Recent UK industry developments

New VOD regulator - ATVOD
OFCOM has delegated the regulation of video on demand services and responsibility for editorial complaints to the Association for Television on Demand (ATVOD).
Ref: www.atvod.co.uk
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SeeSaw video on demand television service - licensed internationally
In it's first year the new video on demand television service platform is projected to have generated over one million streams and over £100,000 for each of its leading independent suppliers. The tecnology was developed by Loko for Project Kangaroo (originally a joint venture with BBC Worldwide, ITV and C4 which ran into regulatory concerns with OFCOM). Acquired by www.arqiva.com/ the VOD technology is now being licensed internationally for broadcasters www.seesaw.com/ (updated 16.11.10). Back to top

OFCOM grant go ahead for new free IPTV platform service - Youview
With no monthly TV subscription the joint venture (originally known as Project Canvas) has covercome strong opposition to OFCOM from pay subscription channels BSkyB and Virgin Media. Their specific concerns included the technical standards being developed would be withheld from competitors and therefore restrict competition. OFCOM recognises this is still an emerging sector and the market impact will be kept under review.

The joint venture with the BBC, ITV, BT, Channel 4, TalkTalk, Arqiva and Five - provides Freeview or Freesat channels, the last seven days’ catch-up TV, and the choice of on demand and pay TV - films, sports and US drama. The IPTV service requires a YouView box and broadband access to watch content on TV. www.youview.com (updated16.11.10)
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UKFC closure follows BFI / UKFC merger being off and investment projects for BFI sacrificed
The Ed Vaizey Culture minister will make an announcement on the Governments new film policy for the UK on Monday 29.11.10. (Updated 24.11.10)

In July it was announced to the industry without notice that UKFC will close when it's current funding ends in April 2012 in a surprise move by the coalltion government. At that time some were calling it yet another own goal for the British film industry and independent filmmakers. Described as a proposal, Jeremy Hunt the DCMS minister made the announcement without consultation in the House of Commons on 26.07.10 just before the summer recess which delayed further debate.

So far the DCMS has singled out two key activities which will continue, work in support of film certification for tax purposes and more directly channelling Lottery funding into film. Few details have emerged but the suggestion is to free up the £3m spent on administration out of the annual budget of £15m "to support front-line services while ensuring greater value for money".

It remains open how funding recouped from UKFC film investments will be administered along with the separate implications for the network of regional funding agencies.
See DCMS Press release: www.culture.gov.uk/news/media_releases/7297.aspx (Updated 27.07.10)

Background to previous belt tightening:

BFI / UKFC merger off and investment projects for BFI sacrificed: New Government cancels merger, £45m centre & £2.5m digital access plans
In a surprise written announcement Ed Vaisey the new Minister for Culture, informed parliament on 21.06.10 that the merger discussion initiated by DCMS in August last year would not be persued any further. The Creative Industries minister also acknowledged a fundamental reassessment of film support in the UK is underway. The government is looking closely at National Lottery funding and film tax relief to make sure every pound of pubic money gives the maximum benefit.

Previously Jeremy Hunt, the DCMS minister announced there is no money for a new BFI Film Center estimated to cost DCSM £45m or the archive digital access project at £2.5 but they will provide funding to build a new National Film Archive store. Ed Vaizey MP, as the new Minister for Culture, Communications and Creative Industries (joint Minister with the Department for Business, Innovation and Skills) and has responsible for: Arts, Media, Museums and Galleries, Telecoms and Broadband, Digital Switchover, Creative Industries and Libraries. Ref: www.culture.gov.uk/ (updated 24.06.10)
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Pact launches ‘A New Business Model for UK Film’
PACT's proposals if accepted by the industry will enable content creators to retain larger ownership of their intellectual property rights and have greater access to revenues from the films they create.

Chief executive for Pact, John McVay said: “This is not about seeking more funds. It is concerned with using what is already on the table to create organic growth: growth that is based upon success rather than subsidy.” Pact estimates that because of the current business model for film, producers of even the most successful films remain reliant on public funding and typically struggle to share in revenues from even hit films. Girl with a Pearl Earring (2004) earned $50m at box offices worldwide and got 3 Oscar nominations, yet its producers, Archer Street, earned a zero return, despite its obvious success. According to a recent UK Film Council report, over half of independent production companies are loss making, despite their films being amongst the most popular with audiences. This is because the current funding model ensures producers cannot retain their IP and thus have little to invest, or leverage in negotiations. Under the new PACT proposals, film companies will benefit financially from making successful films. This means they will then be able to invest in future films they make and gradually be able to reduce their reliance on public funds.

Key proposals of ‘A New Business Model for UK Film’:

• 100% of the recoupment of public investment should accrue to the production company, with 70% ring-fenced for future development and production via a 'Film Depository Receipt' system.

• 'Film Depository Receipt' system: A ‘lock box’ where 70% of monies recouped are placed on the production company’s behalf, in an interest-bearing escrow account accessed only by the production company for use on future films. To be managed by a fiduciary agent e.g. the National Film Trustee Company.

• Tax credit as producer’s equity: 100% of the tax credit should be treated as producer’s equity investment and this amount would therefore sit in the recoupment waterfall.

• Higher tax credit for low budget films: Support for the House of Lords Communication Committee’s proposal for the tax relief level to be raised from 20% to 30% on UK films with a budget of less than £5 million.

• Terms of Trade with public service broadcasters: A new deal structure with new terms including a reduction in the length of the licence period to 5 years and a ‘use it or lose it’ provision where rights revert to the producer if the broadcaster is not using them.

• Containment of legal and finance costs: Public entities to agree a proforma set of principal legal documents to save time and money.

For a full PACT description and to download the report see: www.pact.co.uk (Updated 23.04.10)
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Channel 4 merges TV and online in comissioning restructure
All commissioning and creative activities are being merged to create a single cross-platform content division. The broadcaster restructuring is being led by new CEO David Abraham. Over the last year, record digital media profits and tight budgeting enabled the channel to break even.
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Film 4 invest £15M an extra 50% - boost to Digital Economy Act obligations
Channel 4 has announced that it will boost Film4’s annual budget by 50% to £15m for the next five years. The welcome news follows a previous announcement that development and production funding was returning to levels only seen before the recession. Tessa Ross, Film 4 controller and head of Channel 4 Drama said the extra funding gives filmmakers "great hope for the future." (updated 15.10.10) David Abraham, C4 CEO had already announced a 20% increase when he was first appoined in mid 2010. "Film4 embodies all that's great about Channel 4's place in our creative culture. For 28 years it has played a distinctive role in the British film industry and we are delighted that this has now been formally acknowledged in the update to Channel 4's remit contained in the Digital Economy Act." Film 4 had two Festival de Cannes entries in 2010, Mike Leigh's "Another Year" In Competition and Hideo Nakata's "Chatroom," in Un Certain Regard. (updated 05.05.10)
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House of Lords 2010 Report on the British Film and Television Industries:

1) The UK Film Council - funding level and merger with the BFI questioned
"We found widespread support for its work, but concern that part of its limited budget is being transferred to Olympics funding. We share this concern and question whether the Film Council should be substantially financed through the Lottery. We also question the case for a merger between the Film Council and the British Film Institute, which is currently under discussion."

2) Film Tax Relief - recommend more support for smaller films - increased to 30% & relaxation of UK spend requirements
"Since 2007, the Government has supported the film industry principally through tax relief on film production expenditure. Witnesses from the film industry said the new system had been successful, particularly in attracting big budget films. We recommend some adjustments to the system with the aim of giving more support to smaller films and allowing British films to be partly shot abroad without suffering a financial penalty. Independent filmmakers still face difficulties in financing their films. We recommend that the Government consider ways of encouraging private investment in film production."

Ref: Extracts from the House of Lords Committte report published 14.01.10 Full summary and the report available: www.publications.parliament.uk/ (Updated 25.01.10)

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UKFC austerity plans and restructuring appointments

The UKFC and the British Council are ending their long-standing financial support for the Dinard British Film Festival held each October in France. It is unclear if the festival promoting British Films will still host their regular producers meeting designed to facilitate co-productions between both countries. France's film body CNC remains a major sponsor. (Updated 02.07.10)

Tanya Seghatchian will become the head of the new UKFC single production pot of £15m. Tanya was the former head of development and previously worked with producer David Heyman, JK Rowling and screenwriter Steve Kloves to develop the Harry Potter books into the biggest film franchise in history. She independently produced Pawel Pawlikowski's My Summer of Love, which won both the Michael Powell Award for Best British Film at the Edinburgh International Film Festival and the Alexander Korda BAFTA for Outstanding British Film of the Year. Other reorganisations include the anticipated appointment of three Senior Executives.

Meanwhile the UK Film Council has closed its public consultation into policy and funding priorities from April 2010 to March 2013. In addition to identifying savings of £25 million over the next three years, the plans include replacing the Premiere, New Cinema and Development Funds with a single unified Film Production Fund to 'champion the very best of UK film talent' , and a new separate Innovation Fund to 'support the move into a fully digital world'. The consultation closed on 9 February 2010 and the consultation document 'UK Film: Digital innovation and creative excellence' is still available online: www.ukfilmcouncil.org.uk/consultation2009 (Updated 12.02.10)

Advertiser-funded film production' partnership - UKFC and Film Tree
A new association with the film partnership specialists Film Tree, is developing 'advertiser-funded film production' in the UK by facilitating relationships between brand owners and filmmakers for the digital world. Set up by a team with experience in film marketing, finance, and advertising, Film Tree will explore innovative funding routes, and brands searching for the highest quality entertainment content for their marketing campaigns. The initiative is intended to provide film companies with better access to brand financing, offer new ways of engaging with audiences, and promote closer working relationships between the creative industries. see Ref: http://www.ukfilmcouncil.org.uk/PRfilmtree (Updated 01.12.09)

Background on UK Film Council and the London Olympics:
In April 2008 when the Film Counci's annual budget was initally cut by £7.5m (US $15m) over the next 5 years to fund the Olympics, they said they'll make up the shortfall from its reserves and from film recoupment for their three-year budget period 2007 to 2010. A UKFC spokeperson said "We are confident that all U.K. Film Council lottery-funded activity from April 2007 to March 2010, announced in our three-year plan, will remain unaffected." (updated 24.04.07) The UKFC also announced in April 2008 it was providing £18 million during the next two years to develop the film economy and culture across nine Regional Screen Agencies. Each received £ 7.7 million pounds per year out of the Regional Investment Fund for England, a mix of National Lottery and grant-in-aid funding. The Regional Screen Agencies were set up between 2002 and 2004 and have already received £ 50 million from the UKFC. The agencies are EM Media, Film London, Northern Film and Media, Northwest Vision and Media, Screen East, Screen South, Screen West Midlands, Screen Yorkshire and South West. (Updated 10.04.08)

