11 Nov Content Licensing, It’s Good to Be King
With the launches of Disney+ and Apple TV+ this month, along with the expected introduction in 2020 of HBO Max, the subscription video-on-demand service from WarnerMedia, and the to-be-named ad-supported service from Comcast/NBC Universal, the programming playing field of Netflix, Prime Video (Amazon), CBS AllAccess, Hulu, Vudu and media company existing linear channels has not only gotten more crowded, but more competitive and complex. Companies such as Netflix and Apple have committed billions of dollars for the creation of original programming and/or inbound licensing of third-party programming for their platforms in order to distinguish themselves.
There can only be so many hit episodic programs such as “Stranger Things” or tentpole movies in the Marvel Cinematic Universe that act as acquisition content to attract (or acquire) new subscribers or eyeballs to a service. To have viewers come back for more after seeing higher profile programming, these services need quality retention content to keep (or retain) their viewers over time and to continue generating revenue. Today, the demand for quality content in this ever-increasing competitive environment has never been greater – this in part, makes content king. However, without these services bringing marketing dollars and viewers to new programming, some content may never see the light of day – this in part, makes these services queen and therefore, as or more important as the content itself.
This blog entry is the first in an occasional series for owners of (or parties controlling rights to) episodic programs, movies and other audiovisual content on the basics of licensing content to myriad existing services and new market entrants. We’ll cover key terms including the following:
- Exclusivity versus non-exclusivity in the grant of rights;
- Types of exploitation rights granted (Electronic sell-through (EST), transactional video-on-demand (TVOD), subscription video-on-demand (SVOD), ad-supported video-on-demand (AVOD)/free video-on-demand (FVOD), pay-per-view (PPV), premium pay linear, basic pay linear, and free linear;
- License fee or other compensation for the grant of rights;
- Authorized language(s); and
- License period, availability date and the number of runs (plays) of a program permitted.
Integral to knowing how content licensing works is understanding the concept of release windows in the entertainment industry, where a program is sequenced over consecutive periods of time for specific and distinct exploitation rights (“windows”), oftentimes exclusively, to maximize revenue from a program. We’ll cover release windows more in-depth in the next blog entry, but in the meantime, don’t hesitate to contact us with questions.