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Video Licensing Fees

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Thomas MitchellVideo Licensing Fees
by on Apr 15, 2011 at 2:02:03 pm

We have been approached by a company who host seminars. They would like these filmed so that they can hand them out to people attending the seminars

Now for the interesting bit - they also plan to sell the said DVDs online. Now these seminars are very expensive to attend so in theory these DVD's could sell for (£)100's (Another company in the same business sells his DVDs for £1000)

Now what are the general rules for charging a license fee? Do we charge a % of each DVD sold? If so how is this managed? He could quite easily copy these and sell them himself, change the artwork etc?

I know that is a very pessimistic way to think about things and I don't think he would but you have to think of all eventualities, right? Right??

OR, do we charge a one off fee for the complete license so they have carte blanche to sell as many as they would like?

BUT if it sells, for example, a million copies we'd be really upset at the opportunity lost!

What is the forums opinion on this? Does anyone do any work like this and how do they go about charging for it?


Head of Post Production

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Noah KadnerRe: Video Licensing Fees
by on Apr 15, 2011 at 3:43:34 pm

I don't see how you can expect to receive more than a fee for production. That the video you produce becomes popular doesn't entitle you to an additional sum of money. If you think it's likely to become very popular offer to do the video for free in exchange for a share of the profits. Unless this seems incredibly likely- I'd go for a normal full production fee and move on.


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Mark SuszkoRe: Video Licensing Fees
by on Apr 15, 2011 at 3:46:24 pm

If you are doing it as work for hire, why should you be asking for residuals? I can understand it if you did the work for a pittance and replaced the normal payment scheme with a percentage of sales. But if I'm that client you just lost my business, I don't need any ten-percenters eating up my margins. I once shot for a day on a forensic video that won a multimillion-dollar jury award, but didn't expect to get residual checks for my contribution. Just to get paid my day rate for a day's work.

I did a deal very like the one you describe just once, early in my independent career. It went badly, because after the initial dub run we counted together, the client stopped reporting how many dubs he was making and selling, so we had no real idea of how much money he'd made without paying us our "cut". We would have never known, but the dub house guys were friends of ours and tipped us off about the extra runs. It all ended up in small claims court, where we won a Pyhrric victory. I really don't think you want to repeat any part of my experience.

Do you really want to get into the distribution game with this client, or do you just want to do a production job, get paid in full once, and have it be over? Do the job well, competitively and affordably, and there is no reason he won't give you repeat business in the future. But if you make yourself look like some kind of leech or extortionist, they'll just go elsewhere.

Rather than messing with residuals and percentages of sales, you might just want to make the contractual language very clear as to who owns what. For example, client owns finished video, BUT, you owned the licensed music or stock footage in the program, and what you need is for those rights to be respected in any future transactions the client does with that product. How you want this to go is, you make it easier and more pleasant for them to come back to you for repeat business on this work, rather than someone else, because you retain the rights on the elements within the overall production, and no other production company could legally say the same. Bringing the project back to you for updates as single jobs is way better than playing RIAA cop trying to milk one job over years of tiny residuals, I think you'll agree. You explain to them that those rights are for a certain period of time and then the video is technically no longer legal, unles the rights to those copyrighted elements are renewed or transferred. They can wait until the rights expire and renegotiate, or you can set it all up up-front with an arrangement for permanent clearance, at a markup. It's about the musicians and artists getting their piece, not you. But you can simplify the matter for the client, so they can just forget about the issue and use the product as they like without legal fears. That's always a good pitch.

Anyway, that's my personal opinion.

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Thomas MitchellRe: Video Licensing Fees
by on Apr 15, 2011 at 4:05:24 pm

Thank-you Noah and Mark for your replies.

I was thinking that this would be a copyright issue where they would have to buy our copyrighted footage before they could sell it on. We've never done a job like this before so your guidance is appreciated!

I think what we will end up doing is just charging for the production of the the said DVDs and hope that our good honest work generates more repeat business!


Head of Post Production

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Noah KadnerRe: Video Licensing Fees
by on Apr 15, 2011 at 7:17:43 pm

Generally speaking if it's a work for hire which is what it sounds like- they'll own the copyright anyway. The hammer and nails don't get paid again when you resell your house do they? :)


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Bill DavisRe: Video Licensing Fees
by on Apr 16, 2011 at 1:13:26 am

Listen to what's being said by others.

At the level of the worker, people are paid based on the WORK they do. At the level of manager, people are paid commensurate with the RESPONSIBILITY FOR RESULTS they shoulder. At the level of owner/partner, people are compensated by the ECONOMIC RISK they take.

If you charge, in advance, for your labor, you're ONLY entitled to the compensation level of the WORKER, period.

You want to shoulder MORE responsibility or bear the burden of greater economic RISK by putting up (and quite possibly losing) the capital required to generate economic results - then, and ONLY then, can you claim something akin to residuals.

Simple as that.

"Before speaking out ask yourself whether your words are true, whether they are respectful and whether they are needed in our civil discussions."-Justice O'Conner

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grinner hesterRe: Video Licensing Fees
by on Apr 20, 2011 at 3:47:02 am

there are no general rules. Just negotiate what you feel comfy with.

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