Behind the Scenes w/ David Brown - Negotiate your talent SVOD bonuses upfront.
Behind the Scenes: Why You Need to Nail Down SVOD Bonuses Before Signing on the Dotted Line
Ever been so excited to close a deal that you skimped on the fine print? You're not alone. But glossing over crucial details can lead to major headaches down the road. This is especially true when it comes to negotiating SVOD (Streaming Video On Demand) bonuses in talent contracts. To protect your position, you need to negotiate those bonuses before finalizing contracts.
The SVOD Bonus Trap: A Producer's Cautionary Tale
What exactly are SVOD bonuses? In today's streaming-dominated entertainment industry, they're increasingly important. An SVOD bonus is a payment made to talent when a film or show is released on a streaming platform. As a film producer, David Brown, also known as Dave Brown, has learned a thing or two about the importance of getting these details right. You can find out more about him on his website or check out his work, including The Fallout.
In one instance, an actor's SVOD bonus negotiation went sideways. The initial agreement included this language: "ES spot bonus to be negotiated in good faith later" with a $100,000 floor. Sounds reasonable, right? Not so fast.
The problem? An outdated mindset clashed with the realities of streaming deals. The old way of thinking was this: "Oh, it's a streaming bonus, so I can bypass it by showing it in a theater." However, agencies have become smarter. They're offsetting that approach by adding non-theatrical release bonuses.
The risk here is real: leaving SVOD bonus language open for later negotiation can leave you "over a barrel." It seems like a minor detail, but it can become a major sticking point. It's all about understanding the potential pitfalls.
Anatomy of a Negotiation Nightmare
What specific challenges did David face during that SVOD bonus negotiation? It's a story that highlights how things can quickly get complicated.
Initially, the assumption was that the $100,000 floor would be the standard during calculations. But that wasn't the case. During the negotiation call, several key players were involved: the attorney, the agent, and the manager.
It's important to remember that everyone has different incentives. The attorney gets a 5% commission on increased compensation, while the agent and manager each get a 10% commission. With those percentages in mind, the actor's team pushed for a $250,000 bonus. This was similar to what the director was getting. David's stance was firm: stick to the $100,000 floor based on the initial contract and upfront compensation.
However, here's where things got interesting. The actor's star power had increased significantly. She went from a "B-level/C-level nobody" to an "A-lister" in a short time. This gave her team leverage. The threat? Withholding press for the movie if the $250,000 bonus wasn't met. That would upset the streamer and hurt the film's chances of success.
This illustrates how external factors, like an actor's rising fame, can drastically change the negotiation landscape. Always factor that into your article.
Key Contractual Considerations
What specific advice can help you protect yourself? It all starts with the contract.
A common clause is the Availability Clause. It states that "promotional or press for the movie is going to be subject to professional availability down the line." This acts as a loophole for asking for more money.
The solution? Mandate 2-3 days of free press in the initial contract. This ensures a contractual obligation.
Here are some other essential clauses to include in talent contracts:
Mandatory press days
Specific deliverables (interviews, social media posts)
Consequences for non-compliance
These details matter. Addressing them upfront can save you a lot of trouble later.
Negotiation Tactics for SVOD Bonuses: A Step-by-Step Guide
How can you effectively negotiate SVOD bonuses upfront? These strategies can help.
Research: Know the current market rates for SVOD bonuses. Base them on the actor's level and the project's scope.
Define metrics: Clearly define what triggers the SVOD bonus. Examples include number of streams, viewership hours, and critical acclaim.
Fixed compensation: Negotiate a fixed bonus amount before signing the contract.
Avoid "good faith" clauses: Steer clear of vague language that leaves room for later disputes.
Here's an example of an SVOD bonus clause:
"In addition to the actor's upfront compensation, the actor will receive a bonus of $[Amount] upon the film being available on a streaming service with at least [Number] subscribers."
Clarity is key. Make sure everything is clearly defined to avoid misunderstandings.
Lessons Learned: Avoiding the Pitfalls
What are the key takeaways from David's experience? It boils down to these points:
The cost of assumptions: Never assume that a "floor" is a guarantee.
The power of leverage: Recognize how an actor's star power can shift the balance of negotiation.
The importance of clarity: Always define terms and conditions upfront to avoid ambiguity.
If you're interested in film financing, you can explore resources like FMLendingLLC.
Conclusion
Negotiating SVOD bonuses upfront is essential. It can save you from potential headaches and unexpected costs. Learn from David's mistakes. Don't leave these crucial details to chance.