By Jon M. Garon
Gallagher, Callahan & Gartrell, PC
The rules for creating, marketing and distributing films derive from a host of different sources. The Academy of Motion Picture Arts and Sciences controls the rules for the Academy Awards statuette, the Oscar, while collective bargaining agreements with various trade unions require that their members participate only in projects that meet with the approved production contract terms and conditions. Some of these rules come from industry collective bargaining agreements while others come from terms and conditions of contracts that have become standardized throughout the industry. Creators of new media need to understand these norms and anticipate how to seek accommodations to achieve their goals.
In the latest round of collective bargaining agreements involving the Alliance of Motion Picture and Television Producers (“AMPTP” or “Producers”) with the various trade unions, the unions and Producers agreed to allow the existing unions jurisdiction over new media, while allowing the Producers to negotiate on a project by project basis for many of the members’ services. Among the unions involved are the Writers Guild of America (“WGA”), the Directors Guild of America (“DGA”), International Alliance of Theatrical Stage Employees (“IATSE”), the American Federation of Television and Radio Artists (“AFTRA”), and after a much delayed agreement, the Screen Actors Guild (“SAG”). As described by IATSE International President Matthew D. Loeb, “[t]his new agreement both protects members and allows new media to evolve.”
The terms provided in the WGA agreement are representative. The agreement includes a new media side letter guaranteeing payment minimums and residuals for its members. The WGA side letter differentiates residuals based on three categories of content: “New Media Productions Derivative of Dramatic Programs (other than Daytime Serials);” “New Media Productions Derivative of Comedy-Variety Programs and Daytime Serials;” and “All Other Types of Derivative New Media Productions.”
Because of the transitional nature of productions created for the Internet, the collective bargaining agreements are flexible regarding their coverage:
Coverage shall be at the Company’s option with respect to “Experimental New Media Productions.” An “Experimental New Media Production” is defined as any Original New Media Production (1) for which the actual cost of production is either: (a) $15,000 or less per minute of program material as exhibited, or (b) $300,000 or less per single production as exhibited, or (c) $500,000 or less per series of programs produced for a single order; and (2) the literary material for which has not been written under employment by, or acquired from, a “professional writer,” as that term is defined in Article 1.C.1.b. of the [Minimum Basic Collective Bargaining Agreement].
Signatory companies that make original content with a lower budget and not using protected members of the union can do so without following the collective bargaining agreement. If the budget is higher or if the writer meets the collective bargaining definition as a “professional writer,” then the WGA will try to require the Producer to pay the writer according to the motion picture provisions of the collective bargaining agreement.
Similarly, the 2009 collective bargaining agreement between SAG and AMPTP has many of the same provisions. Among the terms included in the 2009 SAG Basic Agreement were those related to new media, defined as “audiovisual entertainment programs that are made for the Internet, mobile devices or any other ‘new media’ platform known” on the date of agreement ratification. Because significant disagreement exists whether SAG and the other unions have jurisdiction over new media, the tentative compromise includes a provision that derivative works from covered productions are within SAG’s jurisdiction as well as original productions below a certain dollar threshold or using SAG members who have limited production credits. By implication, as with the WGA side letter, those productions made by AMPTP signatories to the 2009 SAG Basic Agreement which fall outside the two categories of productions would be treated by the union as covered by the theatrical motion picture provisions of the 2009 SAG Basic Agreement. The result is continued ambiguity and expectations for a difficult negotiation when the contract is revised in 2011.
Like the other unions, AFTRA extended its jurisdiction to new media under the most recent round of negotiations. In addition, AFTRA is a more significant union for video games and interactive content.
The AFTRA Interactive Media Agreement covers performers who perform primarily in interactive programs i.e., personal computers, games, arcade games, etc., as well as entertainment programming such as computer and video graphic animation and/or tape video animation that portray characters for the purposes of a microprocessor based game which be manipulated by the user.
AFTRA’s jurisdiction may be more relevant to the Internet than some of the other trade unions, however, it is unclear whether it has had much impact on forcing producers of videogames and interactive content to sign its collective bargaining agreement.
Regardless of the particular union involved, the terms of the various new media agreements provide significant payment obligations for the re-use of content created for one online project in another project. Producers willing to enter into collective bargaining agreements must be mindful of these financial obligations which will continue well past the initial time window for the online distribution. Although the unions did not achieve many of their goals during the recent collective bargaining agreement negotiations, the jurisdictional concessions over Internet media will likely prove historically critical to their continued role.
