This post originally was written for the Sundance Artists Services initiative by our co author Orly Ravid.
There is no standard yet for definitions of digital rights. IFTA (formerly known as AFMA) has its rights definitions and for that organization’s signatories there is therefore a standard. But many distributors use their own contracts with a range of definitions that do not all match up. And the same is true of digital platforms.
When analyzing distribution options, recognize that terms such as VOD can mean different things to different people and include more or fewer distribution rights and govern more or fewer platforms. And what’s more is that what is left undefined may be then generally lumped in to a broad category and that can be problematic.
Consider the term “VOD”. In some contracts it’s not even explicitly defined and hence can mean anything and everything if one wants to argue. IFTA is clear to categorize it as a PayPerView Right (Demand View Right) and limit it to: “transmission by means of encoded signal for television reception in homes and similar living spaces where a charge is made to the viewer for the rights to use a decoding device to view the Motion Picture at a time selected by the viewer for each viewing”.
However in some contracts, it’s defined as “Video-on-Demand Rights,” meaning a function or service distributed and/or made available to a viewer by any and all means of transmission, telecommunication, and/or network system(s) whether now known or hereafter devised (including, without limitation, television, cable, satellite, wire, fiber, radio communication signal, internet, intranet, or other means of electronic delivery and whether employing analogue and/or digital technologies and whether encrypted or encoded) whereby the viewer is using information storage, retrieval and management techniques capable of accessing, selecting, downloading (whether temporarily or permanently) and viewing programming whether on a per program/movie basis or as a package of programs/movies) at a time selected by the viewer, in his/her discretion whether or not the transmission is scheduled by the operator(s)/provider(s), and whether or not a fee is paid by the viewer for such function/service to view on the screen of a television receiver, computer, handheld device or other receiving device (fixed or mobile) of any type whether now known or hereafter devised. Video-on-Demand includes without limitation Near VOD (“NVOD”,) Subscription Video-on-Demand (“SVOD”,) “Download to burn”, “Download to Own”, “Electronic Sell Through” and “Electronic Rental,” for example. This example includes everything and your kitchen sink.
One has to ask oneself if a definition of VOD or another type of digital right includes “SVOD” which is subscription Video on Demand and includes subscription services such as Netflix and Hulu Plus. Why does this matter you ask? Well if the fee to the distributor and/or to you is the same either way then it may not matter. If there’s a difference in fees depending on the nature of distribution then it will.
Also, for example, a contract notes they have “VOD Rights” but does not define them, or defines them broadly, the question is, do they have mobile phone
rights or not? The words “Video-on-Demand” sometimes are used only to refer to Cable Video on Demand and other times much more generally. In a “TV Everywhere” (and hence film everywhere) multi-platform all-device playable universe one needs to know what one is licensing to whom
1. because one does not want to inadvertently be in breach of contract,
2. one does not want to lose opportunities for best distribution,
3. one does not want to give rights away for disadvantageous terms especially if there are different fees for different categories of rights/distribution.
One can split rights based on mode of delivery (e.g. download-to-own (e.g iTunes) vs. Ad-supported streaming (e.g SNAG) or based on payment method too — like SVOD (Subscription Video on Demand) vs. FVOD (Free Video-on-Demand), which can refer to ad-supported content that generates some revenue, or just plain old free).
A NETFLIX SVOD license for example is a fee for a time. The Fee is determined by the demand in the system. Not the same sort of transaction as Cable VOD which is rev/share based on transactions and Cable VOD involves numerous operators although just a couple of middle companies servicing the primaries. Still, some aggregators and distributors charge different fees for different classes of digital distribution and that can be for very good reason. The work is different and so is the revenue.
Recently, I dealt with a contract that had one definition for VOD and another for Video-on-Demand! Go figure.
I ask you: How does one classify an iPhone App that offers in-App purchase downloads? Are they mobile rights? Digital-download-to-own rights? Does the term VOD rights encompass them? Ask three people you might get 3 answers. So the devil is in the definition which you must read carefully BEFORE you sign on the dotted
line. Don’t rely just on definitions, know what you want for and can do for your film in terms of distribution and carve it up and spell it out.
For example, you may be doing a broadcast deal that prohibits “mobile wireless” distribution (at least for a time) but you’ll at least want to make sure you’ll allowed to do a Netflix SVOD deal (hopefully) that will entail the film being available on mobile devices and the broadcaster may allow this if you argue for it (as long as the film is not streaming for free to non-subscribers). (Of course some broadcast deals don’t allow for a Netflix SVOD deal at all but that’s another matter entirely).
Perhaps your film has an iPhone App and the film is available for in-App purchase. That too should be allowed and not be prohibited by a holdback against “mobile wireless” because this form of distribution is no different than DVD or digital-download-to-own in terms of revenue model. Only the mode of delivery and exhibition is different. And further to this point, the last thing you want to do is have all digital be lumped under the term “VOD” or “Video on Demand” without realizing what’s happening.
Not all films have the same revenue potentials or work the same way on all platforms. Know your film, know its audience and their film consumption habits, know its potential, and above all, be sure to know how any and all rights are defined, classified and accounted for and analyze that in relation to the realistic potential for your film. Ask if a company deals directly with the platforms that are key for you and find out their terms with these platforms. Remember, platforms are like stores, so if we were talking about DVD, you’d probably be tempted get your film into Walmart — but that may or may not be possible, and it may or may not even be the place where people who want to see your film are most likely to shop.
Not all films perform well on Comcast, for example. These days Netflix revenue is bigger for many films than many other platforms, and still that may change. Since the launch of the iPad, download-to-rent (DTR) is growing and is anticipated to grow further.
The question is: Do you know who has those rights and how they are handling them and accounting to you for them? You should.
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