IPR WITH RESPECT TO OTT PLATFORM

From Script to Screen: What Role for Intellectual Property?

We all love movies. They excite, thrill and entertain us like no other art form. Filmmaking is a complex
undertaking involving many different players. But where does intellectual property fit into the picture?
The answer is – everywhere! IP rights shape each stage of the film-maker’s journey from script to screen (see
From Script to Screen: The Importance of Rights Documentation in the Distribution of Films PDF, From Script
to Screen: the Importance of Rights Documentation in the Distribution of Films). They help producers attract
the funds needed to get a film project off the ground; enable directors, screenwriters and actors, as well as the
many artists and technicians who work behind the scenes, to earn a living; and spur the technological
innovations that push the boundaries of creativity and make the seemingly impossible, possible.
It starts with the script
The journey begins with the search for a good story or script. Ideally, the producer will find a script that is ready
to shoot, but usually the services of a professional screenwriter are required to create the screenplay. A script
can be a new work, or based on an existing work, such as a novel, a play or a comic book.
The script itself is always considered an original creation to which IP rights are attached. The producer typically
hires a script writer to produce a short narrative canvas for the film and a first draft; the agreement may also
specify any further drafts, re-writes or polishes that are expected for agreed fees. The legal status of the writer’s
contract varies according to prevailing copyright and related rights legislation.
If the movie is an adaptation of an existing work, the producer will conclude an option agreement to secure the
right to use this material before going forward. An option agreement states that the owner of the underlying
work – a script, book, article or short story – agrees to grant to the producer, for a specified period, the right to
produce a film.
If the film is made (and the option is exercised) then the copyright owner is paid an agreed fee for the ongoing
right to use the work in the film. A rights purchase agreement is usually also negotiated at the same time
outlining the terms for securing rights to the screenplay, TV rights and the right to release in ancillary markets
such as home video and new media.
An experienced producer will seek to acquire as many rights as possible to optimize profitability and to have a
free hand in making a sequel, for example. The original copyright owner, on the other hand, will endeavor to
reserve certain rights such as publication rights, stage rights, radio rights, rights to characters (should he or she
wish to write a sequel). Detailed rights purchase agreements help avoid unforeseen legal problems further down
the road.
Securing funds
When it comes to securing the necessary funds to produce a film, these IP rights supported by clear chain of title
documentation are by far the most valuable assets the producer holds. Without a clear chain of title, the sale of a
film property can become very difficult, if not impossible. Having an agreement with a well-known
screenwriter, actor or director can significantly enhance the chances of finding the backing to bankroll the film’s
production and distribution.
It also falls to the producer to identify the right director for a film project and to negotiate a director’s
agreement. Such agreements cover a range of issues and, depending on the jurisdiction, the director can be
identified as an author and joint owner of a film with corresponding rights; as an employee and paid a salary; or
as both. Directors also often receive royalties from film distribution and may in certain jurisdictions, such as in
France, be in a position to negotiate a “final cut” provision – which allows the director to decide on the final
version of a film shown in cinemas – as an integral part of their moral rights.
Protecting actors' rights
Similarly, the producer will negotiate agreements with actors and performers. These can be complex and
sensitive as they blend IP-related issues – such as the transfer of rights to the producer – and conditions of
employment.
The legal status of actors varies from one country to another. Some countries grant actors a comprehensive set
of so-called related rights (see Understanding Copyright and Related Rights PDF, Understand Copyright and
Related Rights). In many other countries, however, actors are hired to work on film sets as employees and have
little or no bargaining power to negotiate favorable contractual terms of remuneration (see Managing
performers' rights: the role of contracts).
After the film has been shot it goes to the editing room where the scenes are selected, usually by the film editor,
director and composer, to make the best or final cut of the movie. Once the film is ready for public viewing, the
importance of IP rights to the movie business is again prominent.
Distribution deals
Only with a clear chain of title documentation (proving ownership of underlying rights in a work) can a
producer have any success in securing deals with distributors. Producers enter into agreements with distributors
against remuneration and the promise of the film’s distribution to key markets. There is no such thing as a
standard distribution deal. A producer may be dealing with an integrated company that can release the film in
local cinemas, in VCD or DVD formats, or license it to local TV stations or sell it to foreigner buyers at film
festivals. Or, he may be dealing with different distributors operating in different market segments, e.g. cinema
and video, and have to license rights separately.
