropping all series on an all-at-once “binge” model, given the plaudits and positive buzz that Disney+ has received for releasing episodes of The Mandolorian on a weekly basis. Finally, Quibi is a truly interesting new entrant that is planning some fascinating creative experiments with short form and interactive content, in addition to providing producers with a business model that is arguably more favorable than some of its competitors.
3. Exclusivity Reigns in Podcasting: 2019 was a year of huge growth and continued maturation for the podcast industry. Mainstream coverage of the industry expanded significantly, many major celebrity names launched podcasts for the first time, and a number of big media conglomerates entered the space or materially increased investments in their podcast divisions. The maturing of the podcast industry has had notable effects on the business side of this burgeoning medium. Participants at all levels in the value chain have started to stake a claim to ownership of, or participation in, podcast rights and revenues. Moreover, the deal-making has become much more sophisticated. Prior to 2019, the dominant podcast distribution model was very simple – make your podcast available on as many ad-supported platforms as possible, and split revenues between stakeholders (usually the creator and the production company or network) (often in a straight 50/50 configuration). This began to change during 2019 as certain companies grew and engaged more experienced representation, and entrants such as Spotify and Luminary started to lock down exclusive rights to content.
Expect the podcast content arms race to heat up in 2020, as high-profile shows and creators commit exclusively to platforms in exchange for sizeable minimum guarantees. However, platforms that offer podcasts in combination with music (such as Spotify, Apple, iHeart, and Pandora) would appear to be best positioned in the market versus pureplay podcast subscription outlets because of their existing subscriber bases and the value proposition of bundling music with podcast (and, indeed, expect 2020 to be the year of the “music podcast”).
4. Gaming Grows: As Netflix Chairman and CEO Reed Hastings famously opined, Netflix is primarily competing with Fortnite rather than with other SVOD platforms. Expect 2020 to be a huge year for gaming, with the release of several big titles (such as Cyberpunk 2077 and The Last of Us 2) being followed by the impending launch of much-anticipated new consoles Playstation 5 and Xbox Series X in the fall.
The continued growth of gaming will fuel a corresponding growth in esports and “game-adjacent content culture” – the creation, consumption and interactive fan participation in content around the culture of videogames, via platforms such as Twitch, Mixer, YouTube and Instagram. All of the next-generation gaming platforms will include built in recording and streaming capabilities allowing gamers to easily create media and engage with other users. While this arguably implicates copyright issues for rightsholders, many of the game companies have taken a permissive stance regarding streaming (and other activities, such as creating derivative works), believing it to be helpful to their business – although distributors must also be cognizant of other issues such as right of publicity.
Additionally, as discussed in a previous blog, expect a flurry of announcements during 2020 and beyond with respect to entertainment extensions of videogame properties – most notably film and TV adaptations, but also podcasts and graphic novels. A significant portion of these will probably involve the original game developers and/or publishers in a meaningful way, as rightsholders understand the importance of maintaining a strong and consistent brand across platforms.
Other sectors of the entertainment business should ignore gaming at their peril. For more, we recommend reading “7 Reasons Why Video Gaming Will Take Over” by Matthew Ball.
The videogame industry is now the most profitable individual sector of entertainment, having experienced exponential growth over the past forty years. Great games can quickly generate a large and unusually engaged fanbase, and as a result it could be argued that games will be the single biggest source of major entertainment brands for the foreseeable future. A cursory glance at Twitch reveals tens or hundreds of thousands of viewers concurrently watching streamers playing games like Fortnite, The Witcher, Sekiro, Overwatch and Grand Theft Auto. Even indie titles like Hollow Knight, Stardew Valley and Untitled Goose Game can attract thousands of attentive viewers. The potential to grow videogame properties into multi-platform entertainment franchises is greater than ever.
Historically, television and film adaptations of videogames have been critical and commercial misfires. However, the general growth of gaming, the increased sophistication of storytelling in videogames, and the general demand for IP-based content (driven in part by the emergence of multiple new streaming platforms) has created a perfect storm. Accordingly, we are currently seeing more videogame adaptation deals than ever before, some of which are very complicated and extremely high level.
While the fundamental structure of acquisition or licensing deals for videogame properties is similar to that used when acquiring older forms of media such as books and articles, there are some specific considerations when dealing with videogame properties, some of which are listed below. It is strongly recommended that parties on both sides of the negotiation engage an attorney and/or agent who is familiar with both the film or TV (as applicable) and videogame businesses to negotiate the deal. It will be very difficult to close a deal without an understanding of the gaming world and what motivates its rightsholders.