On Set Marketing and Promotion
Just as the collective bargaining agreements set out a normative rule-set for production and the payments for cast and crew, the standardized agreements common to film production companies and distributors tend to have this same effect. While the particular provisions may vary somewhat from transaction to transaction, these agreements are roughly the same throughout the industry. For producers hoping to take full advantage of the growing curatorial audience involvement, some of the standard contractual provisions could produce unanticipated problems and need to be revised to achieve the producer’s goals.
One of the most significant aspects for a film involves the intersection of social media to the promotion of that film. The modern technology proves both a benefit and bane for traditional filmmaking. Filmmakers complain that they can rarely shoot scenes in public without those scenes being recorded on cell phone cameras and posted to YouTube or other sites. As Steve Daly wrote in Sets Under Siege!, (Entertainment Weekly, June 6, 2008 at 89) “Of all the battlefronts in the spoiler wars, location shoots are the places where filmmakers and show creators feel the most exposed, the most overtly under siege and maybe the most powerless to plug leaks.”
Producers working in this environment have only a few options. They can move the scenes to indoor sets, relocate to exterior private property that is well away from public access and view, or change their marketing strategies. The change in marketing strategy may mean releasing more information about the filming during production. Better, the theory goes, to be the source of the information than to play catch-up with it. Again, Steve Daly:
Comic-book movies, a dominant genre these days, can’t set foot outside without first doing controlled photo shoots to show off the snazzy hero and villain getups that fans are anxious to see. Otherwise, the Net will be full of fuzzy, grainy amateur shots within hours of filming, and soon after that, inevitably, posts complaining that the movie looks like crap. “It directly affects PR, and drives when you release images to the public,” says [Marvel Studios production chief Kevin] Feige. “We want to be the first ones to unveil it. Not some scooper with a camera phone.”
Inevitably, film companies must learn to embrace this aspect of production marketing. The marketing of a modern movie begins well before the film is finished. New media can help. Social networking tools such as tweeting, blogging posting videos to YouTube and websites can be used to build awareness of a production and develop a following for the film. The indie cult hit The Blair Witch Project is generally credited with initiating this trend. “In 1998, a year before The Blair Witch Project was released, its creators built a bogus Web site based on the film’s plot about three missing documentary filmmakers and their found footage. Visitors fell for it hook, line and sinker, creating an urban legend and, unintentionally, the first viral marketing campaign.”
The film company should maintain a Web site with select photographs and stories that emphasize the central marketing elements of the movie. The writers, director, and producer may wish to make selective event appearances to promote those same central elements. Film companies tend to get caught up in the details of making of the movie, but marketing is about reinforcing the reasons to attend the finished film. Rather than providing a weekly update on principal photography, an e-mail newsletter should focus on reminding the core audience why the forthcoming movie will benefit their community and be worth the wait.
The challenge for producers of controlling on set marketing may come from within the production as well as from the outside. When things go wrong on the set, too many personal cameras, cell phone and other devices are at the ready to spread the gossip. Producers generally obtain legal control over information regarding their projects, as illustrated by the typical contractual provision:
21. Confidentiality; Publicity. Company shall have the exclusive right to issue and to license others to issue advertising and publicity with respect to the Picture, and Artist shall not circulate, publish, or otherwise disseminate any such advertising or publicity without Company’s prior written consent. Artist hereby grants to Company the right to issue and authorize publicity concerning Artist, and to use Artist’s name, voice, and likeness and biographical data in connection with the distribution, exhibition, advertising, and exploitation of the Picture. Without limiting the generality of the foregoing, Company may use Artist’s name, voice, and likeness provided reference is made to the Picture or the literary property or screenplay upon which the Picture is based, or any part thereof, or to Artist’s employment hereunder, and provided Artist is not represented as using or endorsing any product or service.
Despite the legal rights, however, little can be done to stop such posts. Future versions of these provisions will include language making blogs, tweets, photographs and video/film explicitly within the control of the production company. At the same time, however, building audience interest through well chosen content could build the fan base.
Just as production companies are expected to deliver hundreds of on-set publicity photographs for use by the distributor, some distributors may expect production companies to begin building an audience with on-set blogs, tweets, e-mail and posts.