Fomer UKFC appointments:
Pippa Cross, former Head of Film at Granada Media and a Board member of the regional screen agency Screen South began her 4 year appointment to the UKFC board on 21.11.08. Bringing experience as a financier, executive producer and producer ("Shooting Dogs" directed by Michael Caton-Jones and "Heartless" directed Philip Ridley). A total of four new board members have been announced this year. Director Beeban Kidron ("Hippie Hippie Shake", "Used People" and "Bridget Jones: The Edge Of Reason") was appointed to the UKFC board in July 2008 for a four year term. Two new appointments were previously announced in March 2008: Elisabeth Murdoch, chairman and CEO of U.K. indie production company Shine Group and independent producer Gail Egan. The new board members follow the end of the four-year stints by independent producers Alison Owen, Marc Samuelson, Iain Smith and director Gurinder Chadha. (updated 21.11.08)
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Creativity, Competitiveness & Enterprise - BSAC Report
The British Screen Advisory Council is recommending a new policy roadmap which is set out in their report ‘Creativity, Competitiveness and Enterprise in UK Audiovisual: New Vision, New Policies’.
It proposes government action in 4 key areas:
• Competition, not Shackles, to Boost the UK Audiovisual Industries
• Audiovisual Silicon Valley Needed for the UK
• Liberating Public Service Content from TV
• No Copyright, No Future

The aim of the report is to encourage government and relevant regulators to develop UK audiovisual’s capability as an enterprise sector and important contributor to wealth creation.
It recommends:
• A New, streamlined audiovisual competition framework
• A new, focused and cohesive investment in enterprise and skills
• A bold new approach to public service content in the pluralistic broadband universe
• A copyright regime that facilitates decentralised creativity and access to content in the broadband ecology

Ref: see: www.bsac.uk.com/published-reports (Updated 15.12.09)
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New OFCOM rules for Product placement on UK TV

Ofcom is proposing new rules which include:
• Restrictions on the types of products that can be placed
• Details of the types of programmes in which products can be placed
• The way in which products can be included in programmes
• UK-produced programmes with product placement required to use of an on-air symbol, at the start and end of programmes

The proposals are intended to protect viewers by making sure commercial arrangements are clear and transparent. Ofcom is also consulting on options for radio to reduce regulations on paid-for references to products and service.
Following consultation, revised rules will be issued at the end of 2010 and incorporated in Ofcom's Broadcasting Code, the rulebook for the broadcasting industry.
Ref see: www.ofcom.org.uk/media/news (Updated 28.06.10)

Background on UK turnaround on product placement ban

The previous Labour Government Culture secretary Ben Bradshaw, confirmed UK product placement will be allowable on British television while ruling out the promotion of foods high in fat, salt, sugar (HFSS), gambling services, smoking accessories, infant and follow on formula and over the counter medicines. Bradshaw justified the new rules saying that a failure to introduce it would "jeopardize the competitiveness of U.K. program makers as against the rest of the EU." The UK is the only EU member state apart from Denmark that had not yet introduced product placement. (Updated 12.02.10) Ref: www.culture.gov.uk/reference_library/minister_speeches

The Department of Culture, Media and Sport consultation closed in January 2010 and the department's thinking was set out: www.culture.gov.uk/reference_library/consultations
While the new AVMS Directive states that all EU member states must prohibit product placement, each country may decide to allow certain exemptions. Also see 'Television Without Frontiers / Audiovisual Media Services Directive' below. (Updated 27.11.09)

Ben Bradshaw the then Secretary of State for Culture, Media and Sport became more open to the idea than his predecesor Andy Burnham who had previously and repeatedly warned of his opposition to product placement on the basis there is a risk it will "contaminate programming" and the U.K.
Some time ago PACT announced a voluntary product placement code agreed with ITV, Virgin Media and Discovery which promotes "transparency," "no undue prominence" and "editorial independence." These guidelines include an onscreen logo to make viewers aware of the latest lobbying for what producers and broadcasters describe as "a legitimate new revenue stream." ITV managing director of advertising and brand Rupert Howell insisted that product placement is "an innovative and important new revenue stream for ad-funded, commercial broadcasters" stressing that it will help boost investment in original U.K. content "at a time when advertising revenues are declining."
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Clearer boundaries for BBC Worldwide activity
The future remit for BBCW has been set out following an 18-month review of the mandate, strategy and governance arrangements for BBC commercial activity.
Initiated by the BBC Trust the changes include:
• An end to mergers and acquisitions unless there are exceptional circumstances
• A clearer focus on securing value from the BBC's own intellectual property
• An exit from any activity that is not in keeping with the BBC brand
• Divestment of stakes in non-BBC branded international channels over time where it makes commercial sense
• A more transparent 'first look', with greater market testing to establish the right pricing structures

The review was based on three key principles regarding the BBC's approach to commercial activity. The BBC should:
• hold onto the value of its intellectual property;
• exploit that value on the licence fee payer's behalf; and
• make sure no commercial activity damages the core brand and reputation of the BBC, either at home or abroad
Ref: See www.bbc.co.uk/bbctrust (updated 24.11.09)
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Television Without Frontiers / Audiovisual Media Services Directive
The AVMS Directive comes into force on 19 December 2009, amending the Communications Act 2003 and the Wireless Telegraphy Act 2006. It will also include some 'minor consequential' amendments to the Copyright, Designs and Patents Act 1988(updated 27.11.09)
Ref: See http://www.culture.gov.uk/reference_library/publications/6430.aspx

Background to the UK public consultation
Initial proposals for implementation were announced in Spring-Summer 2008 and copies of the DCMS consultations published. The DCMS and Ofcom then set up a stakeholder group to discuss the implementation of the Directive and were keen to continue the close contact with consumer groups, civil society groups and industry as plans developed.

For instance the Directive states that all EU member states must prohibit product placement, but each may decide to allow certain exemptions. For example up until late 2009 product placement has been banned from all U.K. made programs and the former Culture Secretary Andy Burnham said his initial view is not to change this. The consultation allowed broadcasters and suppliers an opportunity to argue against the ban and he called on the industry to "marshal strong arguments and put forward a convincing case."

The new rules will apply from the end of year 2009 after allowing each Member State 24 months to introduce the regulations into national law. Viviane Redding, EU Commissioner welcomed "the more flexible approach which " promotes less regulation, better financing for content and greater visibility to cultural diversity and the protection of minors." Aiming to create a new level-playing field in Europe for emerging audiovisual media services including video on demand, mobile TV, audiovisual services on digital TV, the directive's extention to the internet and non-linear services is being opposed by some sections of the industry.

The Directive requires the UK and other member states to introduce "co-regulation" of video- on-demand services. This is forming a significant part of the DCMS's work with an important contribution from Ofcom.
Ofcom are also considering whether, and to what extent, to change current UK rules on amounts of TV advertising in the light of the Directive.

The new rules also provide for:
• an update EU rules on TV broadcasting
• simplified rules on the proportion of TV broadcasts that can be taken up by advertisements
• product placement in certain types of TV programme where member states want to permit
• retaining the single-market “Country of origin” principle, where TV broadcasters are regulated only by the member state from which they are transmitting
• the regulation of non-EU satellite TV channels based in the UK
• broadcasters’ accessing footage of major sporting and other events for showing in TV news programmes’ “short reports”

The UK is represented on the Council of Europe’s "Standing committee on transfrontier television" (T-TT), which has updated The convention on transfrontier-television in line with the amended TVWF/AVMS Directive. (Updated 31.03.08)
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DCMS 2013 strategy on the creative industries - "New Talents for the New Economy"
The long-awaited report from the Department for Culture Media and Sport does not spelt out how the new £70m in funding will directly impact on the UK film industry. General initiatives include 5,000 apprenticeships across the whole creative industries sector by 2013; a World Creative Business Conference, an independent review of next generation broadband; and the encouragement for the creative industries to apply for Enterprise Capital Funds (ECFs).

The Government is in the process of creating an industry training board (ITB), which will be able to impose a compulsory training levy on film-making. There will be a threshold budget level - so films below a certain budget level will be exempt. The new ITB Board will set the levy rates and define which films will be expected to contribute. Despite industry consultations it is as yet unclear how the levy will be policed and how it will apply to international co productions with the UK.

Other film specific projects include a finishing school in animation education in partnership with Aardman Animations; and the UK Film Council developing “mixed media centres” in Manchester, Nottingham, Newcastle, Liverpool, Sheffield, and Bristol. Ref: See the goverments website www.culture.gov.uk/-new-talents.htm (announced 22.02.08)

OFCOM’s Public Service Broadcasting Review
First phase of Ofcom's second statutory review is calling for a new public service broadcasting system by 2011 - three years before existing commercial PSB licences come to an end. Acknowledging the public service television channels – the BBC’s channels, Channel 3/ITV1, Channel 4, S4C and Five continue to play the dominant role in delivering public service purposes and accounting for over 90% of investment in new networked UK-originated television content - Ofcom is now inviting the industry's view on four possible PSB models:

Two models allocate responsibility for funding to just one institution - one the BBC, the other a new independent funding agency. The third model would evolve the current market and retain commercial broadcasters' designated public service role. The fourth suggested model would enable C4 to keep its PSB remit but ITV and Five would only be able to bid for limited competitive funding

The second phase of the review will involve further analysis, another published report and a further consultation in the autumn 2008 including:
Detailed evaluation of the four possible long-term models for public service content;
Specific proposals on the short- and medium-term issues identified in the report, particularly with regard to services for the nations and regions, funding for Channel 4, the future roles of the commercial PSBs, options for children’s programming, promoting innovation in content and the potential future need for intervention in interactive media. (Updated 10.04.08)

PSB Review — Interactive Executive Summary

Building on the first review Ofcom's second statutory review started in 2008 and will be completed no later than 2010. The first review "A new approach to public service content in the digital media age: The potential role of the PSP Public Service Publisher” was released on 04.01.07 which set out options for future public service delivery:

"Overall, there will be a range of opportunities and challenges…These may require a range of responses, some of which could be focused on traditional TV, and others could help ensure that public purposes and characteristics are properly addressed on wider digital media...If further intervention were required on public service grounds, a number of potential avenues are available. Further intervention could:
• Be limited to linear television only – with funding focused on specific broadcasters, forms of content (e.g. support for regional news, local TV or indigenous language services), or via targeted grants on a commission-by- commission basis
• Have an important digital media element – whether support for existing providers (either existing broadcasters or other digital media operators), or funding for a new organisation designed to deliver public service goals in new ways.