Distribution agreements generally contain clauses that ensure the distributor has the legal right to make certain
changes to the film for the purposes of distribution. These may include changes to the title, cuts designed to
comply with film classification/censorship requirements, dubbing and sub-titling, etc.
Every distributor will incur marketing costs to give the film its best chance in the marketplace. The producer
will endeavor to secure a sufficient level of commitment on the part of the distributor to promote the film. He or
she may also seek to negotiate consultation rights over the shape and direction of the marketing campaign.
The number and type of IP-related agreements that can arise in the process of making a film are as varied as
they are numerous. With so many elements to consider and rights to clear, film-makers often purchase errors
and omissions (E&O) insurance in the event of any problems relating to the acquisition of rights.
Trademarks and merchandizing
Trademarks also feature prominently in films. Like other businesses, movie studios use trademarks to create a
distinctive identity and to stand out in a crowded market place - from the broad appeal of 20th Century Fox and
the more idiosyncratic approach of its sister company, Fox Searchlight, to animation icon, Pixar, and family-
friendly Disney.
A movie title can also be protected as a trademark, e.g. Star Wars, as well as key characters and film elements
such as James Bond, 007, Harry Potter and the Simpsons. Registering these film elements as trademarks can
open the door to lucrative licensing and merchandizing agreements that can help defray costs of production and
film promotion.
Walt Disney was perhaps the first to demonstrate the potential for generating ancillary income (i.e. beyond
theatrical releases) from movies and their characters. Mickey Mouse, the most recognizable cartoon character in
the world, was registered as a trademark back in 1928. By 2010, the iconic Disney mascot had clocked up
global retail sales worth US$9 billion and continues to show strong growth potential.
Star Wars is another remarkable example of movie merchandizing. Following its original release in 1977, Star
Wars was followed by another five blockbuster films spawning a highly lucrative market for Star Wars
collectibles (from action figures to laser sabers, key chains and books) worth billions. Star Wars has become an
enduring cult phenomenon, a trend that is set to continue with filming to begin on Star Wars VII later this year.
Product placement
Another high value proposition for filmmakers and businesses is product placement – where branded products
(bearing a trademark) are woven into the storyline of a movie. The earliest example of product placement dates
from the movie Wings in 1929, which featured Hershey’s chocolate.
With the widespread uptake of digital technologies which enable viewers to zap adverts, many companies now
see product placement as a more affordable and effective means of reaching consumers. For the movie industry,
it is a useful means of off-setting production and promotional costs.
In their deal with Heineken - reported to be worth an estimated US$45 million - the producers of the latest Bond
movie, Skyfall (2010) covered almost one-third of the film’s production costs. Product placement has been
present in Bond movies, one of the world’s most successful movie franchises, since the 1960s. A report by
Business Insider lists the full range of product placements featured in Bond movies over the years. The value of
product tie-ins is such that some studios even write them into the script before the film actually goes into
production.
Product placement has been present in Bond movies, one of the world’s most successful movie franchises, since
the 1960s. The Z8, a production variant of the 1997 Z07 concept car, designed by Henrik Fisker at BMW's
Designworks USA, featured in the James Bond film The World Is Not Enough (1999) and in the games James
Bond 007: Agent Under Fire and 007 Racing. (Photo: Jimmy Baikovicius [CC-BY-SA 2.0]).
Technical innovation
A great deal of technical equipment is used to make a movie – the camera itself as well as equipment for
lighting, editing, sound and special effects. Innovation is a hallmark of the industry. Throughout its history,
ingenious minds have sought new, improved ways to push the boundaries of possibility. Many of these
technological breakthroughs are protected by patents.
Since Thomas Edison and the Lumière Brothers brought movies to the masses, the industry has undergone huge
technological shifts. The golden era of silent movies gave way to “talkies” which gave new importance to
dialogue and acting and in turn spawned new film genres. The invention of Technicolor (invented in 1916 and
perfected over several decades) gave movies a more realistic feel and the use of ever-more innovative, high
performance sound systems, from Warner Brothers’ Vitaphone (used to make the first feature length talkie, The
Jazz Singer in 1927) to Dolby Surround Sound (first introduced in 1982) has heightened the movie experience.
