December 10, 2013
In the age of online streaming, VHS tapes seem like dinosaurs. And, much to the chagrin of film profit participants, their legacy is often fossilized in the way studios divvy up the returns from video-on-demand, digital downloads and rental streaming, Variety reports today.
Disputes over profit participation have led filmmakers and others on the talent side to sue the studios over the way they divide the backend home video money. The lawsuits seek class action status.
“Barbara M. Rubin, partner and chair of the entertainment department at Glaser Weil and assistant professor at Loyola Law School, offers a solution to potentially avoid profit disputes, shifting to contracts that depend not on revenue returns but on ‘trigger points,’ or set bonuses for such events as when a TV series is sold into syndication or a renewal of a network license.
“In other words, rather than rely on studio profit-participation statements that leave much of talent frustrated, such an arrangement would spell out revenue returns from the start. Before the era of vertical integration, when talent had considerable leverage, she notes, deals did offer non-refundable advances against future profits.
“‘I feel the frustration of everyone,’ Rubin says. ‘The studios spend too much of their time defending their lack of profits. That in turn frustrates the talent when they have reasonable expectations that, in success, they are entitled to share in some profits. That is not what the studios want to spend their time on and auditing is not what the talent wants to spend their money on.’
“She adds, ‘It would save a lot of headaches for the studios, and it would do the same job of providing long-term incentives to the talent.’”