Netflix, Amazon Prime Video, Disney+, and other providers have grown into big players in the film business in recent years. In this context, the platforms are increasingly working with German filmmakers and producers. Many local stories and productions have international resonance. There are various points to consider when negotiating and drafting contracts with these platforms.
Forms of cooperation, types of contracts
Cooperation with the platforms is possible at all levels. It is possible that the platforms will only acquire the literary rights from book publishers on the basis of option and purchase agreements. Furthermore, a German producer can also create a film production (e.g., series) as part of a commissioned production for the platforms. Co-productions are also possible. Or it may be that a platform only licenses a completed film production for streaming exploitation.
Decision-making powers
In the case of a production (commissioned production, co-production), the negotiation of mutual decision-making powers is foregrounded. If it is a project genuinely developed by the German producer or showrunner, the producer will want to negotiate substantial decision-making rights in terms of content. Here, acceptance of individual development stages can also be provided for. The distribution of economic risk is also decisive in the distribution of decision-making powers. If, for example, the risks of budget overspend lie predominantly with the producer, decision-making authority for budget-increasing measures should not lie solely with the platform.
Granting of rights
If it is a commissioned production, the platform will want to acquire all rights. But here, too, it is necessary to consider the extent to which certain rights can be retained. The duration of the granting of rights must also be negotiated. If the production is a series, the platform will acquire corresponding rights to subsequent productions. If necessary, the conditions (e.g., production costs) for this can also be determined in the contract.
Remuneration
The amount of the remuneration also depends on the scope of the rights of use granted. If producers are able to retain certain rights of use (e.g., stage rights), they may be entitled to the proceeds from this (if necessary, in exchange for a participation of the platform). It is difficult to negotiate a share of the platforms’ SVOD revenues for the producer. Especially in the case of a series, remuneration regulations for subsequent productions are recommended.
The choice of law of these contracts
The contract offers are generally subject to U.S. law. It is rarely possible to subject these contracts to German law. This can only succeed in the case of a very successful novel that has attracted several international film producers who are in a bidding war for the film rights. If the contract is subject to American law, the involvement of a lawyer trained in American law is advisable. Although many American legal terms are familiar to us in the German film business, they can have a very specific legal meaning in the U.S. Many of the design rights and legal consequences that we know in German law have no equivalent at all in U.S. law. Also, American law is not as codified as German law. As a rule, the German legal practitioner can rely on the fact that the statutes, in particular the German Civil Code, regulate many appropriate legal consequences for general contracts, which can be used in the event of contractual gaps or interpretation problems. In American law, the lack of such statutes can lead to surprises. In addition, the law can also be different in the different American states. In practice, this then means that American contracts of economic importance can have a length of up to 50 pages or more.
Breach of contract, disruption of performance, legal consequences
Particular attention is required when regulating breaches of contract, guarantees, terminations, reversion clauses, etc. Here, American law offers some special features that can result in disadvantages for the German side in an emergency.
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