Who Owns the Master
I have a client that's been pretty god for the past 2 years. We've worked on several video projects together. Within the past year, they hired a new marketing director...you know the type..."the company savior"...who wear the message on her shirt that "I have contacts that can save this company money".
With all of the shows I've produced and edited, they have distributed multiple DVDs the their franchisees. I send out a master to a local duplication facility, and they make the copies which I mark-up for profit.
Yesterday my client left me a voicemail saying that the marketing director has said she can get the DVD copies done cheaper than through me, and they woulld like me to supply them with all of the masters so they can make copies. I feel relly uncomfortable with this, as we never discussed ownership of the masters, because I have always sent them out for duplication.
Also, I charge a low price for editing, because I know I'll be makinhg money on dubs, and other tasks for them. I don't want to threaten my relationship with this client, but I don't want to provide them with the masters either. Who owns these masters? Me or them? How would you approach this client?
Hello Greg, The original contract or terms of service determines who owns the Master. Most contracts have a explicit "deliveries" clause that determines what the client is exactly getting (and paying for). If the contract stated that the client would receive 2 masters on Beta SP tapes for example, then they own the master. If the contract stated the client will receive 100 dvd copies and more copies can be purchased for x amount of money, then you own the master. In your situation, you are working similarly to event photographers (think weddings) - where most of their money is made when people purchase prints of the pictures, so they will never give you the original negatives (or now digital files) without charging you a large fee for the loss business.
So it comes down to whether you signed a contract and what this contract says. If you did not sign a contract, then you can argue what was the verbal understanding and demand a specific payment for the loss business. Likely if this goes to small court, you will win.
Nestor L. Lopez
Statements presented in the message are statements of opinion only and should not be considered legal advice. Please contact a qualified entertainment attorney.
Nestor is technically right, but if it comes to a court battle, you've lost this client forever. Add this case study to the long line of examples where a written agreement IN ADVANCE would have saved a lot of money and drama.
But since we can't undo what's done, the question is now: what's the best way to proceed from here?
It sounds to me like they are requesting the entire back-catalog of everything you've done for them. This could be nothing, but the paranoid in me says it could mean the marketing person is going to kick you loose and establish her territory by bringing in a new provider that will be associated with her. She's trying to show she's earning her pay, and at your expense.
I don't think there is much you can do about that, except to go out with class. If you play this right, the boss will want to know what motivated all this, and you can make your case for your loyalty to the client
I would bring the masters direct to the biggest boss of the company you can reach, tell them how much you've enjoyed working with them, and that while you think you have the legal rights to these masters, it's worth more to you to keep this client's trust and good working relationship. Tell them you hope to do more for them in the future. And leave on a very positive note. With luck, the next gig that comes up for approval, they will ask how come you aren't the one doing this.
Today the client emailed me to say that this marketing director wants all of the masters to all of the shows I've produced. Here's what he wrote:
"She now wants masters so she can go in and edit information from select tapes for other marketing/advertising projects. I'm assuming this means tapes not disks."
On my original proposal, it only states that I'm harging them for the creation of a DVD master for each show. Nowhere do I discuss providing them with Beta Masters so they can edit info with some otheer post house. Again this is a very good client, but I'm really unfomfortable here. Any advice on how to deal with this client without offending them? Thanks.
I agree fully with what Mark said. Take the high road and let the person you were working for (not the new Mkt. Dir.) see how honorable you are. Just be sure to let it be known that you'd like the opportunity to compete for future jobs and state that you hope past accomplishments and successes for this company will be taken into account. DO NOT go negative on the new Mkt. Dir. in any way.
The long and short of it is, stuff happens. Sometimes you are the one brought in by the new Mkt. Dir. and sometimes you're not. And sometimes new hot shots burn out quickly and/or move on to their next great opportunity.
Above all else, stay in touch with these people, including the Mkt. Dir. even if you're not getting work as you once had. This also points up the importance of having an ongoing new business sales effort as part of your overall business. There's always going to be attrition and it's usually for things outside of your control, so control what you can by always being in contact with new people.
If it was always fun it wouldn't be a business.
