Why Exclusivity is GOOD for Filmmakers
In closing contracts, one question I get asked a lot is why distributors, sales agents, and producer’s reps need exclusivity when we do our jobs. Sometimes, this question even comes from the lawyers of my clients. I understand there is risk when giving someone the exclusive right to represent your project, so I thought I would write up a blog post examining exactly why we need exclusivity. Generally speaking, the goal is not to tie up your rights and make it so you can’t do anything with them. There are lots of other reasons why sales agents or producer’s reps need exclusivity.
To truly understand the need for exclusivity, one must first understand the nature of our business. We deal in the buying and selling of rights to infinitely replicate content. If something can be infinitely replicated, the only way to ensure it's value is to control who has the right to produce it, or to authorize others to replicate the content.
I can guarantee you that any sales agent you would actually want to work with will require exclusivity at least for international. If you try to negotiate their exclusivity out of a contract, I can guarantee you will not be successful. It's the nature of the business. In fact, if you try to negotiate too much to be non-exclusive, then you’ll likely just end up scaring off the sales agent.
Buyers want exclusivity, and if the sales agency doesn't have exclusivity, then they can't sell it to the buyer. Producer's reps have less necessity for this normally, but if they work directly with domestic buyers, then they will generally need exclusive rights for similar reasons to why a sales agent needs exclusivity to sell international rights.
As a more practical example, let's say that two sales agents each have the right to sell your film. There are a lot of territories for which only a few buyers come to the market. There's a good chance that the sales agents would both know these buyers. If the buyer can buy it in one of two places, then the two sales agents will just undercut each other to make the sale, and the filmmaker ends up hurt. Giving Sales Agents exclusivity actually protects the filmmaker, if the deal is done properly.
Further, almost all license fees and deals with a minimum guarantee require exclusivity. The buyer doesn't want to pay good money for a film, only to have it air on the competition's channel or platform at the same time. Of course, if you're looking at Transactional VOD, this is not really the case, but those deals generally don't pay up front. Also, that's essentially an aggregation deal.
I'll admit, a producer's rep needs exclusivity less than a sales agent. Since most of what Producer’s Reps do often involves shopping the film to sales agents, so long as there's a lit of who I'm approaching that's separate from who you would be approaching, there's room to negotiate. However, since I act as a sales agent for North America, I at least need exclusive rights domestically for exactly the same reason.
Also, to avoid issues, if you’re working with a producer’s rep non-exclusively, then you’ll need to list what companies that producer’s rep will handle. If you don’t, you could be in for a tricky legal battle down the line, in case multiple approaches are made to the same company.
So I’d like to thank you for reading and say that I hope you found it helpful. If you did, you should grab my FREE Film Business Resource Package. It’s got a free e-book called The Entrepreneurial Producer to grow your filmmaking career, templates for investment decks, film festival brochures, and other money and time-saving resources. Check it out below.
