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Contracts Often Lag New Revenue Streams

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I’ve been – vaguely and not with any great interest – anticipating a story like this:

Scarlett Johansson sues Walt Disney over Marvel’s Black Widow release
Actress could lose out on up to $50m after the film was released on the streaming service Disney+ at the same time as the box office

The thing being that the search for new revenue sources does tend to advance faster than the contractual arrangements of who gets which part of that new revenue.

The first bit is that the movies are a tournament business. The big, big, stars who can green light a movie are few and far between. It is as with the football business therefore, left alone and static all the revenue and more will end up going to those stars, players. In order for the capitalists to make their nut it’s necessary for there to be some countervailing factor.

American sports do this by being a cartel. The movie business – and to a lesser extent the music one – does it through technological change.

Over the decades we’ve seen theatre releases, then TV showings, then video, then DVD, and now streaming. Each has acted as a new revenue source for the industry. Cool. But all the contracts about who gets what have been based upon the previous set up of revenue streams.

Sometimes this goes a bit awry, as say music rights were not initially properly nailed down and so some things cannot be released – or it would be too expensive to do so – in the new formats. But more often we find that those with the cool deals for a good portion of the revenue in those contracts based upon last decade reality don’t gain much from the new sets of revenue streams.

Because they’re not mentioned in the contracts, d’ye see. The opposite, that is, from the Dawn French scene in Spinal Tap where they’re asked to sign the rights away to revenues from plays in Uranus or wherever it is. Unknown as yet revenue streams aren’t in the contracts. So, when they become known they trend towards the capitalists as there’s no contractual obligation to pass them on.

This has happened with every such sea change. And it’s happening again now, of course.

The deal was for profits from the movie. But those profits will be listed, enumerated. Those that aren’t don’t get shared.

Once everyone realises that the revenue stream is there of course all future contracts contain them. It’s just those in the transition who find themselves wondering why the hell their cheque is $1.23 on a $20 million release……

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