Some of these posts will come from the cast and crew. Others could potentially come from the characters themselves. An interesting example of this marketing has been deployed for the Focus Features film, 9, an animated film directed by Shane Acker. Well before the film’s release, “The 9 Scientist,” the lead human character in this animated feature, began updating “his” Facebook page. According to the Facebook Statement of Rights and Responsibilities, “Facebook users provide their real names and information, and we need your help to keep it that way. … You will not provide any false personal information on Facebook, or create an account for anyone other than yourself without permission.” By the terms of the Facebook license, to run the marketing campaign used in 9, Focus Films is required to obtain Facebook’s permission. Since The 9 Scientist is clearly a fictional character describing the pre-story of the film, there is likely to be little confusion among the Facebook users. For other projects, however, the ability to use social media to generate interest in the story and to create the impression of a true life story using fictional posts is quite powerful. Producers using the technique should be cognizant of the terms of service agreements, however, if they choose to blur the lines between fact and fiction.
Marketing Control – Producer v. Distributor
The challenge for the film producer is that potential distributors may have different goals regarding the marketing of the project. If the pre-release campaign does not work, the failed marketing will add an additional impediment to the sale of the film. In essence, the independent producer needs two hits; she must bank on both the quality of the film and the quality of the campaign in order to attract distribution. If the marketing approach is successful, however, and a large following has been built for the production, then it should be less expensive to promote and therefore attract more potential distributors.
Once the production finds a distributor, the locus of control will switch to the distributor. The typical distribution agreement will require total transfer of any copyrightable material to the distributor for the term of the agreement in all media, including the Internet and all social media. Although the term “social media” and its components (such as blogs, tweets, posts, etc.) are not yet typically described in these agreements by name, the contracts utilize the concept of all media now known or hereafter created which sufficiently cover these evolving technologies.
Producers hoping to control their film’s marketing campaigns throughout distribution must be much more explicit in terms of their plans. The agreement between the producer and distributor should specify which of the companies will pay the costs of the Derivative New Media Productions and be responsible for the payment of the residual fees. The agreement should also identify which company will be posting the content and managing the content online. The distributor will expect that the producer has control over all content involving the production and media surrounding the production. As a result, blogs, tweets, websites and other material based on the content of the production which has been created by cast and crew during the shoot may be considered part of the material that the distributor acquires as part of the distribution agreement. (Comments about life on set and other personal tweets and blog entries should not be said to fall within these standard agreements. ) If the producer has allowed this material to be created by cast and crew without any control or oversight, there may be a problem between the distributor who believes the contract assigns it exclusive ownership of this ancillary content and the individual creators of the material who may not consider it to be within the scope of the employment agreements they signed.
Also important to productions utilizing social networking is the obligation to police the use of the content by third parties. While it is naïve to expect that any company can successfully remove all content from the Internet that was once lawfully posted but no longer desired, the duty to take down the company’s own material and request removal by other companies should be specified. This difficulty is one of the topics unfortunately not dealt with in the collective bargaining agreements regarding New Media Productions. The contracts provide for residuals based, at least in part, on the number of weeks particular material is posted to the Web. Such methodology ignores the viral nature of the Internet, the ability of the curatorial audience to collect and repost this content, and the diffuse control inherent in online communities. A more realistic definition would set the number of weeks as based on the producers or distributors own websites and that content which is directly under the contracting party’s control. Unions, however, may legitimately fear that this would encourage producers and distributors to actively encourage the theft of this content so that the content would be posted in a residual-free manner. At the moment, this ambiguity remains yet another potential trap for the unwary producer.
The control over the Derivative New Media Productions can create problems in other ways as well. Film distributors generally require a guarantee that the material is original. The delivery requirements for a typical film distributor will provide that “[n]either the Picture nor any part thereof has been released, distributed or exhibited theatrically, non-theatrically, by means of television or by any other medium in the Territory, nor has it been, and it will not be, banned by the censors of, or refused import permit or entry into, any part of the Territory.” If material has been distributed online, however, during the production, then that material will fail to meet the obligation that it has not been previously seen.
The best way to anticipate this problem will be for the producer to collect all the material that the production company has posted online and include that material, along with a written index, as a set of exceptions to the originality provision of the distribution agreement. A producer should not sign the distribution agreement if she knows that the production company is in breach. By adding a list of exceptions to the obligations, both parties to the agreement understand what has occurred prior to the film sale. If too much material has been distributed or if the distributor does not like the material distributed, it may lead to the distributor refusing to buy a film, but this is much better than the producer finding that she is in material breach of the agreement.
An additional wrinkle may be caused by the contractual obligation to deliver a film that meets a certain MPAA rating. The Classification and Rating Administration (“CARA”) operated under the MPAA regulates both the content of motion pictures and the trailers which are shown before films. Green Band trailers are rated “G” while Red Band trailers are rated above that, typically “R.” Historically, theatrical exhibitors would not show Red Band trailers, even before R-rated movies. Some distributors have elected to use the Internet to avoid the discomfort of the exhibitors, which is putting increased pressure on the exhibitors to allow more Red Band trailers. Other distributors, however, are not so comfortable with this strategy. Moreover, the decision to post unrated material prior to the theatrical release may run afoul of the CARA rating system and further frustrate the expectations of the distributor. Again, the danger is not in the strategy so much as adopting a strategy without a clear understanding between producer and distributor.
