
Rights management in the age of AI
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By Jean-Baptiste Babin, co-founder of Backup Media Group & Ceo of MovieChainer
Technology has opened new avenues for creators and brands to monetize content. However, rights and royalty management still face several challenges. Recently, stakeholders in the industry have been trying to navigate the new challenges caused by the impact of AI in content creation and compensation. In this article, we explore the key drivers of the evolution of royalty models in the film and TV industry.
Table of Contents
The distribution of content in the film and TV industry is highly fragmented. New approaches to content creation and distribution combined with copyright laws have made compensation more complex. As stakeholders grapple with these changes, royalty models are evolving to ensure efficiency in compensation.
Technological advancements in the film and TV industry coupled with changing market dynamics have introduced new dynamics and applications that require adjusting the existing royalty models. The emerging models aim to bridge the gap and ensure fair compensation among the key stakeholders:
Advancements in technology have transformed how content is created and consumed, giving rise to the Immerse Era in the film and TV industry. The quick growth of generative AI coupled with changing consumer habits has seen viewers now do more than just watch. While the implications of these new developments are diverse, the calculations of royalties and revenues across have become even more complex.
AI and virtual production have enhanced efficiency in content creation. For instance, virtual sets and real-time rendering save the cost of traveling to specific locations during film production. In addition, digital avatars, AI-generated videos, synthetic voices, and visuals are among the most prominent applications of AI in film production. However, Artificial Intelligence (AI) and Virtual production can be both innovative and disruptive.
In February 2024, TV and movie mogul, Tyler Perry halted $800M studio expansion over concerns about OpenAI’s content creation tool. Perry feared that AI advancements, particularly
Prompt: "Several giant wooly mammoths approach treading through a snowy meadow, their long wooly fur lightly blows in the wind as they walk, snow covered trees and dramatic snow capped mountains in the distance, mid afternoon light with wispy clouds and a sun high in the distance… pic.twitter.com/Um5CWI18nS
— OpenAI (@OpenAI) February 15, 2024
Sora's ability to generate realistic videos from text prompts, could significantly impact the film industry. He believed that this technology could potentially replace human actors and crew members, leading to job losses and disrupting the traditional filmmaking process.
As the use of AI and other virtual techniques become increasingly popular in the film industry, a major concern is in the management of the rights and royalties of content. Contentions often arise in:
As stakeholders in the industry navigate the question of copyright ownership and the right of human creators in AI-generated content, new royalty models are also emerging. AI can be used to help content creators, and also create its own original content independently. This raises the question of who owns the copyright of the AI-generated content.
Do we compensate the AI developer, the user who prompted the AI to generate the content, or the AI itself? Where does that leave the original content creator that inspired the AI model?
Immersive and interactive content has grown in popularity as more people are attracted to in-content interaction. This type of content allows viewers to lean in and actively participate in the content.
Research reveals that young adults spend more than half of their time in the media engaged in lean-in activities. With projections indicating a 20+% growth in this trend by 2030, media companies must be prepared to build up their capability to develop lean-in content, nonlinear storytelling, and real-time operations.
The main enablers of immersion include virtual reality (VR) and augmented reality (AR), which enable 360-degree storytelling. As viewers become fully immersed in the narrative, the lines between fiction and reality become blurry. This gives rise to several considerations for content creators:
As immersive content grows in popularity, content owners must be aware of the available immersive environments. In walled garden platforms, a company provides all the content and curates the user experience. The company also manages data and is responsible for mixing license and proprietary content to generate revenue through channels like subscriptions and ads.
In broad entertainment platforms, the company provides an open ecosystem that hosts content from various content producers. However, the owner maintains the technology infrastructure and controls all user data. The owner is also responsible for generating revenue through multiple streams, including creator fees and ads.
Due to differences in ownership, data capture, and content provider approaches, royalty models must consider all the players involved. This includes considerations for IP rights, revenue sharing, and royalty calculations to ensure fairness in compensation.
Content owners and companies are integrating sophisticated data analytics to accurately predict audience preferences. While this helps to refine content creation and marketing campaigns, it proper structuring of licenses and royalties.
Earlier royalty models have been straightforward on how compensation is made. For instance, tracking box office revenue was a key metric in compensating movies. In cable and network television, the number of subscriptions provided the numbers to calculate compensation. However, the newest content distribution channels like streaming video are complex without a clear way of calculating the numbers.
The attribution models used in streaming content are not effective either. While they provide granular data, inconsistencies in reporting make the number unreliable for calculating royalties. Tracking royalties becomes even more complex in immersive and interactive content. Since these types of content do not follow the traditional linear path of start to finish, certain questions arise in computing royalties:
Rights management tools can play a crucial role in taming the complexity of rights and royalties amidst all the technological advancements. They help content owners and distributors manage and track rights information to ensure compliance with licensing agreements and prevent unauthorized use of content. This is by providing:
Although entertainment deals are complex and technology is changing at a fast pace, a flexible platform for managing monetization avenues can help streamline the royalties process. By having experts handle rights and royalties, content companies can avoid failing to compensate creators as per their agreement terms. Rights management systems also guide content owners and distributors to adapt their strategies to capitalize on new opportunities.
Learn about new licensing models, collaborations with AI companies, and key considerations for... Read More