What is a Video Production Contract?
Video Production Agreements: Know the Terms, Styles and Nuances
What is a Video Production Agreement?
It takes a lot of people to make a video, even a short one. A producer locates the client, a director creates the vision, a crew of camera and lights captures the images and sound, an editor weaves it all into a cohesive story, and the producer delivers the project on time. Its a lot of work, and is not inexpensive to do right. A Video Production Agreement typically describes how the production company will deliver services to a client. It also explains the financial and legal obligations shared by both the production company and the client. All of the project’s deliverables, licenses, and fees are normally covered in the contract. The agreement describes the rights and responsibilities of the parties and covers all steps in the production process including all pre-production, filming, editing, and delivery, and final payment. It is a legal contract binding on both parties. Both need to be fully informed of their rights and obligations before signing. Contracts, like any other document, can be used as tools to accomplish specific ends . Those ends may be legal ends or business ends. Some contracts are meant to address the legal ends while other may address business ends. In both cases, it is important to be able to know and exactly how the contract helps in accomplishing the ends. The business in question is the manufacturing and selling of a good or a service. There are various agreements meant to handle various business ends. Such contracts include but are not limited to licensing agreement, service contracts, sales contracts, and credit agreements. A video production agreement is meant to generally handle various ends or the production end of a business. However, such an agreement could also handle a variety of legal ends. Video production agreements can, for example, contain clauses that deal with issues such as salaries and costs. This is especially helpful since video production requires a comprehensive knowledge of subjects such as lighting, sound equipment and camera work. Even basic projects such as Youtube videos require a fair knowledge about lighting and how to handle the sound recording.
Key Elements of a Video Production Contract
At a minimum, a video production agreement should outline the following:
Scope of Work. The agreement should outline exactly what the scope of your project will be, including specific services provided by the production entity, number of videos to be produced, length of content, and any inclusions such as script writing, storyboarding, voiceovers, and pre-production services.
Examples: "This agreement includes 3 interview videos with up to 5 characters from the same brand family ranging between 3-5 minutes each." "This agreement includes all services through production only and does not include post-production editing."
Payment Terms. Include total payment amount, deposit amount, terms, and timeline in which final payments are due. Discuss rights and options if final payment is not received within that timeline.
Example: "Total payment for this video project is $10,000. A deposit in the amount of $2,500 is due upon signing this agreement. The remaining balance is due 15 days prior to footage collection dates."
Approximate Deadlines and Deliverables. Include language that clearly states both your and the production entity’s deadlines and deliverables, and any recourse if those deliverables are not met.
Examples: "The timeline for video completion has been agreed upon as one month from the date of this agreement." "If the first cut of the footage provided does not meet our expectations, we have the right to terminate the agreement and forfeit the project."
Legal Considerations in Video Production Deals
When drafting a video production agreement, it is important to address intellectual property rights. Who owns the final product? The producer or the client? Generally speaking, a producer should ensure to retain ownership of the final product until it is fully paid for. Licensing terms can be used when appropriate, but retaining ownership always gives leverage if there are non-payment issues by the client.
Video producers also need to include no competition clauses, non-circumvent agreements and confidentiality clauses. For example, if a producer is filming the inside of a big chain retail store, the client does not want all of its competitors to have access to the final product so it would be essential for the producer to agree not to allow competition to use the footage.
Finally, termination conditions should be addressed. Due to the practicalities involved in film production, producers should always try to address termination provisions so that when conditions change mid-project – as they inevitably do, the producers can terminate the agreement without liability.
Negotiating the Ideal Video Production Contract
Negotiating the terms of a video production agreement can be one of the most challenging aspects of the process. As with any contract, it is important to approach negotiations in good faith, keeping in mind that the goal is to create a mutually beneficial arrangement that protects the rights and interests of both parties. Here are some tips for approaching negotiations on a video production agreement.
Be Prepared for the Negotiation
Coming to the negotiation table with some basic knowledge about how video production agreements work will help avoid unnecessary conflict and frustration. There are many resources available that explain the basic elements of a video production agreement, including the basic elements of a videography contract, such as services covered, payment terms, scheduling, cancellations, and contingencies.
Don’t be Afraid of the Negotiation Process
Many people fear negotiations. Because a video production contract is the result of negotiations, it is important to view the process as an opportunity to come to an agreement that is beneficial to both parties, rather than as a difficult confrontation with an adversary. It may help to approach the negotiations as you would a purchase transaction, i.e., as a commercial transaction rather than as an adversarial process.
Figure Out Who Needs to Sign the Contract
It is not always clear who has authority to sign a video production agreement on behalf of a company or on behalf of multiple people. The key is to make sure that the person or persons who sign the videography contract have the appropriate authority to do so. In some cases, there may be a corporate resolution giving authority to a specific person to manage contracts on behalf of the company, or one person may have power of attorney to deal with business matters on behalf of another.