If the standard agreement is signed without having discussed these topics and modifying the form agreement, legal liability may attach for content the producer is using online.
Equally important, however, is the recognition that fear of this liability may lead to underutilizing the tremendous potential for audience development. To maximize the opportunity for the project, the producer and distributor must agree in advance on the curatorial audience development strategy, including the amount of material which will be posted, the various technologies to be used, and the impact such material will have on the rating process. If these steps are taken, the production will maximize its chance of building an audience.
The Never-Ending Final Cut
At the other end of a motion picture’s life cycle comes the increasingly common phenomenon of alternate cuts. Billboard reports that the practice of simultaneously releasing two or more versions of a video release began with an unrated director’s cut of The Lawnmower Man in 1992. Up until that point special edition versions of a movie were released “subsequent to [the] regular home video release.” Throughout the early 1990’s other distributors also expand the use of NC-17 or unrated versions as part of their video release. With the ability to market unrated versions of movies on the Internet, the practice has grown increasingly popular.
The continued improvement in technology will lead to an increase in the amount of editing that can be done by the filmmaker after the movie has been released. Third party software can be legally used to skip select content on a film. Though not specifically allowed under the Copyright Act, it may also be possible to add additional material and program the playback device to incorporate this new material into the version presented. Undoubtedly, if a party were to create an unauthorized version of a film with additional material, that new work would be an unauthorized derivative work, constituting copyright infringement. If instead, the new material were never added to a copy of the original work and were available only for home viewing and not for public performance, then a legitimate question remains whether or not the composite private performance is also an unauthorized derivative work.
The question may be more than theoretical. The distinction between narrative film and video games is eroding. Software exists to create composites of materials from various files on a computer hard drive or hosted on the Internet. All that remains is an innovative artist to create video mash-ups that integrate material destined for new versions of the work into the original work. If the creative artist building this model is the producer, however, the distribution agreement would need to be significantly modified. These inserts would likely be covered in the material assigned to the distributor, requiring the distributor’s acquiescence to build such an enterprise.
If the producer and distributor were both agreeable, then the use of this technology could enable the participation of the audience in creating content to be uploaded and integrated into the content already produced. Such an integration of audience content with professional content would create a new genre of material, essentially a form of motion picture fan fiction. While such a new medium would require careful negotiations with the trade unions and creators involved in the project, the potential is tremendous.
A second variant on the never-ending story is the continuation of story-lines using web-posted vignettes and other short projects created as derivative works from the original. These Derivative New Media Productions are the primary focus of the collective bargaining agreements and likely to be exploited by a growing number of production companies. These additional vignettes or webisodes may be created by the original film producer or the content owners may encourage fans to create their own related content. These producers encourage the audience to stay involved with the characters, to expand the scope of the story, and to legitimize fan fiction in a variety of media. Nonetheless, to be successful, these webisodes will still require a good deal of time, effort and creativity to be successful. The most popular of these projects will enhance the brand.
As the line between marketing and original content further erodes, producers and distributors can exploit the natural behavior of the curatorial audience to assist in content distribution. At the 2009 Comic-Con, for example, producers of the ABC television show Lost staged live-action skits to accompany the webisodes they aired at the event. The producers fully expected the panel to be filmed by news outlets and audience members and posted on YouTube and other sites across the Internet. The webisodes and live-action content engaged the live audience at the panel, which in turn deployed a powerful distribution army after the event. The goal, as the producers explained, was not to find a new audience, but to keep Lost relevant to the audience in its final season. The model highlights the importance of maintaining an affinity relationship with the audience; not merely introducing new content.
Total Engagement – Financing through the Crowdfunding Pre-Sale
In addition to the standard delivery terms which may need to be modified in order to allow social-media savvy producers to engage the curatorial audience, there is one last opportunity for the filmmakers to connect directly with their fans. Using the technique known as “crowdfunding,” a producer can pre-sell credits in the film or other goods and services in an effort to pre-finance the production.
See our column on Crowdfunding for Film for more on this financing opportunity.
This is part of a series of book excerpts from Independent Filmmaking, The Law & Business Guide for Financing, Shooting & Distributing Independent & Digital Films designed as an introduction to the many legal issues involved in the filmmaking process.