Know Your Rights - Part 1

By Stephen Swalsky, PactUS Expert

The television world is evolving, and not necessarily for the benefit of content creators.   The old TV model was not complex; your production company created a project that competed essentially in a closed environment against the programming in your time-slot on competitive networks.  However, with multiple channels competing not only with each other but also against their own older content on video on demand, YouTube and other arising content providers on a host of platforms, the traditional subscriber and advertising dollars needed to fund new projects are just not making it to the hands of producers.  Your project now competes against any and every show that was ever made. That’s not to say that network funding has completely gone away. Buyers are simply insisting that in a world of lowered ratings, where numbers that used to get a project pink-slipped are now justifying self-congratulatory press releases, the networks claim that they need to reduce budgets and in turn, are demanding that production companies do more with less.  I hear it plenty from production companies that their margins are unbelievably tight.  The time is now to secure the rights you truly need to achieve the best return on your creations.  In parts 1 and 2, I examine some ways for you to maintain and regain leverage.

Ways to Push Back

There are ways for you and your company to even the playing field a bit.  By potentially holding on to certain rights and creating a “library” that you can monetize outside of the traditional full basket of rights ceded to a network when you sell your project, you may be able to create a commodity that you can further exploit to (re)fill your coffers.

While I don’t intend to make this overview an exhaustive “A to Z” guide (indeed, each of these is worthy of a book chapter), there are meaningful ways for you to have some leverage in your struggle to hold rights that may be better utilized by you, rather than a network.

To the extent possible, pitch a project that is “turnkey”.

The days of walking in the door of a network with just an idea, basic paper development and hoping for the best during development are over.  Over the last several years, productions companies have been upping their game by adding flash and by extension, value, to their pitch materials and as a result, networks now expect to see a polished and refined sizzle reel with production values that far exceed what they would have likely granted you in a budget.  If possible, and being cognizant of some added risks, spend the money in advance and walk in the door with a fully-fleshed out project.  I completely understand that not all production companies are in a position to spend money they do not have or have the stomach for the perils of rejection.  Spending time, effort and money in advance of a sale to make your projective stand out will bring its own set of risks.  Obviously, there is no guarantee that your project will sell. There is also some concern that if a project is too far along, network executives will not be able to give notes to refine the project to their liking.  But if you have faith in your project and are comfortable doing the work with the potential of no reward and can bring the project to the “next level” and come in with a ready-made enhanced presentation or even a pilot, you can turn the negotiations in your favor when demanding to hold on to rights.  I get that not every company has the funds in their war-chest to spend on something that may not even sell, but the more fully formed a project is, the more leverage you will have in retaining rights such as format, foreign syndication,  controlling the project as a license vs. “work for hire”, etc.  If you have a project that is unique (which is seemingly an uphill battle now) and/or have unprecedented access to an unknown and previously unseen world, the more effort that you put in now to making the project viable will enable you to reap the rewards in the short and in the long term replenishment of your coffers.  Ultimately, it has been my experience that going the extra mile has been worth the work. 

Pre-sell rights before pitching – use the power of PactUS

While it is perhaps a bit of putting that proverbial cart before the horse, it works to your advantage to put out overtures to sell the format and syndication rights to your project in territories outside of the United States in advance of pitching in the domestic market.   Your membership in PactUS brings the power of PactUS in working with you to know the key markets, buyers and niches to find additional value for you.  PactUS will help you in educating yourself on the foreign buyers and help you find the firepower of the backing of a strong and well-known international distributor to take your prospective title to market.    PactUS also knows new players such as “TheRightsXChange” (TRX) who have recently entered the marketplace as a digital rights trading platform that allows buyers and sellers to transact online and can help you find a buyer for part of your project rights that you may not have known even existed.  Some networks, especially in basic cable, knowing full well the squeeze that they have been putting on production companies, have started in baby steps to retreat from their standard of absolute insistence on full ownership of all rights in projects in all territories.  Bear in mind that “BrandX” cable network has similarly branded sibling networks throughout the world and may have obligations to providing guaranteed minimum hours of programming for them.  The US broadcast networks typically do not have such strictures built in and as a result, are definitely more open to the notion of giving up on rights that are frankly, an afterthought to them.  Taking only what they truly need and in line with reduced abilities to spend has brought a bit more balance to the usual buyer and seller relationships.  Take advantage of your PactUS membership to help cushion against the inevitable demand from US nets to “do more with less”.

Ultimately, you still need to have the right project to pique the interests of buyers and to create any leverage for you to keep the upper-hand in retaining rights for you and your production company.  In an evolving marketplace, the smart production companies, and the realistic networks, are realizing what rights to fight for and which to let go.  This is where PactUS can help you.  With proper planning, knowledge and strong negotiating, you can maintain the rights that you are able to optimally exploit, especially if you can show that it leads to profits to be shared by all.  There is no need to adhere to the networks’ antiquated approach of “if it exists, I want it”, which in this new era often leads to a library of titles and rights gathering dust.

In part 2 of “Know Your Rights” (posting next week!), I will look at some other strategic ways for you to walk in the door as a negotiating equal, including  establishing your project as a pre-existing format, pushing hard for expanded reversion rights and knowing where you can tap into ancillary revenue.