The review proposes that a mixed approach is "likely to be both necessary and desirable"and that there is "value in considering the creation of a new organisation: A new provider of public service content, the "PSP"".

Under the PSP’s operating model Ofcom is suggesting:
• The PSP could be a commissioner – rather than a producer – of participative content.
• A more radical rights model could be designed specifically for an organisation delivering public purposes in new ways: “share-aware” alternative “open licensing models”
• Would operate a non-commercial business model, although the open rights model could allow other parties to develop commercial propositions that build on PSP content and services. Relevant analogies here include open source software.

The PSP could aim to secure reach and impact by partnering with other organisations for distribution – possible partners include traditional broadcasters, local TV and community media, alternative platform operators, and service providers. Ofcom has sought responses on:
• The appropriate nature of intervention in the digital media age, and the balance between TV and non-TV forms of public service content distribution
• The potential role of the PSP and its creative remit
• The operating model – in particular, the approach to rights management
• The scale of funding required. (Updated 31.03.08)
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Recent European developments

Germany amend film law - broadcasters contributions to film fund no longer voluntary
The statutory levy for broadcasters is backdated to the beginning of 2010 and brings them to line with theatrical exhibitors and the video industry. Widely anticipated, the German broadcasters’ contributions to the German Federal Film Board (FFA), will now be calculated according to the number of German and foreign features that are scheduled. Theatrical exhibitors had made a claim of unequal treatment and the discrepancy had already been ruled as being unconstitutional by an Administrative court. The Federal court is still to announce a final decision. Another looming priority for the industry and Government is agreeing a programme for state support for the digitisation of cinemas. (updated 18.06.10)

Irish Film Board reassured ongoing funding at 2009 levels
The IFB has secured €29.3 m euros enabling it to continue to provide development production support and Section 481, the Irish tax incentive for film and television remains in force until the end of 2012. The confirmation of next years funding, although representing a 5% drop on 2009 levels is still good news, given Ireland's budget deficit. (updated 11.12.09)

Irish Film Relief renewed until 2012. Brian Cowen, Irish Minister for Finance has renewed Section 481 tax relief and the Irish film agency's budget has been increased from $28.8m (Euros 19.6m) in 2007 to 34m (Euros 23.2m) in 2008. Simon Perry, Irish Film Board CEO, welcomed the 18% increase and the decision to renew Section 481. The uplift suggests the Irish Government may well positively respond to the IFB's proposed amendments to Section 481, part of a recently completed Indecon review of the incentive. (Updated 06.12.07) The amended Section 418 tax relief was subsequently approved by the European Commission which provides 80% tax relief on investments up to 35 million euros or 80% of the production budget.

Irish Film Board investment - 50% treated as producers equity
"The producer of a film or television project in which the IFB invests is now entitled to an internal corridor of 50% subject to certain exceptions. In effect, half of the money invested by the IFB is considered as money invested by the producer. The IFB is deemed to have recouped when it has earned back half of its investment, the other half having been received by the producer. The internal corridor will not apply to net profits. This single approach is being applied to all types of films which receive IFB funding i.e. features, documentaries, animation and television drama, and all types of production and co-production, resulting in one basic principle - albeit with variations in a small number of particular cases. The exceptions are regional support funding, documentaries, and short films." see http://www.irishfilmboard.ie/ - Bord Scannán na hÉireann (updated 05.09.07)
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UK and Morocco sign co-production treaty
Potential collaborations between filmmakers in the UK and Morocco have been given a boost after the two countries signed a co-production treaty in October 2009. (updated 31.10.09). Also see 'International co-production agreements below'.
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Korean Free Trade Agreement
Under the new AVMS Directive, as part of a three-year Free Trade Agreement, Korean co-productions will now qualify for the 50% European quota.
Two concessions for animation in the criteria to qualify as a co-production for the purposes of the European quota:

• Three European co-producers will have to be involved (for live action it is two)
• The minimum combined financial contribution of the European partners must be 35% (for live action it is 30%)

A standing committee of EU ministers and civil ministers will monitor the impact of this going forward.
PACT's initial concerns are around the serious implications for UK producers, who may struggle to be involved in co-productions with Korean partners due to a lack of tax incentives. (Updated 27.11.09)
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Communication on "Creative Content Online in Europe's Single Market"
The long expected European Comissions communication was published in early 2008. The new proposals follow the EC’s initial public consultation in 2006 on ways to stimulate growth of a true EU single market for online digital content (films, music & games). The Communication seeks to address two key challenges including:
· Content online platforms
· Multi-territory licensing for creative content

From the beginning the proposals have run into strong industry opposition, with rights holders noting it is essential they participate in drafting any changes and have the opportunity to consider and evolve practical industry responses.

Rights holders claim that online licesing must fit in with the real life world and because different windows vary in different territories it remains vital rights holders are able to retain the option to manage their exclusive rights and exercise them through collective agreement. From an economic prespective, in the medium and longer term, the sustainability of market for the creative industries requires different approaches and this flexibiltiy will continue to be appropriate in different territories and single territory licenising will remain an important option.

It is also claimed that on-demand distribution online can have a substantial knock-on effect on the value of creative content, for example within the secondary window one form of delivery can potentially damage the value of another; that the distinctions between primary and secondary markets are no longer clear as they once were. There are also separate practical difficulties of securing rights clearances on an all-encompassing basis. Therefore it should be accepted that the market for online content will continue to develop in different ways and at different paces for different types of content and traditional business models will need to operate alongside new online business models. (updated 31.03.08)
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Copyright & creative rights developments

Digital Britain Report announces key proposals for digital economy
In June 2009 the government published their strategic review proposing action in 3 areas:

Digital Content:
• Facilitating innovation and experimentation for the creation and monetisation of digital content
• Tightening the legal and regulatory framework to combat digital piracy
• BBC licence fee consultations on ‘contained contestability’ for local, regional & national news
• Support for independently funded news consortia to take over regional news on ITV
• Potential collaboration between BBC Worldwide and Channel 4
• Channel 4 to champion new talent across all digital media
• Guidance on the media mergers and an enhanced role for the regulator Ofcom in local mergers

Digital Participation:
• Three-year national plan to improve digital participation, Martha Lane Fox appointed ‘Digital Inclusion Champion’
• Programme of digital switchover in public services. Revised digital remit for Channel 4 and a key role for BBC in digital development
• Guaranteed funding for three years for targeted marketing and outreach

Communications Infrastructure:
• UK-wide access to 2Mbps broadband by 2012 and digital radio upgrade by 2015
• Accelerating current and next generation mobile coverage and services
• Ofcom to assess the UK’s communications infrastructure every two years

Ref: See www.culture.gov.uk/what_we_do/broadcasting/

Just days before the report was published, Ben Bradshaw replaced Andy Burnham as the new culture secretary in the emergency cabinet reshuffle.
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UK copyright consultations: Gower Intellectual Property Review
Following the second round of consultations, an anouncement is expected before the end of 2009 on extending the current copyright exceptions. In early 2008 the UK-Intellectual Property Office published a new round of consultations on the proposed changes to copyright exceptions, arising out of the preevious year's Gower Intellectual Property Review. Including a controversial proposed exemption for "format shifting" and extensions of the UK “fair dealing” exceptions (when the © owners permission is not needed in specific limited circumstance):

The Gower review is proposing new extensions:
• for educational establishments
• for format – shifting
• for private study and research
• for libraries for the purposes of preservation
• for caricature, parody, or pastiche

Responses to date seem to support an exception for caricature, parody and pastiche and a revised "fair dealing" provision for the purposes of parody and satire could assist in promoting creativity in the field of comedy, reduce clearance costs, and bring the UK more in line with the United States more favourable "fair use"provisions.

But the proposed exemption for format shifting in the case of film and television content continues to face strong industry opposition. Including arguments that the public's demand for format shifting for film and television is not yet proven, and the demand is likely to be significantly less than that for music content and a personal copyright exception will conflict with current Digital Rights Management use. It will create more confusion for consumers as well as potentially making DRM use open to a legal challenge. In other words the exception will have unintended consequences, the public is already often uncertain over what uses they are entitled to, not to mention it causing a potential increase piracy and may well undermine the very growth, in the creative content sector, the review was meant to support.

Background to copyright review:
Gower Intellectual Property Review
Published on 6th December 2006 Ref: See www.ipo.gov.uk/policy-issues-gowers the report goes far further than initially invisaged by many observers.
The Executive Summary sets out 54 recommendations including:

Flexibility - Balanced and flexible rights for consumers and rights holders
• Introducing a limited private copying exception for format shifting works (8).
• Allowing private copying for research to cover all forms of content (9).
• Creating an exception to copyright for the purposes of caricature, parody or pastiche (12).
• Providing for orphan works (13) and setting out what constitutes a "reasonabe search" for them after consulting with rights holders, collecting socities and archives (14a).
• Establishing a "voluntary register of copyright" (14b).
• Making Digital Rights Management complaints easier to file (15).
• Investigating if the DTI should label DRM systems for consumer guidance (16).

Operations
• Better provision of IP information for UK businesses via UK Trade & Investment (28) and Business Link (27 & 32), including how to use IP strategically when Companies register at Companies House (26).
• Consider a market survey by the Office of Fair Trading into whether the UK collecting societies are meetng their stakeholder needs (33).
• increasing cooperation so that competition and IP policy foster competitive and innovative markets for the benefits for consumers (34).

Enforcement
• Rasing public awareness, in particular on the wider impact of IP crime and the exceptions to rights (35).
• Matching the penalties for online and physical copyright infriments by amending s107 CDPA (36).
• Reviewing the level of damages awarded for civil IP cases (38).
• Reviewing industry protocols for data sharing between rights holders and ISP's to remove and disbar "piracy" activity (39).
• Empowering the Trading Standards to enforce copyright infringement legislation (40).
• Training in alternative dispute resolution and mediation (43) as well as for judges, and magsitrates, (44)
• Supporting the establishment of a single EU court for cross border IT disputes (45).

Governance
• Establishing a new Strategicc Advisory Board for IP policy (SABIP) covering the full range of IPP rights reporting to the Governement minister responsible (46).
• Changing the name of the UK Patent Office to the UK Intellectual Property Office (UK-IPO) (53).

Further background: The UK Government has held a major review of the Intellectual Property regime to examine key areas of concern in IP law. This is covering a huge range of practical quesions of how IP rights are used and enforced. Headed by Andrew Gower, the findings setting out targeted and practical policy recommendations by providing a foundation for the government's long term strategic vision for IP policy. This very ambitious look at reforming copyright law is intended to deal with the challenges of the digital age.

