Tuesday 23 June 2009

Why pay for TV formats?

Edward Humphreys has kindly provided the following report for the 1709 blog. Edward is a lecturer and researcher at Jönköping International Business School, Sweden, writing a PhD thesis on the subject of legal protection of TV formats, comparing the UK and Swedish positions by reference to international IP conventions.

Some 40 lawyers, media professionals and academics gathered at the offices of FremantleMedia in central London last Tuesday, to hear the results of research conducted by Bournemouth University and FremantleMedia on ‘The exploitation of television formats: intellectual property and non-law based strategies’ (previous post here).

The event, a so-called dissemination seminar, and the research were funded by the Economic & Social Research Council (ESRC), and sought to provide answers to the question, ‘why pay for a television format if you can re-create it for free?’ The aim was to understand the effect of the – at best – uncertain legal protection for formats on the UK’s creative industries, and to see whether lessons can be learned for other industries.

The researchers from Bournemouth – Professor Martin Kretschmer and lead researcher Sukhpreet Singh from the University’s Centre for Intellectual Property Policy and Management, and Jonathan Wardle, director of its Centre for Excellence in Media Practice – have over the past three years been examining 59 different format disputes, as well as the exploitation strategies of format producers, in this latter regard cooperating closely with FremantleMedia and using case studies of some of their most successful formats.

Some of the many interesting findings they presented included the following:
  • 80% of the format disputes studied have involved claims for breach of copyright; other causes of action included contract and breach of confidence, but a mere 2% were based on passing off. Of the cases that made it to court (64%), half resulted in victory for the claimants and half for the defendants.
  • Although there are potential legal causes of action to protect formats, the apparent uncertainty of relying on such action has led to the development of additional, non-legal strategies, which it was suggested provide the answer to what is being paid for.
  • The three main strategies identified are: (1) formalising the sale of knowledge, by providing, for example, detailed production bibles and ‘flying producers’, sent in to local territories to assist with their format remakes; (2) brand management, including a carefully coordinated trade mark strategy based on consistent names and logos across different territories; and (3) what was referred to as social and distribution networks – essentially the importance for success of speed to market (staying ahead of the game by making a establishing successful programmes in different territories before the copycats can take advantage), and the notion that producers/developers are so dependent on one another within a small market that they need to respect the rules of the game to maintain their reputation and ensure future sales.
  • Tactics to back this up should include the use of ‘deterrent letters’ to possible copycats. This latter practice was specifically mentioned by FremantleMedia as a way of encouraging broadcasters who might stray to an unlicensed but similar format to consider the detrimental impact on their ability to license in future, more popular FremantleMedia formats: to ‘be big’, it was pointed out, makes this strategy all the more effective.
All of the research referred to at the seminar, including the various video interviews and case studies, not to mention a 138-item-long reference list, can be accessed via a smart and professional sub-site of the Bournemouth University website, here. Sukhpreet Singh’s soon-to-be-completed PhD thesis will provide a detailed examination of the results and findings.

Hugo was also at the seminar and wondered whether there might be some potential competition law issues: abuse of a dominant position and concerted practices under Articles 82 and 81 EC? On the one hand, Fremantle revealed a substantial market share and said that deterrent letters were sent when it was known that there may not be a viable claim (thus exploiting the uncertainty of the copyright position). On the other hand, the industry appears to be colluding to alienate any company that doesn't play by the rules – ‘it is hard to sustain the role of outcast’. It would be very interesting to hear a Fremantle perspective on this.

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