This is part of a series of book excerpts from The Independent Filmmaker’s Law and Business Guide: Financing, Shooting, and Distributing Independent and Digital Films
designed to introduce filmmakers and others interested in creating content on the legal issues involved in the filmmaking process.
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.
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.
* Jon Garon is admitted in New Hampshire, California and Minnesota.
Adapted from The Independent Filmmaker’s Law and Business Guide: Financing, Shooting, and Distributing Independent and Digital Films, A Capella Books (2d Ed. 2009) (reprinted with permission). Jon Garon is professor of law, Hamline University School of Law; of counsel, Gallagher, Callahan & Gartrell.