What is Video Licensing Agreement?
Video Licensing Agreements are contracts to give legal permission to third-parties to use or distribute your audiovisual multimedia content including footage, movies, videos, webcasts, and films. Proper video licensing agreements for audiovisual multimedia material should include ownership information, exclusivity rights, payment and compensation terms, rights of audit and proper indemnities. While content creators can simply provide their standard video licensing contract template on their website, it is crucial that third-parties understand what conditions apply to the use of their audiovisual multimedia materials.
When a third-party wants to license a video, it is important for them to understand that the license is only for the specific purpose contained within the agreement. It is not a blanket license for anyone to do anything with the audiovisual multimedia material. In fact, many third-parties try to use licensed material for multiple purposes (that does not appear in the licensing agreement) and assume that since you have a legal video licensing contract, that gives them the right to use the content for those other purposes. However, video licensing agreements are strictly for the legal use of the specific audiovisual multimedia materials for the specific purposes of the contract.
It is also important to understand that the person or third-party that receives audiovisual multimedia material does not get ownership of the material . Any video licensing agreements have provisions that clearly state that all rights remain with the licensor (the person or organization creating the audiovisual multimedia material). This provision is universally stated in video licensing agreements so that ownership is granted to no one other than the creator of the material.
Since these are legally binding video licensing agreements, it is essential for content owners, creators and distributors to make sure that all of the details in the agreements are correct before allowing the third-party to have any access to the material. Failure to properly sign video licensing agreements can lead to unauthorized use of the material, which is an infringement of intellectual property rights. It may seem unusual that a third-party would claim to have a license from someone when they do not and/or have signed a video licensing agreement, but there are cases where this does happen. You do not want to be in a position where a third-party has used your material and then claims that they legally had a license because they have a copy of a signed video licensing agreement that you never authorized.
A video licensing agreement should outline ownership of the content including proper credits (not just the name of the person or organization, but all of the people that should be recognized in the credits). There may also be restrictions on where the audiovisual multimedia content can be used, for example, in a specific territory or region. This will be listed in the video licensing agreement and should be respected by the third-party.
Types of Video Licensing Agreement
To better understand video licensing agreements, let’s start by differentiating them into three broad categories.
1. Exclusive License Agreements
The most common license agreement is the exclusive license agreement. A copyright owner may license his/her work to a third party with the terms that the third party will have exclusive rights to create, market, and distribute the copyrighted work. This form of license is effectively a sale of rights.
2. Non-exclusive License Agreements
With a non-exclusive license agreement, the geographical restrictions apply. For example, if an individual is creating videos based on real properties with the intention of marketing those as such (think real estate videos), and he/she wants to distribute them throughout the country. In this scenario, the individual would look for a license agreement that allowed him/her to distribute the videos through the country (and even internationally).
3. Bundled License Agreements
This type of license agreement is quite common when the creator of content has additional content that provides some form of added value to the licensed content. An example of a bundled license agreement would be a licensing agreement for a music video. Just as the music or lyric writer would retain some rights to any performance of his/her song, the performer is entitled to royalties and compensation for his/her performance.
Key Clauses in a Video Licensing Agreement
Duration: A stipulated period for the grant of rights is vital to limit the exploitation of licensed content to a certain time-frame. This protects the licensor from being contracted into permanent licensing engagement, where business models change. It also enables the licensee to plan its strategy for medium-term exploitation of licensed content.
Territory: This clause refers to the geographic area where the licensee can exploit the licensed content. Usually, the greater the territory, the more valuable is a license. Certain regions, such as Asia, are known for relatively high licensing demands. For example, a leading Indian film producer has been acquiring copyright licenses of major Hollywood films to exploit them in South Asia.
Rights Granted: This clause will delineate what the licensee is entitled to do in terms of the licensed content. It is important where certain content generating new revenue streams such as derivative content is involved. For instance, where content could be used to generate merchandise, revenue sharing terms may be negotiated.
Payment Terms: These terms delineate how much the licensee shall pay for the rights to the licensed content. These would include the license fee per form of distribution/exploitation, as well as the share of revenues to ensure the licensor is not short-changed once the licensed content becomes a big hit. The payment term would also set out the specific time at which payment would be made to discourage delays.
The above clauses are only examples of key provisions relevant to video licensing. As this field continues to evolve, and more players enter the entertainment space, there will be many more clauses that become standard practice.
Video Licensing Agreement Negotiation Strategy
Negotiating the terms of a video licensing agreement can be a complex and often contentious process. To ensure an agreement that is fair and beneficial to both parties, it is essential to approach the negotiation process with a clear understanding of your own goals and priorities as well as those of the other party. Keeping things professional is key to maintaining goodwill throughout the negotiation process, which can sometimes take some time to resolve.
Clearly define your expectations in advance of meeting with the other party to discuss the terms of the video licensing agreement. Think seriously about how you intend to use the material as well as what rights you are willing to relinquish. Perhaps most important is identifying your intended audience and how your plans may be affected by the video licensing agreement terms.
If appropriate, consult with a lawyer before commencing negotiation on a video licensing agreement. Having someone who is knowledgeable in licensing agreements that can counsel you on best practices and pitfalls to avoid ensures that no important issues will be overlooked. Consulting with a lawyer also gives you a better idea of whether you are on "safe ground" regarding your expectations.
