Over the course of the last two years the YouTube ecosystem has dramatically commercialized in new ways for independent video creators. For digital talent to make meaningful upside in today’s market requires new revenue streams outside of traditional revenue splits on video ad units. Things like iTunes sales, merchandise lines, and most of all, brand deals, are now the lifeblood of these artists.
With CPMs in decline across the board – a trend that will not abate for a variety of reasons – brand deals are, and will increasingly be, what lines these creators’ pockets. However, as a talent manager I’m finding that the contracts that come along with brand dollars are in many cases too broad in scope, often to the point of exploitive. As an industry of artists, managers, agents, producers, sellers and executives, we need to strike a balance where both brands and talent win. Too often we forget that without talent, their stream of content and baked in distribution, there is nothing to sell against.
Product Placement Does Not Equal Ownership
When I say that brand agreements are too broad, I’m generally referring to the issue of “ownership”. Here’s a standard example of what I come across: brand X would like to engage a talent to perform a shout-out/call-to-action in their normal video programming promoting a product. In exchange for the shout-out, the talent is to be paid a fee. However, the brand also expects to be entitled to the “sole and exclusive ownership” of the content.
Don’t see the big deal with that? Let’s take Coke and American Idol as a traditional example of how things are done. Coke regularly integrates into American Idol programming with Coke branded cups that Randy Jackson and Simon Cowell play around with on the judging panel. Does this give Coke a reasonable right to ask for ownership in the American Idol franchise? Of course it doesn’t. It’s merely a transactional relationship. Apply this same thought-process to digital talent who produce and distribute regular programming into which brands integrate their products. Asking for anything more than a simple non-exclusive brand license is overly aggressive.
The Current Lose/Lose Scenario
Often when talent managers, agents, and lawyers push back on these ownership terms, the middleman (like an ad agency or multi-channel network) has little wiggle room because the umbrella contract they signed with the brands guarantees these rights. This creates a lose/lose scenario where the middlemen must keep parity between the rights of the brand and the creators. If a limited licensing arrangement can’t be reached, the talent feels taken advantage of and the ad agency, MCN, and/or brand feels the talent is being unreasonable.
What’s The Solution?
This issue will only be resolved when sellers and agencies are more aggressive on their terms with brands. Rather than looking at the brand as the sole client for whom they must please at all costs, seller’s and ad agencies need to shift their perspective to include talent as a respected voice in the room. Perhaps it will take some high-profile complaints to change the culture, but one thing is for sure, managers, agents, and attorneys need to be reading through contracts carefully to ensure deals are crafted in a talent-first manner where home-grown IP is protected.
Andrew Graham (@MistaGraham) is a talent manager working with top-flight emerging talent like Our2ndLife (AKA O2L), Lohanthony and BrittaniLouiseTaylor. Recent projects include a partnership between O2L and the MTV Movie Awards and a collaboration between Seacrest Productions, Connor Franta and Coca-Cola.
Man on a wire photo by Alan.