[PAML] Case study: Not Yet It's Difficult

NYID is a not-for-profit, project-funded company managed by a committee of self-elected officials. Traditionally work produced for and by the company is owned by NYID. Given the potential commercialisation of the documentary, NYID needed to determine royalty divisions for participants. The company maintained its collective/collaborative nature with all members paid the same base rate and additional remuneration based on time and input. Using the stakeholder structure as a base, NYID divided anticipated revenue through a system of shares. The documentary was shot specifically for camera, however, clearances had to be sought for the use of a number of third-party materials in the pre-existing footage the company intended to incorporate in the documentary. The acquisition of some material was abandoned either due to the difficulty in obtaining clearances or prohibitive costs.

Management overview

Under NYID's self-management model the artists are empowered to make their own decisions collectively. In this model company benefit directly equates to artist benefit. Collectives such as NYID are less bound by industry practice and union restrictions than major organisations or companies. Management practices are more autonomous and flexible and as a result allow for more rapid responses to opportunities that might otherwise require lengthy consultations with funding partners, sponsors and artists. NYID's management structure requires only majority support for a proposal from the representative committee. While the company may be financially disadvantaged compared with other annually funded companies the simple management style allows for quick response to opportunities with full support from the artists.

Limited resources keep administration levels at NYID to a minimum. Employment contracts are often verbal. The artists themselves carry out all funding submissions and acquittals. The PAML Pilot Project provided a steep learning curve for this small, project-funded company attempting to enter commercial territories. Historically all artists are contracted as "employees" and therefore all intellectual property rights rest with NYID incorporated. Royalty divisions are based on industry standards but commercial return from productions has been minimal.

The company's project required a number of elements from the theatrical season to be transposed into broadcast form. For this the company needed an extension on a number of clearances for third-party material used in the original theatrical production, such as an excerpt from David Williamson's The Club.

Given the potential commercialisation of the documentary, NYID decided to restructure the company for the purposes of the PAML Pilot Project. While retaining the collective/collaborative structure, hierarchical remuneration was introduced based on individual input. Two main areas of responsibility were defined in the documentary; the original theatrical season of The Austral/Asian Post Cartoon:Sports Edition and the documentary itself, ie filmmaking, performance etc.

Often participation overlapped in different areas, the result was that NYID defined the documentary with eight stakeholder categories:

Intellectual property

Traditionally NYID has ownership over work produced for and by the company. Decisions to remount productions are made exclusively by the elected officials (representing the company). This differs from assignment in a larger company structure where artists have no input into the use of the work once rights have been assigned. As NYID artists are members of the company they are still party to decisions regarding the recording.

Obtaining the rights

Primarily NYID focused its attention on acquiring third-party material for use in the documentary. NYID included a number of clips and music segments in the theatrical show, however permission for use was limited to the theatrical season. The rightsholders are often more inclined to offer excerpts of their work for theatre where box office returns are generally low. When the material is for broadcast purposes it can be a different story. The NYID project demonstrated that even the use of just 30 seconds of footage is prohibitive to most small to medium-sized companies.

Obtaining third-party clearances for additional material was arduous and highlighted some of the difficulties of copyright law. The following chart outlines the description of the third-party material and the required conditions. The high cost of television clips and music segments was often disproportionate to the weight of the segment in the documentary. For example, NYID wished to use a news clip in the documentary of Greg Ulfan, a performer with the company fighting in a boxing match. The original news clip played a Pointer Sisters' song behind the visuals. Separate copyright clearances were required for the footage, the sound recording (master rights) and the composition (publishing rights). The music clearances alone were quoted at $2000 for less than 30 seconds of sound played behind a news clip. The result was that NYID placed an alternative voiceover on the footage.

NYID's documentary included a number of pre-existing third-party materials used in the original season. Various clearances were required from rightsholders in these materials to allow their inclusion in the documentary which was intended for broadcast, broadband delivery and inclusion in a multimedia library. Seeking these clearances was time consuming and costly. The acquisition of some material was abandoned because of the difficulty in obtaining clearances for digital delivery. Without the appropriate clearances the material could not be distributed over the world wide Web, across broadband networks or archived in a digital performing arts multimedia library. These restrictions on media were too limiting for NYID.

NYID searched extensively yet unsuccessfully for the copyright owner of a crucial piece of film in the documentary. Rather than abandon the use of the work the company placed a "notice of good faith" in the end titles claiming the company had made all reasonable attempts to find the owners of the work and invited the owners to come forward to negotiate a settlement. The search for the rights holder was carefully documented and money from the budget was held in an account should the copyright owner/s make a claim against the company in the future. Technically it is still an infringement of copyright to use material without consent. As such this approach is not recommended. However this was a risk NYID was prepared to manage. Not obtaining all the clearances could also complicate the company's efforts to commercialise the product. The company is often required to warrant that all the clearances have been obtained when selling or licensing its product. NYID will not be able to give such a warranty for this documentary.

Royalty division

Using the stakeholder structure as a base NYID divided anticipated revenue through a system of shares. Those with the most significant contribution received between 20-25 shares and those who participated in creative development each received between 3-5 shares. The committee determined that revenue should be divided: 60 per cent to the stakeholders in the original theatrical season, and 40 per cent to the filmmaking participants. NYID was included in the share allocation and received company revenue (see categories marked * below).

The following percentage split evolved:

NYID stakeholder 'Share' allocation

NYID revenue distribution by Documentary and Existing NYID Work (NYID SE)

NYID individual revenue distribution for Documentary

Moral rights exploration

NYID did not explicitly recognise the right of integrity and attribution within the artists' contracts; it did however offer implicit assurances that would protect the work of the contributors. Since the company was able to accurately define the project (shot table, script etc) artists were fully aware of their role within the project and how they would be represented. All contributors were acknowledged in the project under the income division and in accreditation. Like all the case studies, contributors viewed the final product before release.

Management issues