Ouch, Greg, this is bad.
If you really want to stay with this client, why not suggest that since you are so familiar with all the material, being the original editor, it would make sense to hire you to do the re-edits which would save money by saving time.
But I would say do NOT significantly lower your rate. This would weaken your position. It will be argued by your new nemesis that this only proves you were shafting the company with a too-high rate all along. And, that she's worth her salary because she was the one that negotiated you down on the rate. You must hold to the truth of the matter that you are worth your rate, always. It is very hard to do when the kids are going hungry at home, but one of the rules of negotiation is you HAVE to be able to walk away if it comes down to it, or you have no leverage at all. And you will lose every time.
If you want to offer some kind of deal-sweetener, it has to come out of some other part of the service, maybe finding some economies in the shooting package, or offering to one-up the lady and her DVD's by setting up streaming versions of the programs that would mean NO DVD replication costs ever again. You would bill for the encoding, (of course!) but you can push the idea that this results in zero physical inventory to have to manage and store and pay for, and workers can get the information on-demand. Plus, updating the programming no longer results in throwing away old versions.
Well, it's a thought, and even if it proved impractical for this particular case, I would throw the idea out to her boss just to show you are on the company's side in looking for ways to do more with less. You want to always come across as classy, loyal, and supportive. Because you are. This puts you in the best possible position to be the "white knight" that comes to the rescue when they suddenly find they need you. Send out occasional notes, newsletters, and other mailers to keep you "on the radar". I think this is about the best one can do in such a case. Time to drum up new clients. Perhaps check into the old client's rivals.
Mark and Nick are right. You could and most likely should, take the high road and give the client what they want. What to do here is a
Thanks all for your advice as usual. My original proposal/contract charged them for one DVD master.
So if they want a Betacam master it will take me a considerable amount of time to find the media on my hard drives, move it back into my system, and output it to Beta SP. I'm concerned about such things as the rights of the actors in the show, the voiceover talent, and the music cuts. Wouldn't they be entitled to additional payment especially if their images/voices are used in advertising?
I agree that I'd like to be the one to be editing the video, sine not only do I have the edited show, but also the raw footage.
Do you all have something worded in your contracts dealing with ownership of the material? How's it worded.
I also found this article on-line.
If you were a mean, bitter, spiteful person, you might tip off the actors and music rights holders that they were being gypped out of royalties, and to contact Miss Marketing Person to get their checks. If you were an evil person, that is...:-)
Or, this could be another way to distinguish your niceness by politely warning the boss over there that they might be unwittingly exposing themselves to legal issues regarding those rights, and that (for a fee) you could handle re-negotiating them as their representative...
I've been in the position of the inside guy many times...and have had the VP try to get footage/masters from my vendors for a song. One time it got ugly. The Marketing VP wanted to sell the footage and completed project to a stock house that would re-cut and sell the material as spots to other similar companies. This would reduce the comapnies overall cost on the original prouction and "the savior" would look like a real hero.
But the savior had no right to do so...and the production company would not give them the footage...but offered a sale. The VP was very angry and was sure she was in the right but the corporate attorney led to to realize she had no rights.
Realize...you have already lost this client. You can take the high road...and hope you do not end up with any additional expense (due to residuals that you have already mentioned.) And you can explain that you cannot give them the footage due to your relationship with your suppliers...but you could sell them the master for $(fill in the blank) price.
Make it worth your while...your training guy may still use you...the new marketing guru has her own ideas that don't include you...get some oney while you have an opportunity.
The bottomline is that in lieu of a contract to the contrary, YOU own the masters. This is because in intellectual property law, the ownership is with the producer unless specifically stated by contract, etc.
Most court cases would be settled in that way and courts tend to side with the "little guy" in these kinds of cases. Sure, there are exceptions but this is the general rule.
You can be "dead right" in the same way that a person can have the vehicular right-of-way and demand to take it when the resulting collision will cost them their lives.