Time will tell whether the review has either the time or resources to deliver much more than a snap shot of the current issues and ongoing debates. With much of the UK's copyright law, as well as the law on trade marks and patents being derived from European Uniion directives and international treaties, there is little that can be amended in isolation.

One example is the review's suggestion that the "fair use" exceptions to UK copyright law are ill-equiped for the internet. This is quite true, and it is being argued that these exceptions need to include private use copying of DVDs on to personal computers as well a review of the time shifting exception for private use. However these areas of the law are already covered by the Information Society Directive - a European wide initative which can only be reformed at a European level.

Formats don't currently qualify for copyright protection even though the UK is a world leader. Developing new laws in this area can be seen as one where a balance needs to be struck between protecting the creators and being overly prescriptive.

The Law Society was lobbying for is the abolition of the threats provion in copyright and trademark law, although some feel this can be achieved without major reform.

Other issues of concern include the complexity of IP rights and the costs involved with enforcement. Refering disputes to the Copyright Tribunal can be expensive particulary for small and medium sized businesses (see 2008 Copyright Tribunal recomendations above). The Gower report's recomendations are sent to the DTI and the DCMS (see 2008 recomendations above).

Background to format shifting:
IPPR report "Public Inovation: Intellectual property in a digital age"
In November 2006 the Institute for Public Policy Research called for a new "private right to copy" The IPPR's report was timed to influence the Government's imminent "Gower Report" (see below).

One key IPPR recommendation was to take into account the new ways people listen to music, watch films and read books. "The idea of "all rights reserved" doesn't make sense for the digital era and it doesn't make sense to have a law that every body breaks" said Kay Withers, the reports author. According to research from the National Consumer Council, more than half of British consumers are infringing copyright law by copying CD's on to their computers, ipods and MP3 players.

The IPPR argues that for too long the music industry has influenced the publics thinking on copyright issues for their own agenda, and that the making copies of CD's and DVD's for personal use would have little impact on copyright holders. While acknowleding the music industry has been right to focus on illegal distribution, Dr Ian Kearns, IPPR Deputy Director said, "It's not the music industry's job to decide what rights consumers have, that is the job of goverment".

The report also looks at how "Digital Rights Management" technologies - conflict with the public's right to "acessability". "Someone with poor sight may use screen reader technology and may have to change the format of the content to use it but DRM technolgy isn't sophisticated enough to take this into account" said Kay Withers who argues the British Library should be given a DRM free copy of any new digital work and that libraries should be able to make more than one copy. The IPPR also opposes the music industries call for an extension of the current 50 year copyright term for sound recordings.
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EU proposes longer copyright for performers
The EU has proposed that performing artists should be entitled to keep copyright on recordings for 95 years instead of the current 50 years. The International Federation of the Phonographic Industry, which represents recording companies such as Warner, EMI and Sony BMG, has welcomed the move. (Updated 18.02.08)
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Back in September 2006 the European Comission announced plans to boost intellectual property rights by cutting copyright levies for electronic companies and products from ipods to DVD players and mobile phones. By developing a more efficient levy system and by promoting IPR's the EC aimed to make the European Union on of the the most deynamic, knowledge- based regions in the world.

But on 18 October 2006 "Culture First" launched an appeal to the EC not to scrap the copyright levies on private copying that help support creators across Europe. The campaign claims scraping private copying levy, worth €560 million ($700 million) in 2005, would deny filmmakers, performers and other creators a vital revenue stream. They say it provides content creators with a commercial incentive to work in the industry as it makes up a considerable part of their income. The coalition includes European authors' group GESAC, international authors' group CISAC, European film directors group FERA, international performing artists' group GIART, the International Confederation of Music Publishers ICMP/CIEM, independent music label group Impala and European actors' federation EuroFIA.

Nevertheless the EC's latest draft proposals circulating in November 2006, proposed scrapping the levy within a few years. EC Officials were claiming the levy hampers IT companies developing new products and note that only 20 out of 25 EC countries apply the levy, with those that do using different rates to calculate payments. Then on 7th November 2006 European directors sent an open letter to the EC saying the levy was meager compared to the revenues of the IT industry, but was vital for the European film sector, strugelling to raise finance. The lobbying group said the EC's attempts to transform the levy into a digital rights management system have failed."Creators should have the right to be failry compensated for their work when it is being reproduced. While consumers have an ability to copy films, film directors should be able to exercise their right to compensation for such usage".

The Internal Market Commissioner Charlie McCreevy was due to circulate the EC's formal recomendations by the end of 2006. But in mid December 2006 the EU's executive body felt the issues were too politically sensative and they announced that EC President Jose Manuel Barroso had decided that more reflection was needed. After 12 months reflection in February 2008 the reforms were refloated and the new consultation round announced.
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The National Intellectual Property Enforcement Report
The seriousness of the growing commercial threats to IP rights moved up the agenda when the Chancellor injected £5 million into trading standards to clamp down on piracy in June 2006. A government report was launched by what was then known as the Patent Office (now known as IP Office) at the Trading Standards Institute Conference. www.patent.gov.uk/press/press-briefings
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ISAN International Standard Audiovisual Number
The ISAN is a new voluntary unique numbering registration system that is permanently assigned to an audiovisual work. It can identify that work across national boundaries and language barriers by providing a unique, internationally recognized and permanent reference number for each audiovisual work registered in the ISAN system. Some of its possible applications are: to track the use of audiovisual works; for anti-piracy purposes such as verifying title registrations to assist collecting societies in the management of rights.

An ISAN may be applied to all types of audiovisual works including motion pictures and short films, trailers, video games, productions for television or other means of delivery, including individual episodes of television series; industrial, educational and training films; commercials; broadcasts and recordings of live events (such as sports events and newscasts); and composite and multimedia works if they contain a significant audiovisual component.

The ISAN code itself is a "dumb" number, meaning that it does not include any signifying elements. Its purpose is to uniquely identify the work, and always relates and provides descriptive information about the audiovisual content. The issuance of an ISAN is in no way related to any process of copyright registration, nor does the issuance of an ISAN provide evidence of the ownership of rights in an audiovisual work.

The ISAN UK Registration Agency launched in December 2007 by the MCPS-PRS Alliance, Pact and Soundmouse.
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Copyright Tribunal Recomendations
The Governments "Innovation, Universities, Science and Skills (IUSS) Select Committee" published its 2nd report in 2008 on “The Work and Operation of the Copyright Tribunal". The main function of the tribunal is to settle various types of disputes, where the parties cannot agree between themselves, mainly in the field of collective copyright licensing. Recommendations arise from the review carried out by the UK Intellectual Property Office. Ref: See www.publications.parliament.uk
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British Government's Green Paper on the "Creative economy"
This was an attempt to set out the government's longer term thinking but even at the time some industry pundits were wondering whether fiscal incentives would be adequately addressed. "The first part of the paper was to have provided a coherent analysis of the UK’s creative industries, their significance in the global economy and the opportunities and challenges they face. This section is intended to raise the profile of the significance of the creative industries and set out an impressive picture which can be championed across government and industry. Part two of the Green Paper was to analyse existing public policy regimes, and float some exciting projects to pursue with industry, public bodies, and regional and local partners". Ref: See www.culture.gov.uk/reference_library (announced 22.02.08)
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DCMS & UKFC appointments
Prime Minister Gordon Brown's DCMS appointments: Just days before the June 2009 Digital Britain report was published, Ben Bradshaw replaced Andy Burnham as the new culture secretary in the emergency cabinet reshuffle. The new UK Secretary for Culture, Media & Sport holds overall responsiblity for all departmental policy, spending reviews and broadcasting, including the digital switchover. Margaret Hodge remains the UK film minister, responsible for all the creative industries. Also responsible for arts heritage, architecture, royal parks, museums, libraries, science and tourism. (Updated 30.06.09)

Tim Bevan has been appointed new UKFC chairman. The co-founder and co-chairman of Working Title Films took over from Stewart Till who has completed his 5 year term as Chair and four and half years as vice chair. Bevan’s credits include ‘Fargo’, ‘O Brother, Where Art Thou?’, ‘Atonement’ and ‘Frost/Nixon’. (Updated 30.06.09) Pippa Cross, former Head of Film at Granada Media and a Board member of the regional screen agency Screen South began her 4 year appointment to the UKFC board on 21.11.08. Bringing experience as a financier, executive producer and producer ("Shooting Dogs" directed by Michael Caton-Jones and "Heartless" directed Philip Ridley). A total of four new board members have been announced this year. Director Beeban Kidron ("Hippie Hippie Shake", "Used People" and "Bridget Jones: The Edge Of Reason") was appointed to the UKFC board in July 2008 for a four year term. Two new appointments were previously announced in March 2008: Elisabeth Murdoch, chairman and CEO of U.K. indie production company Shine Group and independent producer Gail Egan. The new board members follow the end of the four-year stints by independent producers Alison Owen, Marc Samuelson, Iain Smith and director Gurinder Chadha. (updated 21.11.08)
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UK film incentives
What are the UK tax incentives?
The UK tax incentives are designed to encourage more film production in the UK. They came into effect in early 2007 and the new scheme will run until 2012 with an annual budget of £120m. Shaun Woodward MP. Minister for the Creative Industries said "the scheme will be good for independent and large studio productions".

The UK film tax changes (as revised by the EC in November 2006 - see below) affect projects which start shooting after 1st January 2007.

The Chancellor said the new tax relief will be worth 20% for films costing up to £20 million, and 16% for films costing £20 million and above. It's estimated that in practice the new tax relief is worth 10-18% of the negative of a UK shot film.

The percentage figures will apply where the total amount of UK spend is at 80% of a film’s qualifying UK production expenditure (as the new tax changes only apply to the UK spend up to a cap of 80%).

The minimum UK spend threshold for qualifying films is set at 25%. In other words at least 25% of the films budget must be spent in the UK to qualify for relief.

The new legislation is set out in the Finance Act, published in the Autumn of 2006 as amedended by the EU's revisions to the "Cultural Test" (see below).

The 'qualifying UK expenditure' only covers UK elements, so it does not cover non-UK elements paid for in the UK, or UK elements paid for outside the UK. In other words the legislation defines qualifying UK expenditure as that undertaken within the UK only and this does not include expenditure on British talent, crafts and services working overseas. Put another way the official spend is where you film rather than where you actually spend. So for example, if you build a prop in the UK. and ship it to another country to shoot - that expenditure does not count towards the tax credit. This issue will continue to be strongly contested as there are other European countries where their definition of national expenditure is wider (e.g in Germany under their recently unveiled new tax relief system. HM Revenue and Customs has also inidacted in mid December 2006 that it is willing to look at a more generous defintion of what is included as UK expenditure.

