DIGITAL MEDIA DEALS
“THE BALANCE BETWEEN
PROTECTING REVENUE AND ALLOWING THE FAN BASE TO EXPRESS ITS DEVOTION IS A DELICATE ONE AND SOMETHING THAT NEEDS TO BE CAREFULLY CONSIDERED.”
rights need to be part of so many negotiations, and while everyone wants to own the data, data are only valuable if the owner has the ability to use, and intention of using, the data.
For example, if a website is aimed at women aged 25 to 44, but the data show mostly men are coming to the site, something needs to change. Tere can be tremendous value, but only if the owner understands how to use it.
rather easy to grasp. But today, does it include watching a show on an iPhone, tablet or laptop? What about Hulu or YouTube or Netflix, or any number of video-on-demand options? So many companies that own rights want to enter into short-term deals because the ways in which new media will become old media, only to replaced by newer media, seem almost endless.
Does defining terms matter? Of course it does. Defining what certain rights mean will have an impact from a payment perspective, which may mean building tiers of usage into a distribution agreement.
Te Beatles didn’t worry about digital data when they signed their first deals, but businesses and their lawyers—and most rights holders—now understand the potential value of data. One of the beauties of the Internet is the ability to quantify and qualify the audience, to be able to collect demographics and contact information. Tese
www.worldipreview.com
On a larger scale, intelligent use of data can lead to the effective implementation of variable pricing, which has tremendous possibilities in the entertainment space. For example, some sports teams at universities have stepped into this area by pricing tickets for football games based on the opponent. Michael Rothstein of
espn.com’s Wolverine Nation blog reported in July 2013 that the University of Michigan would experiment with variable pricing, with end zone tickets for a game against the University of Akron going for $65, and similar tickets to see Notre Dame going for nearly three times as much. Tis provides a great opportunity in movies, music and other entertainment verticals, and must be considered during negotiations. In 2014, the Boston Red Sox will charge more for some games, including those against the New York Yankees.
All of this, of course, revolves around fans, and that is a rather complicated relationship. Back when Te Beatles were topping the charts, it was relatively easy to maintain control of the band’s music and images. But as distribution channels have become diversified and the worldwide public can control usage of content, that dynamic has changed. Te Star Trek and Harry Potter franchises spurred a flurry of fan fiction, producing more material than Gene Roddenberry and J.K. Rowling could have ever imagined. Tis can lead to the sale of unauthorised merchandise, which puts the rights
holder in a position to determine where to draw the line. Te balance between protecting revenue and allowing the fan base to express its devotion is a delicate one and something that needs to be carefully considered.
Tere are at least three things the owner of rights wants: financial compensation, control and attribution. Defining what those three things mean will take thoughtful consideration and, as the landscape continues to shiſt, so will the guidelines, but for now there are three important considerations.
• How do you deal with the multiple distribution channels, including the vast array available online, both domestically and internationally? While it’s impossible to define all channels— more seem to be popping up every day—there needs to be clarity on what is known.
• Don’t get so worried about making a perfect deal that you fail to make a good deal. Tere’s no way to know what major shiſt lies ahead, so make the best decision based on the current situation.
• Look for shorter-term deals that allow the flexibility to adapt to new distribution channels or other significant changes.
While everyone tries to learn from mistakes, there will inevitably be stories similar to those involving Springsteen and Te Beatles. But by defining terms clearly and acknowledging the dynamic nature of the industry, rights holders are less likely to be singing the blues.
Mark Fischer is a partner at Duane Morris LLP. He can be contacted at:
mafischer@duanemorris.com
Mark A. Fischer is an intellectual property partner in the Boston office of Duane Morris LLP. His practice focuses on solving problems and making deals for clients in the creative industries, such as new media, social networking, music, and interactive entertainment, among others.
Trademarks & Brands Online
Volume 3, Issue 1
39
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