- What is the “Property”? : Up until recently, it was relatively easy to define what a “game” was. Games came on disc, cassette, cartridge or CD sold as physical products through brick and mortar retailers for a one-time payment. Successful games yielded sequels and spinoffs (and sometimes “add ons”), but games were generally released in a fixed form. With the emergence of digital distribution and the concept of “games as a service,” that has gone out of the window. Games are now routinely and regularly patched, updated, supplemented and expanded via a combination of free and paid downloadable content (or “DLC”). For example, the game No Man’s Sky has been updated and expanded so comprehensively since its launch in 2016 that it is almost unrecognizable as an experience from the version released at launch. As a result, it is imperative that buyers understand what they are acquiring – and unless negotiated otherwise for a very specific reason, the “Property” that is granted to the buyer should include all elements, versions, expansions and content relating to a title, for as long as such title is supported. Ideally, all sequels and spinoff games would be included in the rights grant as well (but that is a more nuanced subject that may require some discussion).
- Investigate Third Party Interests: While other forms of properties (including novels and podcasts) can have complicated chain-of-title issues, videogames are particularly likely to have unforeseen ownership and/or approval issues complicating the acquisition process. Often the rights in the game may be owned and controlled by a publisher, but sometimes the actual creator or developer may have approval rights or other interests that need to be addressed. Things get even more complicated when dealing with Japanese properties, where there may be one or more intermediaries to deal with before one is able to negotiate directly with the rightsholder. It is important to ask the right questions at the very start of negotiations to be able to identify and address any specific issues.
- Discuss Controls and Approvals: While television and (particularly) film producers often view their medium as the pinnacle of artforms, it is important for producers to understand that – in many circumstances – a videogame publisher or developer does not need them. Many videogame rightsholders make millions or billions of dollars solely from videogame sales, which can then be supplemented through the sale of DLC and merchandise. Even independent developers may be able to make a good living through a combination of the right business model and smart engagement with their fanbase. As a result, rightsholders will often be extremely cautious about entering into any kind of arrangement that could tarnish or dilute their brands. No sophisticated rightsholder today would agree to the kind of agreement that yielded the likes of Super Mario Bros. (1993), Street Fighter (1994), BloodRayne (2006) or Tekken (2009), all of which were critically lambasted and bore little relation to their source material.
Indeed, many videogame rightsholders are unlikely to be prepared to enter into a traditional option purchase type arrangement where they are viewed as passive rightsholders without any kind of active involvement or approval. Producers therefore need to think carefully and walk a tightrope to ensure that they make the rightsholder feel invested and comfortable, without ceding control in a manner that could jeopardize their ability to set up and produce the project. Of course, if they can strike the right balance then the dividends – both creative and financial – could be spectacular.
As we head into the new year, the CDAS Digital Media and Technology group would like to remind you about new developments in privacy law that might affect your business.
Greater Transparency and Access Under New California Consumer Privacy Act (CCPA)
Taking effect on January 1, 2020, the new California Consumer Privacy Protection Act requires businesses, both inside and outside California, to provide increased transparency and access regarding their collection and monetization of personal data from California residents. Companies that, on an annual basis, have gross revenues of at least $25 million, obtain personal information of at least 50,000 California residents, households, and/or devices, or generate at least half of its revenue from selling California residents’ personal information must disclose data collection practices to Californians upon both request and collection, delete personal information about a consumer upon request, provide consumers the opportunity to opt out of the sale of personal information, and comply with certain data security procedures or else face lawsuits from those consumers subject to a data breach. Non-compliant companies are subject to fines of $2,500 per violation and up to $7,500 for each “intentional violation,” as well as damages in a possible consumer data breach lawsuit. If you believe CCPA might apply to your business now or at any point in the future, contact our team for a briefing on compliance.
EU Court of Justice: Active Consent Required for Cookie Collection from EU Citizens
New York is Next
This summer, New York passed the Stop Hacks and Improve Electronic Data Security Act (SHIELD Act), which requires companies that buy or license New York residents’ private information to develop, implement, and maintain reasonable physical, technical, and administrative safeguards to better protect the security, confidentiality, and integrity of personal information. Based on the passage of the SHIELD Act, privacy lawyers and policy experts alike anticipate a robust data privacy law will be enacted in New York similar to CCPA. The New York State Senate is currently considering the New York Privacy Act (SB S5642), which would regulate the storage, use, disclosure, and sale of consumer personal data by businesses operating or marketing products and services in New York by requiring companies to “act in the best interests of the consumer without regard to the interest of the entity, controller or data broker” and provide their consumers with a “clear, meaningful privacy notice” and an opportunity to opt in or out opt of providing personal data. Companies that fail to comply would be subject to enforcement actions by the New York Attorney General under deceptive trade practices and unfair competition laws. Most recently, the bill was discussed in committee; stay tuned for further updates from CDAS as this legislation progresses.
CDAS counsels businesses on data privacy regulations and best practices and can provide guidance and strategy on how to comply with CCPA or GDPR. Contact our Digital Media and Technology group for a compliance evaluation and advice on best practices.