The qualifying expenditure will cover pre-production costs, production costs and post-production costs but not development costs (in order to comply with European State aid restrictions). Nevertheless development costs will still be eligible for a 100% tax right off under standard accounting principals. Industry discussions are continuing with David Harris and HM Revenue and Customs, about what is, or is not, a claimable production cost, including the costs of writing the script (whether script right costs are within core expenditure and claimable against tne new tax relief). In January 2007 HMRC announced that Script costs could be apportioned -see update below).

Basically more films should qualify for tax relief, as the minimum UK expenditure threshold has been lowered from the previous 40% to 25%.

Cashflowing the tax credits: The European Film Finance Summit in Berlin heard that the Inland Revenue intend the tax credit to become available during the later part of production, which is in turn intended to remove the need for financial middlemen. The intention is these new tax incentives will be paid direct to production companies. The reforms also provide an opportunity for UK producers to phase tax credits, by taking them either at the start of production or at a later stage when they are receiving profits from the film. A few UK companies including Abacus (the film fiance arm of Zephyr Film), Aramid Entertainment Fund (a joint venture between UK financier Future Films, US Screen Capital International and Stonehenge Capital) and Brighthaven, are currently willing to cashflow the tax credits in exchange for a fee. Barclay Bank is cashflowing the tax credit through a £500m credit facillity through 3 companies including Abacus and Prescience.

The new tax credit aims to:
• subsidise the UK production sector
• encourage more home-grown culturally British films for audiences
• allow the production industry to remain as a long-term competitive location for high-budget films which bring investment into the UK
• maintain our creative & technical skills and expertise including innovation in the development of digital infrastructures.

Discussions with the Treasury continue on how the tax credit might be refined to provide ‘group relief’ to promote investment in a slate of films.

The European Commission approved the new incentives in autumn 2006. On 18th October 2006 Shaun Woodward MP, Minister for the Creative Industries, acknowledged the EC had "asked for clarification" and "there are still some issues to be resolved" as well as noting that it had taken the French two years to get approval for their provisions. Neelie Kroes, European Commissioner for Competition noted the EU was expressing new concerns about the treatment of European co-productions in the UK film tax incentive scheme. Michelle Sutton, EC competition cabinet member, also expressed concern whether the current Cultural Test for British Films meets the requirement that aid is directed to a cultural product, and whether the proposed production tax relief, is cultural, according to verifiable national criteria.

The EU finally approved the UK film tax incentives as complying with EC State Aid Rules on 23rd November 2006. This included adding a more rigorous qualifying culture test (see below), shifting the balance towards cultural criteria, settings, subject, and language, with the intention of enhancing support for British Content. Basically cultural content by itself, will now be enough to reach the threshold of 16 points out of a potential 31 points.
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How does the UK Cultural Test work? (as approved by the EU on 22nd November 2006 as complying with State Aid rules)
Operative from early 2007 the UK producer tax credits are injecting renewed vigor into the UK film production sector.

The introduction of pre-qualification provides a new level of certainty ahead of production which did not previously exist.
Basically to be qualified a film will need to get at least 16 points out of 31.

There are four sections:
•Cultural contribution: 4 points e.g. does the film contribute to the promotion, development and enhancement of British culture?
•Cultural content: 16 points. e.g. is the flm set in UK, are the characters & subject matter British, is it an English language production?
•Cultural hubs: 3 points. e.g. is the studio or location shooting based in the UK? FX &/or Post P in UK?
•Cultural practioners: 8 points for Director, Writer, Producer, composer, actors, staff & crew from within the European economic area

The new rules as revised by the EC have increased the weighting for subjective British “cultural content”.
The new test introduces:
•a process for pre-qualification (an interim DCMS letter of elligibilty)
•increased points for shooting in the UK
•increased points for music recording
•reduced points for the location or setting
•added a points catergory for producers
•provides a straight forward pass mark of 50% (i.e. 16 points out of 31 points)

The new tax credit applies to productions commencing principal photography on 1 January 2007. The new cultural test will determine which ‘British films’ are considered eligible for new tax relief and the intention is to provide better targeted support for drama, animation and documentaries.

The tax relief only applies to film intended for theatrical release when they are first planned. It is still a little unclear exactly what this means in different contexts. For instance a lot of documentaries are iintended for theatrical release. Presumably the filmmakers intentions can be ascertained if an international sales agent has been appointed or a UK distributor is on board.

Giving an overiew to PACT members on 15 December 2006 Dr Harris Policy Advisor Film, HM Revenue and Customs, noted the new system envisaged huge efficiency savings, smaller Exchequer costs and that it would work better for the producer. While accepting the requirement for cinematic relase was backward looking Harris said "producers should keep an optomistic view - you'll come out better." The PACT seminar also noted that core expenditure costs can be thought of as actual "manufacturing" costs of making a film, thereby excluding development costs, marketing costs and professional fees.

Script costs. Industry discussions are continuing with Dr David Harris, about what is, or is not, a claimable production cost, including the costs of writing the script (whether script right costs are within core expenditure and claimable against tne new tax relief). HM Revenue and Customs also indicated in mid December 2006 that it is willing to look at a more generous defintion of what is included as UK expenditure. In January 2007 Harris acknowledged that the new tax credit will allow some script costs, as the screenplay is clearly heavily used throughout filming, even though it is not strictly "core expenditure". The actual percentage will vary demending on how much of the screeeenplay is used and consumed in the UK. Therefore the cost of each individual script will neeed to be apportioned in each case and the appropriate method for doing this may vary from film to film.

DCMS Guidelines: The Department of Culture Media and Sport (DCMS) has begun to issue new guidelines, including: an overview of how it's supposed to work in practice; what the main stages of production are and how key terms are defined; and the impact on international co-productions (see below). Ref: See www.culture.gov.uk www.culture.gov.uk/tax_relief The final guidelines were published in due course but there has been ongoing uncertainty in the industry over the continuing attractiveness of the UK for co-productions. As a result the UKFC is lobbying for an addtional £5m as a new co-production fund to re-balance the impact of the new tax credits. The UKFC is also proposing an additional completion fund for market testing and remedial finance.
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International co-production agreements
For films to qualify as co-productions for the purposes of claiming the new UK tax relief, it is suggested they should be made under the official co-production treaties of the "European Convention on Cinematographic Co-Production". This is because it is difficult in practice to just rely on the definition of a British Film as set out in Schedule 1 of the Films Act 1985. Nevertheless if an international co-production passes as a British Film as set out in Schedule 1 of the Films Act 1985 it does not also need to pass the new cultural test.

The UK’s co-production agreements currently in place are with the following jurisdictions:
• UK/Australia
• UK/Canada
• UK/France
• UK/New Zealand
• UK/Norway
• UK/South Africa
• UK/Morocco

The DCMS continues to make progress on the UK’s initiatives to set up co-production treaties with China, India and Jamaica.

Throughout 2006 the DCMS re-negotiated the existing official agreements with Australia, Canada, France and New Zealand. The updated treaties "better reflect the reality of modern day co-production, and will aim to maximise the cultural and film-making benefits to the UK and its partner countries." www.culture.gov.uk/co-production_agreements

The folowing bi-lateral treaties were allowed to lapse, Italy from 2 May 2006, Germany from 1 December 2006 and Norway from 24 May 2007. Italian/UK partnerships will still be eligible under the European Convention on Cinematographic Co-Production CETS No.: 147 www.conventions.coe.int

IA new South African and British co-production treaty was signed at the Cannes International Film Festival in 2006 to enhance the opportunities between our two countries and to establish conditions for mutual benefit. It is still to come into effect.

Germany introduced a film tax rebate system in 2006 which closely follows the new UK model. It's envisaged the rebate will be part of the closing finance. In other words a film must already have 70% finance in place before applying, the finance must be "closed" within a certain timescale and principal photography must commence shortly after the rebate is paid out. It is also being proposed that non-German producers will have to engage a German co-producer to acess the scheme covering production costs incurred within Germany. Producers must have made a film within the EU within the last five years, have a leading distributor on board and plan to release at least 30 prints (15 prints for a first time director) alower threshold applies for documentaries. For German co-productions, the German partner must contribute 20% of the budget up to a budget ceiling of €25m (but if the budget is more than €25m the German partner need not pay more than €5m). German culture minister Bernd Neumann unveiled their new tax-rebate system. €60 million (US $75 m) a year until October 2009 in the form of tax rebates. Qualifying feature, documentary and animated films will be able to claim 16-20% of their production costs incurred in Germany. German films shot mostly overseas will still qualify providing they spend at least €15m (£10m) iinside Germany (cf UK new trax credits only covering UK spend - see above).
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Australia's new draft guidelines for international co-productions
Screen Australia already offers a 40% film tax rebate, known as the producer offset, and from July 2010 international co productions will be managed in a new Co-production-Offset Unit. The guidelines are being made more flexible to boost production levels at a time when the Australian dollar has strengthened against other currencies.

Proposed changes include allowing:
- Writers from outside the co-producing partner countries to contribute to a screenplay as long as they are not a credited writer of the screenplay
- An increase in the total number of points for qualifying productions including an increase in discretionary points for the contribution of creatives e.g. visual effects and sound designers
- The nationality of the source material to be taken into account
- Producers better access to finance by issuing an early letter of compliance confirming a production meets the co-production guidelines

Ref: See www.screenaustralia.gov.au/coproductions
(updated 18.06.10)
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UK Producers Lab at the Berlin Co-production Market
Malcolm Moore of Planispheres participated in the 6th Berlin Co-production Market in February 2009 after being selected in the previous year for the UK Film Council and Skillset's inaugral UK producers lab held during the market in February 2008. The Berlin side bar for film professionals is the UK's leading development programme for experienced producers on European co-productions.

One of only 17 UK producers selected, the 2008 lab involved pre-selected meetings with European co-producers and financiers and attendance at the European Film Market. Experts advising the group include Ken Loach's longtime producer Rebecca O'Brien, Christine Alderson at Ipso Facto films, John Graydon of Tenon Media, Jacqueline Hurt at Olswang lawyers and Paul Whitfield, Coutts Bank. Other Initialize Lab participants have been recognised as award winners at Cannes, Venice and BAFTA, including producer Samm Haillay working with director Sean Conway, who recently produced Duane Hopkins' "Better Things", producer Sarah Sulick who recently negotiated a deal with IFC for "The Waiting Game" and producer Anne Beresford at MJW Productions.

