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Merchandising and Other Ancillary Revenue Opportunities

Ancillary rights are all rights related to the use of the property in a way different from its original form. You can often see terms, conditions, and bonus rights listed in a purchase or option agreement. The term is also often used in the creation of feature films, which gives you the legal right to create other types of content based on the original film. This may include:

  • Merchandising
  • Sequels
  • Television series
  • Stage plays
  • Book publishing
  • Soundtrack recordings
  • Web series
  • Graphic novels

 

There are a few important things to consider when considering Ancillary rights such as:

  •  Whether additional or secondary rights arise from the primary right of the property. 
  •  The existing ones depend on the primary claim and are reasonably related to it.
  •  An agreement where a percentage of the profit consists of the sale of goods related to the film is considered to be related to the entertainment rights.

Purchase of Film Rights

To show a profit, a film often has to cost three times its cost to be considered a profitable venture. These margins can make stakeholders nervous because it is a wide bridge over the chasm. With the ever-emerging talent and ever-increasing salaries of writers, stories often become one of the most underrated elements of a film. Film stories often draw inspiration from multiple sources. Stories are often obtained from:

  • Television
  • Books
  • Screenplays
  • Newspapers
  • Video games

 

There may be a spin-off or spin-off rights section of the contract, which may include rights to turn the film into marketing, television programming or other multimedia. In a first-time deal, rather than asking for ancillary rights straight away, it may be better if you have the option to get them as part of the contract. This gives the original buyer time to obtain additional rights, which can be useful for those who need additional financing.

You may also hear the term negative take, which refers to the guarantee that the studio will buy the film’s negatives. During this process, the buyer and the producer agree on the standards and conditions under which the film will be made, and the producer guarantees the distribution of the film to a bank or other institution that lends them money or finances the film. 

When you apply for an option contract in the film industry, the contract is usually for a maximum of one year, although it can last up to ninety days. It is very important that the buyer’s rights are clearly defined. If a film receives a sequel, payment must be made for each additional part when the new film begins filming. If you plan to make a return, there are additional costs for that as well.

Television and multimedia rights are other popular rights included in a film licensing agreement. These rights can bring many benefits to sellers, but can be more complicated than other rights. For example, when a creator gives television rights to a producer, the creator is usually paid a royalty formula that often allocates different royalties for pilots and other parts. 

When developing a multimedia rights agreement, a sales-based formula is often created, such as a percentage of a unit payment when certain sales targets are met. These royalties often depend on the value of the property.

Television and multimedia rights are other popular rights included in a film licensing agreement. These rights can bring many benefits to sellers, but can be more complicated than other rights. For example, when a creator gives television rights to a producer, the creator is usually paid a royalty formula that often allocates different royalties for pilots and other parts. 

When developing a multimedia rights agreement, a sales-based formula is often created, such as a percentage of a unit payment when certain sales targets are met. These royalties often depend on the value of the property.

Artist Management

If you work in the entertainment industry, or simply hope to do so in the future, finding the right law firm to guide and develop your career is the best way to not only protect your interests, but also gain the recognition you deserve.

 With over 10 years of experience representing entertainment clients, the Law Firms of Sethi and Mazaheri are ready to assist you in all entertainment matters. 

As a performing artist or writer, you should use non-disclosure agreements, copyrights and trademarks in your creative work, understand entertainment law, publishing and advertising law, understand general commercial law, use well-drafted contracts and agreements, beware of defamation, and be able to distinguish between issues that could lead to litigation, and problems that require the help of a law firm like ours.

You may have a number of entertainment, agency, publishing and film music licensing agreements for which The Law Offices of Sethi & Mazaheri is particularly well suited with our entertainment industry expertise and decades of experience in entertainment, sports, representation, licensing and publishing, and modeling of contracts and agreements.

If you need legal advice or contracts for any Internet-based e-commerce business, help with legal issues such as misappropriation of trade secrets, protection of privacy, unfair competition, deceptive trade practices, breach of contract, willful and negligent misrepresentation, copyright, trademark and intellectual property infringement, false advertising or corporate fraud, we can help. 

 Whether you’re an established artist or previously published author or just starting out, we can provide you with non-disclosure, copyright and trademark agreements for your creative work, advertising and services, and provide you with well-drafted contracts and agreements that meet your needs and help avoid corporate lawsuits.

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