Be ready to appreciate the other party’s goals. Anticipating the needs and wants of the other party helps you craft your negotiating strategy. Keep an open mind when negotiating the terms of a video licensing agreement, and be willing to concede a few points if doing so will allow you to gain the upper hand in other areas. Negotiation should be a dialogue, not a competitive game.
Keep your focus on finding a mutually beneficial resolution. The best contracts are those that leave both parties satisfied with the terms. It can be hard to step out of the spirit of competition during contract negotiations, and this can make agreeing to terms that aren’t ideal for both parties particularly difficult. Many businesses rely heavily on their reputation and repeat customers, so you don’t want to risk putting a potential customer off by insisting on unfavorable terms. Look for ways to emphasize your willingness to collaborate and examine the negotiation process from the other party’s perspective.
Pitfalls to Avoid in Video Licensing
Enforcement of video licensing poses many potential pitfalls that can cost the platform acceptable use or money. The following are common mistakes that you will want to be sure to avoid: Overly Broad Rights. It is common to seek to transform a video into multiple mediums. However, you want to make certain your license is not overly broad beyond use on a platform and not unlimited in time. You should carefully review any subsidiary rights granted by the licensee to be sure they are restricted to the intended use. For example, you want to know if the licensee is allowed to transfer rights to another party? If the agreement is for a limited time, you want to be sure that it terminates on the agreed date. Many license agreements are signed for too long a period. ICANN established a .AI domain name in 2016. Anyone anticipating the rise in popularity of the domain name can expect to see a rise in licensing too. However, video on social media may have a shorter life and you will want to license for no more than three years. Finally, you will want to be careful that the scope of the rights of use are narrowly tailored . Those that wish to avoid paying a premium for overly broad rights will want to narrow the uses. It is better to narrowly tailor rights and seek to expand them later once the video has proven successful. Failure to Audit. All too often you will encounter licensees that violate licensing agreements. The only way to detect violations is to audit the licensees to determine unauthorized usage. Technology now makes such auditing easier, such that you should consider engaging an auditor. Whether or not you audit, you will want to concern yourself with regular monitoring. You will want to know if the licensee makes unauthorized changes to the video. You will want to obtain authorization to examine the modifications. Scope of Use. Many licensees will seek broad scope of use. However, you do not want to have an agreement that anticipates multiple media such as airline audio visual on demand (AVOD) or non-linear television (NLT). You will want to obtain narrow scopes for use. You will also want to monitor and enforce the license agreement for these broader uses.
Legal Issues with Video Licensing
Like any other business deal and contract, you must consider the legal aspects of the video licensing process. Whether you are licensing the videos, or licensing the rights to video footage you have captured, it is advisable to speak with a lawyer who has experience in intellectual property and digital media. There are several laws that may need to be interpreted or negotiated in the contract, or the signed license agreement with the other party, and an experienced lawyer may be able to help with these details. When it comes to contracts, and video, you don’t want to make any mistakes, as they can find their way into the contract agreement. In some cases, the contract can be deemed null and void, or one party will obtain rights to video footage that they should not have. Video licensing, if not done correctly, may lead to issues where ownership is contested, or the video footage is leaked online to be distributed to the masses.
Copyright
This law relates to the ownership of films, videos, songs, and written literature. You will communicate with employees, or other businesses, the terms of the contract in writing, but this law protects your ownership of intellectual property. In the case that the other party does something to infringe upon your copyright, and tries to claim ownership of recent video footage, copyrights will protect your property. If you have to take legal action, you may be able to do so under one of the copyright provisions.
Unicode
This relates to licensing and distributing video footage online, which is why it is included in video licensing agreements. This law covers the distribution of video worldwide, through the world wide web.
Contracts and Legal Terms
In creating video licensing agreements, the terms, the details of who owns the videos, and who is going to do with the video, have to be spelled out in the contract. Any restrictions, rights that are given, and money paid in exchange for obtaining licensing rights, must be covered in the contract, and made legible to all parties involved. This will help avoid any issues along the way.
Fortunately, if you are familiar with laws relating to intellectual property, these legal aspects of video licensing agreements should be straightforward to deal with.
Video Licensing Examples
For instance, a video production company may enter into a license agreement with a brand whose campaign fits with the videos produced. These can include educational videos for different age groups, healthcare, environmental or public service commercials, and other promotional materials. There are also business-to-business deals, where the content is created for a specific business channel or department within a company.
In one case, the award-winning travel vlogger Bobo & Cheung entered into a licensing deal with a major hotel chain in Southeast Asia. The property had a regional and global marketing budget. In order to test out new mediums, the tourism board of the city where the property was situated recommended the vlogger. The team flew in to capture 48 hours of travel footage, alternating their hustle with relaxation at the hotel . The result: an authentic view of the property, compatible with the recent relaunch of its website, and attracting viewers to the property’s Instagram, Facebook page, and Twitter account.
Another example comes from a different industry. A Chicago based equipment supplier and manufacturer for the concrete and cement industry wanted to train their employees on safety standards by creating a series of online training videos. They contacted another content creator who specializes in transforming technical content for the web. The company rented a studio space, enlisted an instructional design professional to script the training videos, and brought in their product experts to appear on camera in order to maintain a high level of quality.
According to the content creator, this type of deal was easy to negotiate, because the vlogger had a strong understanding of the needs of the business and the business had a clear vision for the content and boundaries as to what they wanted.