Seven Things About Licensing Every Content Buyer Should Know

If you create content for TV, films, ads, documentaries, newscasts, sportscasts, or anything else that might use third-party audio or video clips, then you know how important it is to be able to license that material. Film studios, television networks, production companies, digital media platforms, advertising agencies, post houses, they all regularly seek the rights to content that will help them tell their stories.

Obtaining licensing rights can be an involved process, especially when buying rights-managed content, so we asked one of our licensing experts, Jay Bailey, to share some wisdom. Jay has been our vice president of TV and film licensing for nearly a decade, so he knows a thing or two about this topic.

Here’s what he had to say.

1. What does “rights managed” mean?

When licensing content, essentially you will be working with two categories of content — rights managed or royalty free. With rights-managed content, you are purchasing a license to content for a one-time, specific use, which is detailed in the license issued to you by either the copyright holder or its third-party representative. For example, say you’ve found a rights-managed clip — let’s call it Clip A — that you’d like to license for your project, a TV series. The series will air only on broadcast TV in the U.S. over the course of a year. Those parameters would be spelled out in the license: Clip A would be under license for broadcast television, nationally, for up to one year.

In the case of royalty-free content, you are purchasing a license to the clip for a flat fee, and there are far fewer restrictions. You are also often free to use the content multiple times across your project, or in some cases, across multiple projects.

2. What are the main steps to follow when buying licensing rights to premium content?

So you’ve found a clip that you’re particularly fond of and hope to feature it in your project. What do you do next?

The first step is to determine who the copyright holder is and who manages the licensing requests. Some organizations will handle licensing requests in-house, while others retain a third party like Veritone. If a third party is involved, you often will find that information through a browser search or on the company’s website.

After you have located who can help with your request, it’s a matter of determining what license you will need. There are a variety of licenses available to you. In picking the right license, you should be able to answer three simple questions: 1) How long will you need to license the content? 2) Where, in terms of geography, do you intend to distribute your project? 3) How will you distribute your project? The answers to those questions help establish what’s often referred to in the industry as “term, territory, and usage” — the three factors that will determine the type of license and the applicable fees. If you can answer those questions, you are well on your way to licensing that compelling moment you found to complete your narrative!

After you have determined the right kind of license, you might have to get project approval. Owners of premium media collections tend to want to know how their content will be featured within your project. Along with the term, territory, and usage of the preferred license rights you are seeking, the copyright holder or third party might ask for some additional information. For example, you might need to provide a project summary, which will give the owner or rep a better idea of what your project is about. Owners might also ask for “context of use,” which explains how their content will be featured in a specific scene. The more information you can provide, the better, and the quicker you will get a response.

3. What are the different types of licenses for video?

When licensing video content, requests fall under specific categories: entertainment, documentaries, advertising, corporate use, and education. Within those categories, rights holders can issue a variety of licenses. Again, the kind of license will depend upon “term, territory, and usage.” For example, within the entertainment category alone, you could have licenses for a television series, a feature film, a digital series, or a trailer.

4. What determines the cost of a clip or a video?

A couple key factors come into play. The first is the nature of the content you are looking to license. Certain media collections contain some of the most memorable moments in the world of news and sports. The content is truly unique and can often play a key role in driving your narrative. If you are looking to license these kinds of moments, it only makes sense that the fees will be higher than for other kinds of content.

The second factor is the rights you are looking to obtain, which relates back to term, territory, and usage. A good rule of thumb is this: The more people who might see your project, the more expensive the license will be. For example, a license for a feature film that will run in theaters — and eventually on a digital platform — all around the world for years to come is going to be much more expensive than a license for a film that is only going to appear at a few film festivals.

5. What do buyers need to know about working directly with a rights holder versus working with a third-party licensing agent like Veritone?

You will certainly come across both scenarios. Some rights holders prefer to keep the process in-house and manage the requests on their own. Many major sports leagues such as the NFL and MLB have chosen this path. Other entities such as the NCAA will rely on a third party. Hopefully both will be attentive to your needs. Traditionally obtaining a license directly from a rights holder can take longer than if you are working with a third party. That’s because the rights holder is busy tending to its first order of business — producing long-form content, most likely. In the case of news, that means creating a morning and evening news program to inform the public. In sports, it could mean producing a popular tournament that is being distributed all over the world. Those goals will more than likely take precedence over licensing content for your project. Having a third party involved should speed up the process because there’s a team whose primary focus is to license its partner’s content to prospective creatives. 

6. What are some common hurdles creatives face when licensing content?

There are a couple things to keep in mind that can create hurdles during production if you don’t account for them: time and cost.

Time is always a concern. Often creatives who wish to license a clip are under pressure to deliver a master within a very tight time frame. Traditionally, rights holders have a strict rule that they will not deliver content until the project has been approved. Getting those approvals can sometimes require a bit of time, as multiple parties must review the project. If you haven’t allowed time in the production schedule for the licensing process, you could find yourself in a pinch. In our experience as a third-party manager, we have seen this scenario quite a bit. The lesson? As soon as you know a clip will be part of the final edit, it’s a good idea to get the approval process going right away! 

Pricing is another factor to consider. We all work within budgetary constraints. On occasion, producers and other creatives will underestimate the fees for licensing, specifically for premium content. If you wait until the end of post-production to license third-party content, then you could encounter unexpected licensing fees that are a real hit to the budget. A better practice is to contact the rights holder during preproduction so you can determine the fees up front and account for them in your budget. Better to find out the cost while you have options rather than be surprised during the final stages!

7. A word of caution: Just because you’ve got the rights to something doesn’t mean you can use it everywhere and forever.

This goes back to our conversation about rights-managed content. A common misconception is that once you purchase a segment of content, you can use it any way you see fit. But in reality, when you secure a license, it gives you the right to feature that content only in a specific way. That’s why it’s important that whoever grants you the license is explicit about what the license covers.

One area that often can create confusion is promotional use. In some cases, when you license a specific moment, the license will also include a provision for “in-context promotion.” If so, you are allowed to feature the content in a promotion as long as you are not changing the context in which the content was originally licensed. Be aware though that many premium content libraries will not automatically grant in-context promotion. Many rights holders are sensitive to having their content used to promote your project. To be safe, always inquire if the license includes in-context promotion. If it is not included, you may be able to get an additional license for promotion from the copyright holder.

Licensing clips for your projects doesn’t have to be daunting. Understanding how it works, being prepared, and knowing the pitfalls can go a long way toward a smooth licensing process.

Go here to learn more about Veritone’s full-service licensing offerings for content buyers and rights holders.