Malcolm has also been elected to the New Producers Alliance executive board for a three year term at the AGM held on 15.01.08. The NPA is the UK national membership organisation for film producers, screenwriters and directors. Delighted to become more actively involved with the international training and support provider for filmmakers, Malcolm will be lobbying to improve the UK tax credits to encourage more international co-productions and help the NPA develop as a catalyst for collaborations.
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UK Budget reduces sideways loss relief.
U.K. Chancellor of the Exchequer Alistair Darling's first budget in March 2008 has announced a new "purpose test" to ensure that the use of sideways loss relief is only used for "genuine reasons". For those meeting the purpose test there will be an annual limit on the amount of relief that can be claimed. These new rules will affect those spending an average of less than 10 hours a week personally engaged in the trade (non-active sole traders). Those failing the purpose test will not be eligible to claim any sideways loss relief.

The new rules extend last years 2007 budget which ended the use of artificial arrangements by "partnerships" to create trading losses to offset other income. The 2008 budget extends that to include "sole traders." The move is designed to prevent individual film investors' tax returns from offsetting predicted losses in film against profits in other sectors. The U.K. Film Council confirmed the only specific UK tax relief for the production of films is the UK film tax relief (updated 14 March 2008).

Background: In the first week of March 2007 the UK Treasury unexpectedly announced reductions to "sideways loss relief" affecting GAAP (Generally Accepted Accounting Principles) schemes which had been one of the most popular tax breaks used to bankroll UK productions. It had allowed partners to use losses in one business, to set off against income derived elsewhere for tax purposes. But now rich individuals will be eligible to invest just $48,000 (£25,000) into partnership enterprises that are expected to make losses.

After intensive lobbying by the UK's film industry, the IR has issued clarification that it will not apply to losses derived from film sale and leaseback schemes which are being phased out. The initial indications were that if it did apply to film sale and leaseback schemes it would adversly affect UK film finance companies including Ingenious Media, Scion, Future, Prescience and others. But on Wednesday 7th March 2007 the Inland Revenue clarified that sale and leaseback deals are not affected and the department ammended it's original notification statement.

The S&L schemes have attracted investors to existing Section 42 and 48 partnerships arrangements, which funded recent award winning British films including "The Queen" and "Casino Royale". The IR clarification came only after PACT and other film bodies lobbied urgently for a change of heart, by highlighting that those most effected would be individual producers putting their neck on the line to cashflow sale and leaseback schemes according to established practice. This means the last of the film S&L schemes will continue to will run their course until they are phased out this year as orginally intended.

Meanwhile the introduction of the new lower threshold for "sideways loss relief" mean it will be uneconomic for film partnerships to allocate mush smaller losses of just $48,000 (£25,000) to an investor who could have previously offset those losses against their tax bill or other income or capital gains.

Originally the IR stated that "the proposed (new) restrictions apply to partnership trading losses which arise from film production in the same way as those arising from other activities." Earlier an Inland Revenue spokesman denied the proposals would effect legitimate film investments. When the unexpected announcements were first made, the UKFC initially said that while it was all part of an ongoing government crackdown on tax avoidance, they went on to emphasise there is a generous new UK tax system in place for films.

The new film tax breaks can also be combined with an Enterprise Investment Scheme (EIS), which effectively lowers the threshold for making a profit and provides incentives to realise substantial financial rewards. The March 2007 budget announced new financial caps of £2 million for EIS schemes (updated 28.03.07).

With all these changes worries remain about the wider effect on confidence in the industry, which in turn raise questions about the sustainability of the UK's independent sector. Financiers and investors are said to remain nervous because of the poor timing and lack of government consultation or foresight leading to the recent confusion over S&L deals.

More specifically industry veterans are questioning why the decision to end sideways loss relief wasn’t made in April at the beginning of the tax year, to enable the industry to adapt, rather than announcing it in March when it was presented as a fait accompli. Concerns have also been expressed that it's been made clear by recent events that the Government can turn around and do the same thing again.

The UKFC says the UK industry can now bank on a "state of clarity" on which to build future production. (updated 15.03.07).

For IR issued statements see: www.hmrc.gov.uk/films
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UK tax relief as producers equity
PACT, the UKFC, BBC Films and FilmFour announced in May 2007 they are willing to treat the new tax credit as pari-pasu equity (pro-rata pari-pasu, pound for pound basis along with other equity recoupment positions) instead of treating it as cash to be refunded. C4 initally suggested they share a revenue corridor with the producer, whereas PACT and the UKFC supported the new tax credit being treated as producers equity, rather than a way for the broadcasters to get off risk faster. Peter Watson at the Recording Picture Company noted the new system gives producers the chance to own a slug of equity in their film for the first time. The UKFC says for the first time, we will all start with the principal that the value of the tax break belongs to the producer, not the financiers.

In June 2007 doubts are emerging about it working in practice and since the initial anouncement reservations have grown over recognising UK tax relief as producers equity. With some saying the proviso renders it meaningless and that the new initiative was counter productive. This follows news that the broadcasters and the UKFC will only treat it as producers equity &uot;where possible". And as the potential new producers corridor will not be coming out of the UKFC, BBC Films or FilmFour's own recoupment position, some industry observers have claimed it makes British films even less attractive to financiers. PACT are following developments (updated 19.06.07).
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Planispheres participating in enterprise week, inspiring ideas and how to make them happen
Wired Wednesday Workshop: Setting up your own production company
With FDMX the Film and Digital Media Exchange, the University of Hertfordshire and Planispheres.

Aimed at emerging content creators who need to understand the business and legal aspects of starting up in independent production.
· Do you need a production company when submitting proposals and scripts?
· How to set up your own production company – the basics
· Introduction to contracts
· Employing staff/freelancers/consultants/volunteers.
· Accounting, VAT, IR, insurance, health and safety
· Instructing professionals
www.enterpriseweek.org
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Professional practice - frequently asked questions
Professional practice in the film and TV industry
Each medium and genre has it’s own custom and practice. So if your only familar with one, and want to work in another you need to find out what the standard deals are. There is also a seperation between production and post production work. With production, including development and pre-production, a contract is usually used. This covers Writers, Directors, Producers, Designers in costume, production and set, Graphic Artists and Cinematographers. In all these roles contracts are more common, whereas in post-production, it’s more common to do the job and then invoice.

What to do when something goes wrong?
Get advice and support, rely on the professionals around you. Don’t pretend you know something if you don’t - it’s a highly spoecialsed industry and to excell at any one part you need to acknowledge when you need assistance.

Why is © so important? - Copyright is a right to prevent unauthorised exploition
The © owner can allow or prevent others from using your work for a period of time. There are a number of exceptions and qualifications but bascially, a © owner controls the works exploitation. If someone claims your infringing their © or you are unsure, whether you own or have permission to use material - get independent legal advice.

Myth 1 Do you have to register to get copyright protection?
- No it’s automatic providing you fall into one of the established catergories.

You need to be aware of © theft, but there are procedures you can follow to minimise the risk. There are a number of UK script registration services including BECTU’s . In France you can register with CNC (Centre Nationnal de la Cinematographie) and in the USA you can register scripts with the Library of Congress.

You should always keep your creative ideas confidential until they are permanetly in recorded form. In other words written down or recorded in some kind of media. This is crucial because your copyright can only be protected if you can prove ownership and under UK law it has to be in a permanent form.
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Dealing with broadcasters and production companies before you have a written commitment
If you have a script - it can be protected. If you haven’t got that far then you need to find a balance between setting out enough detail to make your idea original without disclosing too much. You can circulate your project/script/proposal with conditions . For example sending it with a letter explaining why it is being sent, that it is “confidential”, or “not for circulation” or “for their eyes only”.

It’s always preferable to make contact before circultaing your material, rather than sending it unsolicited, and always keep records.

Non-disclosure and confidentiality agreements are becoming more common. Ask the person your showing it to to sign it, stating the proposal will be treated in confidence, they will not divulge it to a 3rd party without consent, and if the discussions move forward both parties will negotiate in good faith.

The Britsh broadcasters have all signed up to a standard procedure for submitting programme proposals (copies are avilable from their websites) and from the relevant trade associations.
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Some situations and practical examples of is and what’s not covered by copyright
Works in the Public Domain. A potentially difficult area as it includes works which have fallen out of copyright or never been in copyright as well factual material about actual events (cf a news article which is © in itself). If your proposal subject is in the public domain, and your working in factual programmes, it is epecially difficult to demonstate has been copied without permission.

A word of caution. If you haven’t a written record of your project, one area to watch out for is when someone overhears your detailed pitch - if someone overhears it, the story’s probably in the public domain...while you can follow it up, by sending more details in writing before you meet again. It would be better to send it in advance and keep to the conversation to what’s all ready recorded. If it’s spontanious meeting - follow it up in writing as soon as you can. Set out -who- what-where -when , to confirm what was discussed.
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Myth 2. Drama stories based on living people - do you need their permission?
No not true under current UK law. You might need it for other countries that have privacy legislation. The usual UK defamation and libel laws apply.

Fair dealing covers limted circumstance when the © owners permission is not used
(a) Criticism & review proviso- if there is sufficent acknowledgement. This does not apply to photographs.
(b) Reporting current events
There is also an exception for private study and the rights of use by libraries and public institutions.
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Myth 3. The 30-40% rule if you alter a work by 40% then it’s OK?
Not true - is infinged wheter the whole or a substantial part is used without permission - and some cases have recognised a relatively small area as being substantial. It’s question of quality not quanity

Incidental inclusion. There is a provision when artistic works can be used in a film if it’s merely incidental. But before you think this could cover a mulitude of uses, remember the producer is usually responsible for what is or isn’t in the programme, So in practice it would be very difficult to claim it was actually incidentally included.

Logos brand in shot Public buildings Remakes of old films Showreels

To reiterate - There is no copyright in an idea, rather it is the expression of the idea that can be copyright protected - The reasoning - to encourge the free flow of ideas in society.
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Literary & Dramatic work
The collaborative process is at the heart of our business - it needs to be respected. If writing a project with someone else or your commisioning a group of writers -from the beginning establish what will happen to ownership of copyright in the work...

Also need to acknowledge script changes and contributions for the chain of title e.g. Based on an original idea by...

Using an existing work.
There can be an infingement if an existing plot is copied in detail even if there is no direct copying of the text. In other words making lots of changes does not necessarily circumvent the setting and characters and their situations. Even though there is no copyright in the theme, plot or characters....

Fictional characters, Fanfic - aka fan fiction - Some writers see it as flattery others as legitimate treat to their economic rights.
It is a grey area but the BBC have succesfully chased websites to prevent them publishing it.

