The film value chain

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THE FILM VALUE CHAIN: LICENSING, DISTRIBUTION, AND CONTRACTS

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It’s no doubt that the entertainment industry is one of the fastest and most promising sector in Nigeria, generating millions of jobs and opportunities for creatives and content creators.

It has the potential to become the country’s greatest export, with a projected annual growth rate of 8.6% and a compound annual growth rate of CAGR of 19.3% from 2018 to 2023. Records show that the National Film and Video Censors Board has received and censored 541 movies produced by the Nigerian Film Industry in the first quarter of 2022.

This is some great news for the industry and I guess it’s time to think differently on lots of issues: brand protection, piracy management, best distribution practices e.t.c.?

A distributor is any entity engaged in the business of selling, licensing, and marketing a finished video and film production.

Major film distribution companies in Nigeria are Film one Distribution, Blue Pictures Film Distribution, Iroko TV, Ibaka TV, Silver bird Film Distribution e.t.c

Usually, the most prevalent distribution happening right now across the value chain is the online distribution via digital channels (usually known as video on demand services). Now, users can get to watch and consume contents at whatever time they want.

To get into the business of distributing movies, there are certain requirements at law that ought to be considered. The first is to get a license to operate as a distributor from the National Film and Video Censors Board. (NFVCB)

Here is the list of documents needed to get a valid license from NFVCB

·????????A completed application form, attached with a passport photograph of the chief executive officer.

·????????Company’s profile which must include profile of directors, managing officers, distribution plan, associates of the company.

·????????Tax Identification No. from FIRS

·????????Photocopies of Bank payments teller and NFVCB’s receipt for payments of required licensing fees.

·????????Company’s legal documents: Memorandum and Articles of Association, CTC of the particulars of directors and officers of the company.

·????????Identifiable office space in any part of the country

N.B It is quite important that you consult external legal advice to get adequate support when applying for any license at the NFVCB. Because there are different types and classes of distributing agency, it is best required to get legal help in order to conclude the licensing process professionally.

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CONTRACTS

Let’s examine how important contract is, in the entire process of making and distributing your film.

The film and music production often comprise different players, from the executive producer to the producers, artists managers, digital publishers, writers, actors. The list goes on and on. These players play an important role in facilitating the final production of a tv series, epic movie or music production.

Moving into the value-chain, you have got to understand the critical role that contracts play. Different intellectual property rights play out when actors, songwriters, scriptwriters, co-producers and many people collaborate to make something beautiful. But there is an initial concept called clearance rights, where you get all the clearance needed at the development stage of the project.

Clearance right is about obtaining all the needed consent before proceeding into production. Sometimes, creative works of individuals may be protected by trademarks and copyright. And so it is quite important to define the IP rights before moving into real time production. Failure to take this step could cause significant legal problems, delays, and extra-costs for the production.

Executive producers should seek legal help from experienced attorneys to acquire necessary rights, negotiate a fair deal, and ultimately avoid future legal liability.

Other necessary contracts are

Acquisition agreements:?these are agreements used to acquire other artists and people for the production of the movie. These could be actors or cast agreement, art director’s contracts, custom designer’s contracts, recording artist contracts e.t.c

Licensing agreements: These are basically agreements needed to license rights to other parties. Common examples are images licenses, license to merchandize, and character licenses.

Distribution Agreement: These are the kinds of agreement executed during the production phase. E.g film distribution agreement on TV, Film distribution agreement in Cinema, Film distribution agreement on Internet.

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COMMON PITFALLS WHEN NEGOTIATING DISTRIBUTION AGREEMENTS

When a sale agent introduces the offer of film promotion, exhibition or distribution to you, please do well to think thoroughly before accepting the deal.

·????????Don’t indulge in drafts or standard template agreements, the draft agreement given to you to sign does not always match what you have been told. Be sure to revise the terms of the agreement with a lawyer and protect your legal interest.

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·????????Define the rights and responsibilities of each party upfront. Be clear on the territory the agent is serving, the specific duration of the contract, how royalties will be awarded etc. Without a clear definition of the commission and expenses on the contract, you may never get anything for your hard work.

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·????????Revise agreements and don’t indulge in general agreements. Negotiate your indemnity and warranty terms. Ensure that you can terminate the contract and get your content back if the deal is not working.

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·????????Don’t begin negotiating with dealers and distributors until you have spoken with filmmakers who are in the business of distribution. Do your due diligence, find out what is likely to work with the company, understand the concrete results they have made and if you like what you see, then you can go for it.

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·????????Don’t negotiate distribution deals by yourself, it’s not a good idea.

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The landscape of film and content distribution keeps evolving day after day, and it is the responsibility of content creators to maximize the opportunities that exist within the value chain and to reduce potential business risks.

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I hope you learnt a thing or two!

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STARFIELD LEGAL PRACTITIONERS

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