The 2023 Writers Guild of America (WGA) strike largely focused on writers’ residuals from streaming media and concerns about the impact of AI on jobs.
Following the lengthy strike, one of the longest in WGA history, writers secured approximately a 75-percent increase in residuals from major streaming services, along with bonuses linked to viewer numbers.
Additionally, they gained safeguards against the substitution of AI for human scriptwriters and its potential to cut earnings.
This action is just the latest way the entertainment industry is constantly reinventing itself.
This article explores strategies for future-proofing contracts and rights management amidst the fast pace of technological progress and evolving consumer behaviors.
60 years of broadcast history
Let’s consider the transformative advancements in the entertainment industry over the past few decades. HBO, launching nationwide as the first true premium channel in 1975, marked a significant milestone.
Today, it might surprise many that HBO stands for “Home Box Office,” a name that harks back to its origins of bringing the movie theater experience into the home at a time when the concept of premium, subscription-based television was novel.
The following year, TBS emerged as the first superstation in 1976, signifying another pivotal moment. These two developments were instrumental in establishing the pay TV landscape in the U.S.
In the 1980s, the industry continued to focus on home entertainment. Blockbuster stores opened in 1985, and home computers started to capture consumer attention, which later helped drive technology development in unexpected directions.
The innovations of the 2000s stemmed from the convergence of various technologies, including increased internet bandwidth, improved chip performance in PCs and mobile devices, advanced encryption algorithms, more affordable storage solutions, enhanced 3G, 4G, and 5G network capabilities, and the advent of flat-panel displays, among others.
Today, AI is poised to take on a larger role in creation, potentially upending some areas of the industry, such as animation.
We can’t guess what’s coming in the next five years, but we can attempt to ensure we’re in a position to support the unknown.
The next 60 years: new opportunities and challenges in rights management
When looking at how quickly things have evolved from just a handful of options, you have to wonder what’s next and how media companies can future-proof their businesses to manage it all.
The transition from film to VHS/DVD to digital streaming brought a wealth of new opportunities for program producers, distributors, and rights owners.
However, it also made contract and rights management significantly more complex. Staying competitive and maximizing ROI has become more challenging, and many companies are leaving money on the table.
Today, media companies must navigate multifaceted rights across numerous platforms and players. They can no longer rely on spreadsheets and manual contract management to stay on top of everything and optimize their earnings.
Even smaller media companies can wind up dealing with massive data sets.
A studio with 200 titles might have rights spread across hundreds of territories in different markets and languages. This can result in millions of rows of combinations. For more extensive libraries, the challenge intensifies.
A streaming provider might send tens of thousands of data points every month, which requires tracking and reporting back to various stakeholders. And that’s just one streaming service.
Managing this level of complexity in digital rights requires a new approach. Some critical areas to consider include:
• Managing platforms and windows. With content now distributed across broadcast, cable, SVOD, AVOD, theatrical, and more, managing rights across windows and platforms has become exponentially more complicated. Sophisticated systems must actively track rights sales, their durations, and territorial coverage.
• Dealing with legacy contracts. Many legacy contracts fail to account for modern distribution methods, such as offline downloading, which creates confusion around who has the right to distribute content via these emerging methods. Renegotiating all legacy contracts is not really feasible, so companies need flexible systems to interpret rights.
• Keeping up with evolving business models. Evolving business models such as ad-supported subscription tiers have also complicated matters. Tracking streaming income based on viewing data has complicated the process, especially when each service reports things differently. While these evolving business models have opened new opportunities to maximize libraries, it also adds directly to the complexity.
• Maintaining international rights. Sorting out the tangled web of territorial rights across regions and countries requires robust systems and processes. The global spread of streaming has made this issue far more challenging.
Here’s the bottom line: The more distribution methods and partners, the more complicated accounting and revenue tracking become, with companies missing out on opportunities to maximize revenue.
Staying ahead: flexibility, scalability, and integration in rights management systems
To stay ahead of evolving technology, rights management systems must quickly adapt to new distribution platforms, business models, and emerging contract terms.
Trying to manage rights outside of a core contracts system, such as in spreadsheets or documents, makes it impossible to update changing terms and conditions. Old accounting and management methods leave data compromised — outdated, incomplete, or inaccurate.
Rather than a rigid rules-based approach, systems must take a principles-based approach that can adapt and accommodate future changes and find opportunities to maximize revenue.
Scalability holds equal importance. Systems must scale to manage the increasing volume of new content, higher transaction volumes, and greater complexity. Trying to do this with spreadsheets, homegrown methods, or ERP systems not designed for entertainment rights impacts the bottom line – often creating conflicts that are difficult to untangle.
To effectively navigate these hurdles, an integrated approach becomes indispensable. Without a unified system, the manual effort needed to synchronize contract details across various platforms and documents not only introduces errors, but also significantly slows down an organization’s ability to adapt quickly, thus hindering its opportunities to increase profits and take advantage of optimal times to exercise rights.
By adopting a system that seamlessly manages both rights and financial aspects, organizations eliminate inefficiencies, reduce the risk of errors, and enhance their agility.
Future-proof YOUR entertainment contracts and rights management
Our industry will continue to experience rapid change, whether that is new technology, consumer behaviors, or business models. Companies must take a proactive approach to future-proofing contracts and rights management to stay competitive.
Legacy contracts, processes, and inefficient systems reduce agility.
To optimize content library returns, companies need scalable, adaptable systems. Embracing agile contracting and rights management enables entertainment companies to transform disruption into opportunity, future-proof their operations, and uncover hidden ROI opportunities.
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By Michael McGuire, COO, FilmTrack