Adaptations. Can be a difficult area because if the underlying work is out of copyright...anyone can adapt it. Again the more detail your adaptation expresses - the more you can claim it’s your work. But it can’t stop others creating their own adptations. You are in a much stronger position and it’s obviously much easier if the underlying work is still in copyright and you option it.
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Musical works
Can contain several seperate ©’s in the music itself, the lyrics, the recording rights are seperate.
This is one of the biggest underestimated costs for low budget filmmakers. The use of music should be negotiated as early as possible- not for profit clearances e.g. just for the festival circuit

If your clearing rights or expecting someone else to, sort it out as soon as you can - even if it’s “in-princpal clearance.“ Don’t leave it until post production when knock on effects can be considerable and expensive.
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Internet and On-line

Myth 4. The normal copyright laws do not apply to cyberspace.
Wrong, the same laws about reproducing apply, the same procedures to clear rights applies and the same rules apply to the ownership of internet material.

Generally the fees to clear the rights are the same as other forms of promotion e.g. for photos or clips used on a website. Again talent will require a fixed fee. Archives and library clips also need to be cleared. Again music clearances are a lot more complex.
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Ways of dealing with works which do not attact copyright protection
There are alternative ways of dealing with works which do not attact copyright protection including Formats, Titles, Passing Off Breach of confidence

Formats e.g. for a game show. You can’t easily © a format partly because they don’t fall into the catergory of being either original enough, a dramatic work or a literary work. In other words they are not easily protected under our copyright system However there are steps you can take to protect them including contract law similar to franchising deals, trade mark law, and registering the title as a domain name.

Titles. (incl names parts of sentences ) de minimis principal Can’t © but you can register e.g. as a ® trademark through a patent agent. You have to show your trading in that specific category and you have to register each individual jurisdiction, and for a particular category which is costly. In the US a feature title would always be checked to see it hasn’t been used and you can contact the Title Registration Bureau at the Motion Picture Association of America MPAA.

Passing Off. Not part of intellectual property law but if the audience thinks it’s your work when its not, it is another legal way to try to stop someone commericially benefiting from passing it off as their own.

Breach of Confidence. Again not part of copyright law. If you make a verbal pitch to a potential buyer you must make it clear you own the material and that the discussions are stricly confidential.

If someome suggests your idea is similar to another project be very cautious. If your not willing to collaborate on an agreed and recorded basis it would be better to end the discussion. Otherwise it’s open to suggest you’ve used that persons ideas for your own.
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Copyright protection covers two types of rights

Economic rights These are the rights to exploit your work in the economic sense, to be paid a fee, get secondary payments.

Reproduction right - copying the work
Distribution right - issing copies to the public
Rental and lending right - to the public
Performing right - performing, showing or playing the work in public
Broadcasting right - broadcasting the work
Cable Programme right - including the work in a cable programme service
Adaptation right - making an adaptation of the work
Availability right - to authorise acess by the public from a place and time individually chosen by them

Moral Rights These are supposedly to protect how the work is used.

Moral Rights were intorduced to bring the UK into line with the Berne Copyright Convention
Once a work qualifies for © protection in addition to the economic rights, the authors of certain works are also granted moral rights.

The right of paternity or attribution when the work is copied or communicated - the right to be credited
The right of integrity to object to derogatory treatment
The right to object against false attribution
The right of privacy in comissioned photographs

In practice moral rights are nearly always waived under UK law, although a credit will be given as a contractual term.

The UK shares a common law tradition with the USA , Canada, Australia, New Zealand so there are some similarties. A simplfied owverview of USA German and French Copyright llaw is set out below.
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Contract basics

The Basic elements of a contract are:
Intention - to create a legally binding agreement
Offer & acceptance - to reach agreement
Consideration - an agreement to do something e.g. payment can be token £1

Myths 5. Sam Goldwyn “an oral contract's not worth the paper it’s written on”.
Well a verbal contract is a contact - it’s just very hard to prove what was or was not agreed if it’s not written down.

Written Contracts. Never sign a contract without understanding what your reading. If your not clear ask. Don’t be fobbed off with legalese. Ask what it means in simple English.

At what point do you need a contract?
Before you start work. Pretty simple but you shouldn't rely on a relationship in the absence of a written agreement.

In the course of employment / freelancing
There is a presumption that if the work is done in the course of employment it automatically belongs to the employer. But is not always clear who is or is not an employee - especially when freelancing. For example, if your work is done on a consultancy basis , the © remains with you....

There is a 3 step test
1. Was the work made by an employee?
2. Was it made in the course of employement?
3. Is there no agreement to the contrary?

Note section 11 (2) CDPA 1988 in the absence of an agreement to the contrary, where a literary, dra matic, musical or artistic work or a film is made in the course of employment, the employer is the first owner of any copyright in the work.
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Working outside the UK - Copyright in other jurisdictions - USA Germany France
Each jurisdiction has different traditions and laws although there are commom threads - here is a very simplified snapshot

USA - The 1976 Copyright Act Federal and State Laws

USA Moral Rights only covers works of visual arts .
(UK literary dramatic musical, artistic works and films).

USA Economic rights and terms of protection Broadly similar to the UK except where employees works are concerned (but very complex re pre 1976 works).

The USA is now a lot more in line than it used to be since joining the Berne Convention in 1989. In the case of works made for hire, the employer and not the employee is considered to be the author.

The American system is founded in the common law system so there are similarities with the UK as well as major differences (the UK is founded in the common law system). Both are property laws .

The beneficaries of protection are authors of original works of authorship (including sound recordings)’ and there is seperate protection for performers.

To constitiute orginality the must be “a modicum of creativity” (UK test is skill, labour judgement...and the UK protects some works which are not original) America also has a different orginality concept. With Moral Rights the main difference is the US only covers works of visual arts (where as in the UK covers literary dramatic musical, artistic works and films). Also differences in the scope of moral rights granted & their duration).

Broadly similar economic rights and terms of protection except where employees works are concerend (again very complex re pre 1976 works).

The US Fair Use provisions can be invoked for any copyright work. In the UK fair dealing only applies in limited circumstances.

The recent Digital Millennium Copying Act makes it illegal to bypass copy protection for any reason. This is broadly compareable to the EU’s Copyright Directive which has already been ratified in Denmark, Italy, Austria Germany and the UK.

 

Germany - Law on Author’s Right and Related Protection Rights

German Economic Rights for authors principally include exclusive rights of reproduction, adaptation, distribution, communnication to the public. There is a seperate catergpory rights for performers, phonogram producers and broadcasters.

German Moral Rights include divulgation, retraction and attribution and integrity rights for authors of works protected as intellectual creations. There are special provsions for films which only prohibit gross distortions or other gross mutilations of their work - Art 93.

German authors have an author’s right comprised of moral and economic rights (under the monist system) Comparatively few terms are defined in the 1965 law compared to the US and UK. These are based on the concept of the authors rights as springing from the "individual personality of the author". Therefore there is a strict division between the authors rights and the related rights of performers, sound recordings and film producers etc.

German law doesn’t specify who the authors of a film are but it does set out that any person who under takes to participate shall be deemed in cases of doubt to have granted to the producer and exclusive right to use the film work. According to jurisprudence the people considered to be the authors of a film are the director, the cameraman and the editor.

German authors do have moral rights, but the right of intergrity is limited to prohibiting any distortion (Entstellung) or other mutilation which jepordises their legitmate intellectual or personal interest in the work. An objective approach is used - Art 14. Performers also have moral rights to prohibit distortions which jeopardize their standing or reputation. Art 83.

German broadcasters are required to invest in co-productions, film project funding and advertising airtime under the German Federal Film (FFA) board's film and television agreement. Regional film funds have also welcomed broadcasters as financial partners and more than half of local German features are co-productions with a public or private broadcasters. Including Medeinboard Berlin-Branenburg, FFF Bayern and Filmstiftung NRW.

France - Law on the Intellectual Property Code

French Economic Rights - principally exclusive rights of reproduction, adaptation distribution, comminication to the public. Seperate category rights for performers phonogram producers, broadcasters.

French Moral Rights include divulgation, retraction, attribution and integrity rights for authors of "works of the mind". The right of attribution - the paternity right and the integrity right are perpetucal, innalienable and imprescriptible and as a genral rule cannot be vaived.

The author has moral and economic rights in works of the mind (“dualist “system). Based on protecting creative and artistic rights. Comparatively few terms are defined in the 1992 code compared to the US and UK.

The individual author is the initial owner of the authors rights. In audiovisual works, the basic rule is the natual persons who carried out the intellectual creation are the authors. The beneficaries of protection are authors of works of the mind; performers, phonogram producers and broadcasting organisations.

The following are assumed to be joint authors of a film unless proved otherwise: the scriptwriter, the writer of the adaptation, the author of the dialogue, the author of the musical composition with or with out dialogue and the director. They aslo assimilate the authors of any pre-existing work or script e.g the novel on which it is based. Art L 113-7

Again there is an automatic assumption that the authors assign to the producer the exclusive exploitation rights in the audovisual work Art L 132-24

France's film and television industries have strong traditional ties, with French broadcasters licences being dependant on investment in French film production. Arte, TFI, M6, France 2 and France 3 all have their own film departments which coproduce within France as well as internationally. Canal Plus and TPS are merging their satelitte platforms and will contine to re-invest annual revenues into producing french films.

Film financing and banking arrangements tend to be less paper orientated than in the UK. For example a UK bank will list 50 - 60 conditions precedent all of which need to be documented before the money will be cashflowed. Whereas in France many transactions are based on personal relationships and trust without the same dependance on legal documentation.
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Chain of Title - the layers of protected copyright involved in film production

To be able to economically exploit your completed film you will need to be able to prove the paper trail of the 'Chain of Title' so that the rights can be licensed commercially.

All the contracts and copyright relate to the Chain of Title.
- The Chain of Title covers all agreements relating to all the separate copyrights including all the underlying rights in the production.
- Film and television are defined in the UK Copyright act as film which covers moving images.
- Film Directors and Producers are recognised as co-authors in the completed film.

The Layers of protected copyright involved in film production (AKA the underlying rights)

Literary works
- pre exisitng novel

Dramatic work
- script(s)

Musical works
- pre-exisitng music
- comissioned music

Artisitc works
- set desgn
- costumes

Performances
- actor performances
- musical performances (in pre-existing music)
- musical performances (in commissioned music)

Sound recording
- of pre-exisitng music

Film
-e.g. special effects

How contracts and copyright work together
Of course © never operates in isolation - it’s usually a contractual issue and the underlying rights should be transfered in writing to the production company making the film.