Nick, Mark and others have offered some wonderful advice as to ways that you can take the high-road in this and I would offer only one additional point: When you understand that you hold the rights and make it clear to the people that you respectfully know your rights in this regard -- without being a jerk about it but doing it in an understated way, yet still from a position wherein knowledge is power -- you can make it clear to the higher-ups that you are a team player. That is what they put value on and a sudden shift in direction that produces little tangible results may find the new hotshot gone from the field and the higher-ups wanting you back on their team. I have seen it happen and even here in San Luis Obispo County which is only about a half million people all totaled, I have see it happen more than a couple times.
One of the hardest assets that company owner/manager/builders face is getting the right people for their team. When they find people like that, they are priceless. Make sure that the real players know that you are once again being a real team player just as you have always been.
In most business deals that I have seen, there is usually a "buyer" and a "decision maker" and they are not necessarily the same person. For example, if you were selling flooring for a beautiful home, the husband may be the guy who will be standing there negotiating with you and may even write you the check but I will guarantee that his wife is going to make the decision about whom she wants to have in her home. While, today your new protagonist may be the buyer, the real decision making power usually rests somewhere else and it is to those people or person, that you must be seen as the level-headed team player that you have always been.
And as it was said here, stay in touch -- even with your protagonist. You know the field and in a pinch, you are the likely candidate to help pick up any pieces should something break. But out of sight is out of mind and if you are not there in mind and spirit, they will just assume you are too busy, not interested, and will look elsewhere (maybe even doing so wishing that they could have had you back).
I agree...I've gotten wonderful advice here. But there's a bit of a misunderstanding. The client who originally hired me knew me from our past employment together. He's part of the training department.
All the videos i produced, directed and edited were training videos for their sales and technical staff. This ew person is part of the marketing staff. We all know internal marketing departments look down on other departments, especially when it comes to creativity.
I've produced many shows for these folks, and they've loved every one of them. I evn got kudos from the CEO on more than one occasion. I'm not worried about losing the account, but I want to do two things here...protect my rights, and more importantly support my training client while under attack from the margeting "guru"
I just don't think it's right for her to ask for the masters so she can bring them elsewhere to edit. They are a large granite company. Would I buy their product and tell them to measure my kitchen, cut and fabricate the granite then drop it off so some opther granite company can install it?
So my real question is. I never included providing them a video master in the original proposals.
I feel that I most certainly do a better job editing their new videos considering I kniow the product, and have all of the camera original footage as well. Should I just tell them I do not have a video master? (only a DVD master) Should Icharge them for the masters and the rights? If so, how much would you charge per title? Or do I send them legal info on copyrights?
Whatever you decide, don't forget this entire conversation is public record and might be admissible in court.
Maybe the friend in the training department needs to be the one who informs someone above the new "hero" that you are the actual owner of the footage and that she is about to screw up years of work trying to save money that will never even show up in the company books.
We are going through a similar situation right now where a "hero" at one of our largest clients has informed the internal video department that they need to have a back up video company on call because we are usually backlogged and she fears that a job will pop up and we won't be able to do it. It so happens that I have an adaquate source of great editors, shooters and producers that can perform any task. We have three FCP systems and the hardware to support them. We charge them the same price as we did when we first started working for them, 6 years ago. When we do HD jobs, they pay a small premium for the HD camera and possibly a charge for the HD deck. (HDCAM, not HDV)
You might want to arrange a meeting with the "hero", the training guy and several others from the company. Discuss the fact that they get a lot of small freebies because they are an ongoing client. The reason is that they are loyal clients and are rewarded in small ways for being such. Bring up the fact that you legally own the footage but they are always allowed full access because of the loyalty factor. Discuss still photographers and their way of doing business.
However, you can count on the fact that she will look into the legal end and you will be presented with a "work for hire" contract if you want to keep working for them. It will be a shame to see a great client/vendor relationship go down the toilet because somebody wants to save a company a few dollars. Loyalty is drowning in the business practices of the "ME" generation and us old timers who do business on a handshake and know the value of long term relationships are losing ground to people who have no idea how a business actually works.
Good luck on this one.
It's a dry heat!
Here is a sample of a contract that shows the client as owner of all footage.
It's a dry heat!