Digital, Social Media, OTT Players Should Play the Long Game, and Stop Unnecessarily Exploiting Content Creators

By: Steven Masur and Ilana Faibish

Significant revenue is driven by artists, entertainers, and content creators who become recognizable personalities in their own right. But most of the time, these talented people do not actually own the rights to the content they create. Just like the early 1950s rock-n-rollers assigning the rights to their music for the price of a Cadillac, or the WFF owning the rights to WFF character names, the content creator exploitation game has once again become the standard modus operandi for digital media, social media, and OTT platforms, with new ad-supported media companies offering shiny baubles to content creator/brand personalities in exchange for their rights, including audience platform, studio resources, recognition, and stability in exchange for ownership of the content and personalities these talented people create.

Exploiting the Talent

Many new content creators are young, unrepresented, lack experience negotiating contracts, and have little to no leverage.  As a result, they are susceptible to being exploited.  For the most part, they just take what they are handed, and in many cases are afraid to engage counsel for fear of losing their positions. Vlogs, podcasts, social media, Youtube, and digital platform channels are relatively new opportunities in the media business.  There is little to no regulatory oversight. So as a whole, these companies negotiate such opportunities through general employment or independent contractor agreements in which ownership and exclusivity over licensing, platforms, and the overall intellectual property is presented as non-negotiable. For example, in 2016, a slew of Buzzfeed Video employees left the company to become full-time YouTubers, primarily because they felt exploited and disposable, without any path toward career growth.  Their employment contracts included stringent career restrictions on the content they could create, the ownership of that content, the ability to engage in other career-defining work, or even the ability to mention their involvement in developing their own work.  So having left Buzzfeed, these content creators had to start from scratch, after already having created substantial content, followings, and in some cases fully-fledged brands for BuzzFeed.  BuzzFeed employees caught helping them were summarily fired.  In these new-age sweatshops, the bargaining power from the beginning of employment is inherently, and systemically unequal.  However, if content creators were treated as talent, and contracts were negotiated through the lens of talent agreements, more sustainable, long term, mutually beneficial relationships could be created. 

As long as content creators are treated as at-will employees rather than talent, tension between media companies and content creators will continue and will escalate.

The Best Talent will be Attracted to the Companies that Offer the Best Incentives for Success

By definition, once a content creator is successful in building subscribers and a following, bargaining power will shift toward that creator.  If the content creator’s incentives are not clearly laid out upfront, it will create unnecessary tension each and every time a show is successful.  For example, Alexandra Cooper and Sofia Franklyn’s “Call Her Daddy” contract with Barstool Sports began with $70,000 each, plus bonuses.  Not bad pay for two previously unknown creators. But the podcast garnered over two million downloads in just two months and catapulted the co-hosts to fame, allowing them to accumulate close to a million followers on each of their individual Instagram accounts.  Needless to say, given their at-will relationships with Barstool,  this created tension between Barstool and the two co-hosts as they learned that from a talent perspective, they were being grossly undervalued and could not leave Barstool without also leaving behind “Call Her Daddy,” the primary reason for their fame on Instagram.  To its credit, Barstool was willing to offer the co-hosts a guaranteed $500,000 each, increase in merchandise profits and bonuses, and shorten their three-year contract by six months. Barstool was even willing to give them the intellectual property rights to “Call Her Daddy,” after their contract with Barstool expired.  The offer was generous, given what Barstool might otherwise have offered, and what most other companies would have offered, under the terms of the original boilerplate signed by Ms. Cooper and Ms. Franklin.  The example shows what media companies should be doing in order to attract top talent. Although there was disagreement between the co-hosts as to whether to accept this deal, the offer happened because of the shift in bargaining power as a result of social capital accumulated, from the hard work of the talent.  The disruptive, expensive, and difficult negotiation could have been avoided if, earlier in the relationship, the co-hosts had been able to enter into a co-hosting agreement with each other, and a talent agreement with Barstool laying out potential payouts if they created a successful show.  So instead of starting from a pointlessly exploitative place, if Barstool’s starting point were an agreement that acknowledged the direct relationship between the talent’s social capital and the show’s success, Barstool would attract the best talent to itself from the beginning, and also spend less money paying lawyers to sort out the mess, every time a show is successful.  Alexandra Cooper’s full video describing the negotiation is highly entertaining and instructive to anyone in the process of negotiating a talent deal.

Media Companies Should get Ahead of the Game 

Currently, media company lawyers draft overly exploitative agreements with talent because they figure that starting from the most aggressive bargaining position will get the best deal for their client, the media company.  But in actuality, fair negotiations with talent may actually be mutually beneficial. The inevitable increase of followers and subscribers some brand personalities will experience should be perceived as valuable social capital considering how easily this audience can be monetized. Furthermore, the deal a media company could get early in the artist’s career is much better than they will get once the artist develops a huge following. Finally, media companies would benefit by creating longer, less disruptive, and more loyal relationships with their talent, who, regardless of who owns the content, ultimately control their following.  The inevitable tension between content creators and media companies is foreseeable, so media companies should get ahead of the game, and strive for better equity earlier in the relationship. Otherwise, the revolving door of talent will continue, and media companies will continue to sacrifice highly valuable audience and brand loyalty. Brands like Saturday Night Live and The Tonight Show created giant audiences and enormous lasting value for shareholders, celebrities, and lower-level content creators alike, while post-internet media brands go down with alarming regularity and are quickly forgotten. As new media properties move past adolescence and into maturity, they should take better note of the lessons to be learned from those who went before.

* Steven Masur is one of the first digital media attorneys and has spent the last 25 years negotiating agreements in the entertainment and digital technology arenas.  He has negotiated a wide variety of talent agreements in music, film, television, OTT, social media, eGaming, and professional sports.  In addition, Steve has helped a wide variety of early and contemporary digital media, mobile, AdTech, and network effect companies develop their licensing and business models and build substantial businesses.