Opinion: Devil’s in the detail – IP sharing in today’s grabby world

Siobhan Crawford

As the industry faces an ongoing squeeze, TBI’s format guru Siobhan Crawford talks IP preservation and how to avoid losing your rights.

Shall we talk about sharing?

Sharing is caring? It is the nice thing to do, right? Not when it comes it IP. Sharing hurts. Sharing means you feel you lose your power and the reward for your hard hours of work. But, sometimes there are conditions when it is appropriate. So let’s establish some standards so that next time a distributor asks you to give away your IP to a local adaption because they changed the duration from a ‘30 to a ’45 you call them a ‘charlatan’ and run.

Just like you might learn self defence, let’s learn IP preservation!

The basics

What is IP sharing?

  1.  The ownership in the format concept (in the broadest legal definition) is shared between parties
  2. The revenue generated from exploitation of the format is shared between parties

Both can be true but also ONLY one can be true. You can agree on a revenue split (option 2) only with IP retained fully by format owner. This means the IP remains entirely within your company and a contract stipulates the terms of shared revenue plus other key details. Start here and then negotiate out.

¿Cuánto cuesta?

How much? The %? There is no standard. Every company seems to keep this quiet. And there are various types of deals.

  • To commission: The absolute floor should be 33% retained and 66% shared – that is the most extreme. And remember this is IP ownership, distribution commission will have come off the gross revenues off the top. The idea of 50/50 splits– broadcasters can (and do) ask for 50% for commissioning a paper format and paying the budget. But broadcasters commissioning directly from paper is hard work and including a local prodco means they will also want (and perhaps deserve) a piece of the IP. There is an argument to ‘map the markets’ as some broadcasters don’t require IP, some have started at 25% and are increasing their demand up to the 50% – but you have to compare this against which territories commission the most formats, who holds the most value for a commission and for the international launch of the format. Keep in mind the amount of investment you do as a format owner prior to commission can impact this negotiation, to produce more materials including trailer, pilot and full decks can mean you can retain 70% instead of 50%.
  • To boost sales: This is the US/UK model where broadcasters think they can share revenues for the fact their local commission may bump up sales…I have seen 40% demands. I refuse these, you should too. Focus on growing in Europe.
  • To co/develop content or relaunch: If you cooperate in creating a format from the start then you imagine it is 50/50 but if you come at a later stage and make valuable contributions to the format/redevelopment then negotiations begin – 60/40 is probably the ceiling here but you have to weigh the contributions and if roles reversed, would you think it was fair?

Reasons to share

This is not an exhaustive list. This is a list of scenarios that could merit some revenue share.

  • If you win a format pitch prize and you are contractually obligated.
  • If you knowingly submit to a format fund.
  • If someone pays/invests in your pilot/trailer. Note, however, that in the event of failure to commission you can buy them out or negotiate out of this contract after a reasonable period of time (it may require a first right of refusal later but at least your IP is made whole).
  • If someone sells your paper format on your behalf. During the rise of creators but not sellers, using a distributor to launch a format is effective but paper is harder to sell than commissioned, so a nominal revenue split is reasonable.
  • If a broadcaster commissions your paper format (keeping an international identity to the content) and commits to the international roll out. This means a second season is likely to be commissioned during the first season run, they keep the episodes in a good primetime/suitable slot for the whole run and promote locally/internationally with good efforts. There is no point sharing IP if a broadcaster picks up a format for their territory and makes it look so local it can’t travel. Commissioning with international intentions.
  • Co-development. You have to enter into development knowingly – you cannot help a friend and then say ‘oh I need a %’. So when you know your format is being co-developed you should expect to share the revenue. This can occur post broadcast also – if a format is broadcast in one version and then *substantially* changed with development required in another adaption then a share of IP ownership for the new version is likely to be requested but this does not mean localisation. Be really clear here what qualifies.
  • Sometimes you need talent to sell a project, this can be on-screen talent or EP credits but if they help sell the project by being attached it is likely they want a share.

Next column will be the ‘when not to share’ and contract language. So if someone asks you to ‘share’ between now and then, tell them to hold that thought!

See, it’s not just sarcasm I give you.

Siobhan Crawford is co-founder at Glow Media and has worked in the format business for almost two decades at firms including DRG, Zodiak, Banijay and Primitives

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