International Currency

Guest author Armando Gutierrez Velasco of Jakun Media takes a look at what it takes to prepare web series for licensing to international markets.

The online world is so interconnected that preparing for foreign licensing is something even the smallest of productions would do well to keep in mind. Consider the producer of a relatively low-budget web series with whom we will sign a contract this week to dub and distribute his show in German: as with most independent producers, the thought of international distribution seemed so distant that he was truly surprised when we called him asking about licensing fees and terms. Although he secured a deal, he could have benefitted from preparing for the possibility of foreign distribution. Here are a few tips for your own production:

Plan ahead

Video. A show one of our clients asked us to look into began as a hand-held-camcorder-with-built-in-mic project between two friends and later grew into a huge comedy sensation. While the technical quality of their later shows was great, we realized all their initial episodes would be unusable to us because of the format in which they had been shot and stored. Most distributors prefer HD content in an uncompressed format; h.264, although amazing, simply doesn’t make the cut. Use the best equipment you can get—rent, borrow, buy in installments—and keep all your raw material and project files handy.

Sound. Dubbing is one of the largest expenses for foreign web series distributors, and the easier you make it for them, the better the deal you will get. As you shoot and edit, make a point of having separate voice and music and effects tracks; delivering a single mastered track will inevitably depreciate your series, and may even be a deal-breaker for some. During preproduction think about translation difficulties, simplify language and avoid puns if you can.

Geoblocking. Geoblocking is a much hated “feature” of today’s most successful online-video portals. As a user, I absolutely dislike it. For the producer, however, it can create value through scarcity and make the difference between producing another project in the future and working on something else to pay the debts. Of course, there is the example of Felicia Day, who demanded Microsoft-Xbox distribute The Guild world-wide in eight different languages because “the internet is global.”

Know what you are getting into

Pricing. The value of your license depends on the production value as well as the size of the market in the territories involved. When deciding on a fair price, research the number of households with broadband and the number of mobile users (comScore may come in handy); otherwise at least take a look at the total population and technological development in the territories. One company we talked to last year asked straight away for an amount 10 times larger than what we could offer; when we explained that most countries outside the U.S. lagged a year or two behind in the development of the market, they quickly backed down to a more reasonable amount. They found themselves, however, in the difficult position of appearing unprofessional if they changed their demands significantly, or losing a deal if they didn’t.

If you are going for a flat-fee (see below), I have made a spreadsheet available for calculating the value of a series based on the number of views you expect to have and the CPM rates you would expect to get. It’s not perfect, but it can give you a rough estimate.

Negotiation. Remember that distributors and publishers are trying to make a profit and will bargain for the lowest possible license fee. If your negotiation skills are not that great, I suggest reading a book on the topic; I particularly like the classic Getting to Yes by Fisher and Ury.

The Contract. Once you get a draft of the contract, review it with your lawyer and don’t be afraid to make amendments. Make sure territories and languages are specified clearly and without ambiguity. Worrying about oil rigs, embassies and airplanes may be too much for a small production, but it is better to consult with your lawyer before signing your rights away.

The licensing term should also be fitting. There is nothing set in stone for web-only series, but you can expect anything from one to five years. At Jakun, for example, we typically sign three year contracts.

Flat-fee or revenue share? Revenue share is a great idea when you are expecting a large audience or are dealing with a publisher that already has a large viewer base, because it directly reflects the performance of your material. Most large studios ask us for a revenue share contract. Once you take into account international auditing, however, you may change your mind. Not only is it difficult to verify the claims of a publisher, it is also expensive, and the benefit of a revenue share may just not make up for the difference.

Conclusions

As web series carve a deeper and broader niche in the world of entertainment, you can expect them to cross international boundaries and become attractive to foreign distributors. By preparing beforehand, no matter how remote the possibility may seem, you can ensure you and your production are ready when the time comes for it to go global.

Armando Gutierrez VelascoArmando Gutierrez Velasco was born in Mexico, graduated from the Marriott School of Business, and currently lives with his family in Germany. He works for Jakun Media, a web series production and licensing company, where he researches U.S. and world-wide productions, negotiates content acquisition, and suggests ideas for new material.

(Photo courtesy of bradipo.)
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