Try to Come Up With Your Own Negotiation Strategy
If you have a strategy in place before starting the negotiations, this may help you with the negotiation process. One potential strategy is to view the contract as a starting point for the discussions, which allows you to control the basic terms of the agreement without being overzealous or creating a bad impression on the client or the videographer. If possible, put together a list of changes that will be acceptable as well as those changes that are not negotiable.
Pitfalls and How to Avoid Them
When entering a video production agreement, there are some common pitfalls to avoid. If you don’t know what the pitfalls are, then you can’t avoid them. So let’s identify some of the top pitfalls and I’ll provide some tips on how you can avoid them.
Pitfall #1
Not having a written agreement.
I often hear of a situation where an individual or company will make a verbal agreement with a video production company to provide some video production services. However, despite this verbal agreement, they believe that they have an ironclad right to the deliverables. For example, if the production company fails to come through with timely delivery of the footage or the final edited program, these individuals or companies may have no recourse because there is no signed written agreement to hold the production company responsible for timely delivery of the materials.
Tip #1
Get it in writing.
Remember that an oral agreement is a contract. I know that sounds strange. But these days, people say "You have a contract." And what they really mean by a contract is a written contract. Don’t be fooled by that. You need to have a written contract to memorialize your agreement with the production company as to what services the production company is to provide and what to do if the production company does not perform the services.
Pitfall #2
Not getting the full scope of the agreement in writing.
I’ve seen a lot of situations where a producer or a company got all of the terms of their initial agreement recorded in a written contract. But as the project moves forward, they do more things. And sometimes those new things that they’re doing are verbal agreements. This can create a real problem later on if those additional things should have been in a written contract. Or if something they get in a second contract reverses something from an agreement they have in the first contract.
Tip #2
If you can, have a written agreement for every phase of a project.
Not every situation is as black and white as having a written contract for each and every phase. Sometimes a producer may want to move ahead with a few pre-production tasks. In this case the producer or the production company can simply create a written purchase order confirming what services are to be provided and what the cost is.
If there are going to be a lot of revisions to the script, then of course, it will be too time-consuming to get a new agreement for each iteration of the script. What I suggest in those cases is maintaining a log of the revisions at the end of the script. Also, you can be sure that there’s a provision that addresses script revisions, in the contract itself.
Now with regard to subsequent contracts, sometimes, the producer won’t be able to know exactly what subsequent services might be provided until they start moving into the project . That’s also okay. What you can do is at least document what the additional services are via notes or an email or a purchase order. However, if the production expands to additional services and it’s more like a separate project, that’s when it’s advisable to do an additional written agreement.
Pitfall #3
Not covering intellectual property rights.
I know it sounds boring to include an intellectual property provisions in a contract. You just want to get to the good stuff of actually getting the project produced and out to the public. But it’s very important that the producer or the talent or the production company know who owns the materials that are being created. In addition, the more expansive the project is, the more you want to make sure that you’re covering things such as background music licensing or the use of masks or props that were created for the program. If it’s a short project which could be covered under a Fair Use exception, then you might not have to worry about this.
Tip #3
Do a thorough investigation of who owns what before you sign an agreement.
More and more, you want to make sure that you’re got those provisions in place right when you initially sign the contract so that everyone’s clear as to who owns what at the end of the project. In addition, the parties can create a work-for-hire agreement that assigns the rights to the IP at the end of the project. But again, not everyone does that, and if you don’t have a contract, then you can’t fall back on this.
Other tips for avoiding common pitfalls
Tip #4
It’s important to have a comprehensive contract that includes all contingencies.
I’ve seen many contracts that don’t contemplate the possibility of the production being delayed or the deliverables being late. That can be an issue with a lot of projects. In those cases, you want to have a provision in your contract that addresses that contingency. For example, my company had the unfortunate experience of seeing the director of a project become ill for a period of time. Because that can be a given in the industry, we try to make certain that we address that in our contracts.
Tip #5
If you are the producer, own the distribution rights, and you expect to get it distributed on a major network, then you may wish to have a provision in the agreement that the producer gets to approve the final cut prior to delivery to the network.
Final note
Don’t get thrown off base if you haven’t covered all of these topics in your agreement. Sometimes situations are so fluid that you can’t expect to be able to cover absolutely everything. If that’s the case, then document things to make sure that you can keep track of any changes or any delays.