Throughout the history of the film industry, ingenious minds have sought new, improved ways to push the
boundaries of possibility. Spanish film director Segundo de Chomón is believed to have been the first person to
put a camera on wheels back in 1907. This deceptively simple step has had a huge impact on filmmaking. The
“camera dolly”, a camera platform on wheels helps create smooth tracking shots, even with heavy, unwieldy
equipment. (Photo: Dan Eckert [CC-BY-2.0]).
Digital technologies – shaping the future of film
The more recent move from celluloid to digital has had an enormous impact on the industry, improving quality
while slashing production costs and time and lowering entry barriers for amateur and budget filmmakers.
Digital technologies have also opened up huge opportunities for special effects, fuelling the growth of science
fiction and fantasy movies. With digital technology, film-makers now have the tools to the visually depict the
imaginary worlds their characters explore.
The first movie to feature computer generated imagery (CGI), was the sci-fi film, Westerworld in 1973. Pixar
produced the first feature-length, computer-animated film, Toy Story, in 1995; and in 2009 Slumdog Millionaire
became the first film shot mostly in digital to win the Academy Award for Best Cinematography. That same
year, James Cameron’s Avatar broke new ground; filmed in “stereoscopic 3D”, it created a stunning and
seamless blend of live action and CGI imagery using revolutionary new motion-capture techniques.
The widespread use and application of digital technologies, including the Internet, are profoundly shaping the
industry, in terms of how movies are being consumed and distributed (video streaming and downloading) and
even made. The digital era is certainly fuelling our universal passion for movies.
OTT in India is poised to grow at a high rate. India accounts for 81% of the pay TV and OTT subscriber base
among SAARC countries, according to a Dataxis report. This amounts to an estimated Indian market of $15
billion. It is a relatively new technology in the Indian market and can facilitate socioeconomic inclusion through
new digital applications. There are huge consumer benefits and hence these should be positively encouraged.
Policy clarity in this area is essential for the expeditious achievement of Broadband for All and the creation of a
Digital India.
In India, the broadcaster commissions a show produced by a production house. When the broadcaster signs a
contract with the production house, a fee is agreed upon which the channel is bound to pay irrespective of how
the show performs. As a return for the risk involved, the channel gets to own the IPR for the content. This
means that the channel can later license the show to other international markets, dub it in other languages and
air it on regional channels, make deals with airlines or any content acquiring platforms. In India, as a result of
owning the IPR, broadcasters get to stream it on their own OTT platforms. In some cases, broadcasters even
license content to an international streaming platform.
With growing digitalisation, there has been a growth in revenue streams and transparency. Hence, IP owners
stand to gain from long term monetisation. Strategically, it is good to create and own IP. Owning IPR opens up
many avenues for revenue.
Owning IPR is a decision driven by finances. “At this stage, broadcasters are taking all the risks; producers
create the show and before the show gets any feedback, they have already profited. IP creation and retention is
about conviction, and taking both the upside and downside.” Furthermore, the content business involves high
risks, with only 25% of content tasting major success according to experts. So, if producers want to retain IPRs
and are willing to share risks, broadcasters will save a lot of money which they can invest in developing
concepts and creating original Ips.
The Registrar of Copyrights recently invited comments from industry stakeholders on amending the Copyright
Act 1957, recognising that creative “industries are performing and evolving in the light of changes brought
about by use of internet, digitalisation and an increasingly globalised market for digital content”. This
development provides India an opportunity to realign its priorities for creation and distribution of creative
content online, under a durable legal framework.
India’s content consumption is moving online at a steady pace. About 95 per cent of Indian consumers listen to
music via on-demand streaming, according to the Music Consumer Insight Report, 2018 released by the
International Federation of the Phonographic Industry. Consumers are also warming up to OTT platforms as a
means to access films and television series. A FICCI-EY report on Media & Entertainment in 2020 notes that
subscription to OTT platforms doubled in 2019. Their contribution to total digital segment revenues increased
from 3.3 per cent in 2017 to 13 per cent in the same year. Wide internet penetration, low data prices, and a
proliferation of smartphone users are responsible for this shift in consumer behaviour. The Covid-19 pandemic
has made the shift to digital an imperative, and has rekindled numerous debates on copyright on the internet.