While copyright protection is automatic,
•assignments and licences must be in writing.
•Waivers must be in writing.
•Moral rights need to be asserted

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Some common industry terms

360 degree commissioning: Commissioning across multiple platforms at the same time. Used by the BBC to describe the need for multi-platform content creation rather than commissioning just one programme at one time.

Ancillary: Originally used to describe anything outside the main "domestic theatrical market" (outside the North American theatrical market), and this included the "international market" as well as other types of exploitation (which until relatively recently was seen as a smaller additional market). Sometimes also used to describe the DVD market and or the new digital platforms. Theatrical box office revenues still make up the majority of a flims revenue, with ancillaries bringing in around 20 -30% of a films revenues.

Assignments: When the copyright owner transfers all the ownership of copyright to someone else. Partial assignments are permitted e.g for "periods of time" and "geographical territories"

Blue-ray DVD. A recent format competing with HD DVD. For example Sony's "Spider-Man 3" will be available only Blue-ray DVD and not on HD DVD.

Budget: Various meanings depending on the context, medium and genre.
In the UK, a feature top sheet budget refers to all the production expenditure, which broken down into “above the line” talent costs and below the line costs.
Micro-budgets generally means up to £500, 000 Low budgets under £1 to 1.2m and Medium budgets up to £3-5m

Blanket Licence: A licence covering a set use without the need to obtain further permission
e.g. BBC Public Service Video On demand use will be covered by the BBC’s blanket agreement with Equity.
The BBC agreed a blanket licence with Equity to cover certain uses on their public services for originations and repeats for a one year period. Also covers indies supplying programmes to the BBC.

Buy outs: This describes a one off fee which acquires all rights in the material across all media in perpetuity. Typically by way of an....Assignment

Clips for promotional websites: These are generally intended to generate publicity but you should be able to use them on your own website.

Contracts Rights Renewal, CRR: A contractual term imposed on ITV which gives advertisers and media buyers the right to renew their contracts with ITV on a rolling annual basis, adjusted for changes in audiences, with no reduction in the discounts they receive. Overseen by an independent adjudicator and set up by the Competition Commission, it's designed to ensure they're are no worse off following the merger of Carlton and Granada in 2003. The automatic ‘ratchet’ reduces the amount advertisers have to commit if ITV’s audience shrinks.

Creative Commons: A flexible licence which encourages copyright owners to share their work. Basically it enables creators to keep their copyright but allows others to copy and distribute the work providing the creator is credited. Users need to decide whether to offer their work with no conditions for the public domain, or to impose conditions such as not allowing any commercial exploitation, or not allowing any modifications, limiting territories etc.

D2C: Direct to consumer

Deferrals: This can cover both real deferred payments as well as fantasy payments that will never ever happen. If deferred payments are to be used the contracts should specify how deferments are to be calculated and when they are to be paid out in relation to money coming in.

Digital Rights Management, DRM: A system of managing rights in a digital format. Usually used to refer to digital formats that have in built anti-copying protection. A content protection measure which restricts the number of private copies a consumer can make. DRM technology is at an early stage and the EC and other jurisdictions are still debating new rules.

Digital Terrestrial Television, DTT: The terrestrial channels which are BBC1 BBC2 ITV Channel 4 and Channel 5 being broadcast via analogue are also being broadcast digitally.

DMB: Digital Multimedia Broadcasting. A new mobile media format where consumers get real-time broadcasts and pay-per-view service.

DTO: Downloads To-Own. Where a consumer pays to retain a copy of a downloaded conntent. Also known as "ELS"'s "Electronic Sell Throughs" and at the BBC as CDR's "Commercial Download Rights."

DVD: A term for digital video disc or digital versitle disc which stores material on an optical disc. Distributors selling DVD's will frequently take a flat fee or a profit share depending on the volume of unit sales.

Electronic-sell-throughs - ELS: Also known as down-loads to-own. Includes purchasing works on-line, and on demand covering individual sales.

Freeview: Free digital television.

Format shifting: Making content in one format available in another format. Illegal in some jurisdictions e.g. in the UK cannot legally download a music track from a CD to put it on an ipod. The Gower IP Review has recomended the UK introduces a limited private copying exception for format shifting works.

G2: Mobile devices which allow for the equivalent connection speed of a dail up modem. Still used by most European scubcribers. AKA (also known as) GSM Global system for mobile communications:

G3: Mobile devices which allow for the equivalent broadband connection speed. AKA (also known as) UMTS universal moblie telecommunications system. After an initially slow take up rate when launched in 2003 now growing expotentially. . Also see GSM.

GSM Global system for mobile communications: AKA (also known as) G2 devices which allow for the equivalent connection speed of a dail up modem. Also see G3

HD-DVD A recent DVD format competing with Blue Ray DVD. For example Viacom's Paramount and DreamWorks Animation have recently announced they will exclusively back the HD-DVD format for the release of HD movies on optical disc and Universal's "The Bourne Ultimatum" is only released on HD-DVD.

Interactive programme websites: Another potential revenue stream, subject to negotiation with revenue being split depending on how it’s been set up and financed.

Intellectual Property Rights -IPR's: A very general term covering copyright, trademarks and patents.

IPTV (internet protocol TV): Allows programmes to be delivered live or on demand over an internet broadband connection, to TV (not PC) via a set-top box or on various platforms including potentially mobiles and games consoles. There's no agreed international standard yet for access or for digital-rights management. The market is also geographically fragmented depending on whether it's deployed by cable, satellite or terrestrial broadcast and by regional differences in digital-TV requirements. So while standard-definition TV may be sufficient in some areas, other regions will require HDTV. Still at an early stage of being developed available bandwidth and data rates also vary among DSL infrastructures.

Internet on-line distribution rights: Traditionally granted to a broadcaster. Holdback until 1st terrestrial transmission.+ simultaneous web-casting on co-financiers television service. Maybe main financier gets the 1st online transmission or all agree to split revenues as per % finance.

Licences: Basically a license is permission to do a act which is prohibited without the permission of the copyright holder. When the copyright owner licences certain rights for a fixed term and the licence can be revoked and the rights revert back to the copyright holder in specific circumstances. You can have exclusive and non-exclusive licences. An exclusive licence is an agreement authorising the licensee to the exclusion of all other persons, including the person granting the license, to exercise a right which would otherwise be exercisable by the copyright owner.

Long Tail: Products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current blockbusters.

Minimum guarantee: An advance on the anticipated revenues gererated in a specific territory for a sepcific time period put up by a distributor.

Multi-platform: Utilising content across different kinds of platforms for potentially different kinds of audiences. This can include simultaneously shooting the same content in different ways to utilise it across different platforms.

NVOD: Near Video On Demand. e.g. pay per view films with staggered start times.

New Media Rights: Include on line, on demand and interactive rights (including SMS).

Non Simultaneous web-casting: Normally this covers any webcasting that is not within the primary right e.g. commercial, video on demand or on-line pay tv or non-commercial catch up.

OTT TV: Over the top television services: The delivery of video via the internet directly to users connected devices, allows access to services anywhere, any time on any device. Technological problems are being resolved relating to general platform and system integration issues, including bandwith and transferring content between devices. Current OTT suppliers include Hulu and Netflix accessing mostly library content rather than live services such as sport and news.

PPV: Pay-per-view. A distributor will currently take a minimum guarantee and residuals as well as a flat fee on the remainder.

Pay TV: Subscription based, usually allowing a mix of channels and content which can be bundled or unbundled depending on the package, e.g. Sky+.

Premium rate phone lines: An example of generating revenue from other platforms. OFCOM sets out conditions, the body overseeing the former ITC Programme Code.

Primary rights: This can mean different things in different circumstances e.g. Primary rights can mean “UK terrestrial television rights” or even “worldwide televisions rights” so you need to be clear which definition is intended.

Points: Definitions vary considerably "What ever I want it to mean" - e.g. for writer & producer to share in profits, the agreement will need to specify whether percentage points are calculated from either gross or net profits; and exactly how those are defined; as well as how and producers net profits are defined.
In practice quite often both parties will agree that whatever term is used, it is defined as being the same definition as used the in all the principal financing and distribution documents - to make it all consistent.

Public Service Uses: Any services provided by the BBC in any media and on any platform that are funded by the licence fee in accordance with the BBC Charter.

PVR's: Personal Video recorders e.g. HDD recorders with Freeview

Renumeration: Rates of pay for freelancers depends on the employment market place, the market for the project your working on and to a lessor extent the overall budget. BECTU issues a schedule of recommended rates for different grades and roles within the industry.

Residuals: The amount of royalties will be directly related to the copyrights holder’s original fee with payments being calculated as a percentage.

Royalties: The amount of royalties will be directly related to the income generated as payments are calculated as a percentage either of the sale price or of the net income arising from sales of the work.

Secondary rights: Again there is no precise or standard definition. Generally they can cover publishing, merchandising and soundtrack rights i.e apart from the right to exploit the actual programme. Secondary rights aka Ancillary rights, territory rights or spin off rights.

Simultaneous web-casting: Normally these are within the primary rights definitions in standard production contracts.

Streaming Media: Media which is delivered to any IP device which plays constantly from a server without being permanently downloaded.

Terms of trade: In UK television refers to the current terms of trade and the codes of practice for independent producers which Pact negotiated with the UK's terrestrial broadcasters in 2006. Covers UK’s terrestrial television and new media rights. All new commissions are under the new terms of trade and independent producers retain rights unless they explicitly sell them. The terms include a new emphasis on the separation of rights & transparency, and a tariff of prices has been published by each of the terrestrial broadcasters for each genre.

TVOBB: Television over broadband.

UGC User-generated content: This has been around for years, but it is only relatively recently that it has increased exponentially - and now anyone is able to distribute the content they have made themselves. Including blogs, webcam footage, photos and clips shot on mobiles and shared with the online community. AKA viewer-created content.

UMTS universal moblie telecommunications system: Mobile devices which allow for the equivalent broadband connection speed . AKA (also known as) G3. After an initially slow take up rate when launched in 2003 now growing expotentially. Also see GSM.

VC²: Stands for viewer-created content. AKA UGC.

VOD: Video on demand. Where the consumer can watch content on demand at any time. Also see Near Video On Demand.

VOIP: Voice Over Internet Protocol. A phone service via a broadband connection. Now widespread in many countries.

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DISCLAIMER

Author’s notice. These frequeently asked questions and answes have been prepared as an introductory guide to some aspects of copyright for general information only as background reading. It is not intended to provide legal advice. The author cannot be held responsible for any losses or claims howsoever arising from its use or reproduction.

Malcolm Moore, as author of this work asserts his moral rights in accordance with sections 77 to 80 of the Copyright, Designs and Patents Act 1988.

© Malcolm Moore All Rights Reserved 2006 -2010