The Position of Video Production Attorneys
As the complexity of video production agreements increase, so too has the need for legal counsel in the industry. For example, I am increasingly called upon for video production or related ventures that involve an array of stakeholders that requires consideration of partnerships, corporations, trademarks, and even monopolies, all of which either call for legal input or are subject to legal analysis. This is particularly true with respect to YouTube talent.
When it comes to drafting video production and post-production deals, the process typically begins with an exchange between counsel and the creative team. It is not unusual for lawyers, in pre-deal terms, to identify and clarify previously unmet expectations. While I am diligent to create a warm working environment — I find that developing contracts generally benefits the deal and the relationship as a whole. Counsel can help to identify roadblocks, and will use practical suggestions to recommend that the team consider creative solutions. For instance, treating labor like-well-a team sport. Was the labor cost saving measure achieved through barter? Requiring video editors to work for internships may produce high quality work – but if the humans are disempowered by the contract, then you might get less than you bargained for.
YouTube and other platforms have their own contracts. YouTube’s "Channel Terms" must be used. The Google Terms of Service governs general content. Content ID terms govern use of third party content. The AdSense Terms governs the monetization process. The privacy policy governs privacy concerns. And while the platform is rarely a party in what is usually a private production agreement, it indirectly affects negotiations in a variety of ways.
The role of counsel does not stop there. Because SAG-AFTRA is a labor union, union contracts govern its members. Knowing when a deal requires a union agreement can save time and substantial money. Union contracts must be filed with the IRS, and spend reporting requirements add a layer of complexity as well.
While I don’t generally offer transactional legal services (and always suggest review of contracts by a local attorney), I do feel it important to point out that contracts may not be interpreted the same way by each lawyer. Some contracts require additional legal review on specific clauses, whether it be for provisions affecting insurance, liability, or ensuring mutual rights to terminate.
What about when a contract must be terminated? These unforeseen circumstances happen too often in this business. Deadlines are missed on both sides. Budget overages are required. Labor is expensive, and the costs on video production projects can balloon. Counsel can serve as a buffer when a production company is held up in a clause addressing indemnification. Some clauses, such as confidentiality and non-compete clauses, can wind up setting the deal back months. Video production lawyers can often counsel on reasonable paths moving forward.
Some video productions are covered by insurance. Yet even for those productions that are insured, the producer must initiate the claim. Counsel can assist producers and talent on the insurance claim process. When the insurer needs more information for the claim, counsel can interface with counsel for the insurer. This can be critical because the clock is ticking. For some production disruptions, time is of the essence. Claims are often time-sensitive, and video productions are not always equipped to manage insurance processing and notice requirements that come with the job.
In the end, the video production lawyer assists in an array of genuine risks to the client. This is not to say that video productions cannot go it alone. Rather, the presence of counsel can often provide assurance, a buffer, and creative support that can foster a healthy work environment and protect undesirable surprises.
How to Tailor a Video Production Contract
Video production agreements can and should be customized depending on the specific project. Each project will have its own nuances that come into play. A more notable video project will require a more specific agreement than a simple raw footage project.
A couple of common things to consider when custom drafting a video production agreement are: how long the term is and whether there are fees or royalties involved.
How long is Too Long?
In my opinion, the optimum time frame to use is one year. This gives the producer and/or the owner of the video enough time to maybe go back and re-use the talent or other resources without having to renegotiate the agreement. Based on the trend of the industry itself, I would think that any video agreement longer than 1 year would be considered unreasonable in the eyes of the Court.
Next, let’s look at the fees.
Fee or Royalty?
Sometimes you may not think of royalties in conjunction with video production agreements. But depending on your client and industry, it can be a significant issue. For example, in educational videos, it is often common practice for producers to ask for royalties from the use of the videos. On another note, in the adult industry, royalties are also common place.
So when do you use a "fee" structure and when do you use a "royalty" structure? It really depends on the industry, product and/or company . In my experience, if the produced content is for internal use and the organization already has an established market for the products, then a fee structure in the agreement would suffice because that organization is already making money. However, if the content has not been used before or the product is a new development, then a royalty structure would be a better fit because often times, the creator, (i.e. the Video Producer) is taking a risk by producing the content or product for an untested market. So, it makes sense to give the creator a chance to share in the benefit (i.e. royalties) if the product is a success.
Other Tips
In addition to devising the term and fees/royalties, I would suggest offering a bonus for deadlines and inclusion of how creative credit will be calculated amongst the parties involved. Those terms seem to be popular now for producers with talent. It gives them an incentive to make sure that the project is completed on time. This is especially important if the production agreement involves live events, such as award ceremonies and conferences.
The best way to approach creating a video production agreement is talking to the other parties involved and finding out what they want to see in the agreement. This approach will ensure that everyone knows what they are agreeing to and it will create a sense of ownership amongst everyone involved in the project.