Concerning IP and Animation

My friend Keith runs a design and branding agency. He and I have known each other for a long time, we don’t argue about much but there’s one thing we disagree on; IP. Keith doesn’t charge for any IP on his work you see, he’s never even considered it. He supplies his finished designs, bills for his time and then moves on to the next project. 

I don’t run a branding studio, I run an illustration and animation production company, so although our businesses are apparently similar they are also very different. The talent that we represent expects us to charge usage on their work; as I regularly explain (to Keith mainly), if you commission an illustrator you are only paying for the rights to use their work, not buying the piece of art itself - which always belongs to the artist - unless of course you want to negotiate to buy that as well… but that’s a different story. Thankfully with the help of fine organisations such as the AOI, usage and buy outs are a well-defined and expected part of the illustration commissioning process.

But what about animation? Here we enter far muddier waters. The APA (God bless them) have produced some great guidelines as usual and approved contracts for us 'CAPCS' (commercial animated production companies) to use. These contracts state that the copyright in animation remains with the production company, SO only if the agency wants to do anything else with the elements created, is a separate fee applicable. So far so good then - for the production company. The animation/original piece is covered, the only negotiation is when and if the agency decides to use the animated elements elsewhere. Still with me? 

So here’s the muddy bit. As I’ve said, Jelly represents illustrators and very often our clients want us to animate their work. The freelance illustrator needs to be compensated for the IP use of their work BUT the production company can’t charge usage for that animation on delivery. The AOI “always advise a usage licence for illustration for animations. Depending on where the animation is being used it may be an in perpetuity licence". There’s a big disconnect here then, which is nearly always exacerbated by set budgets. Most projects now come with fixed, allocated budgets. So how do IP buyouts work alongside set budgets for animation then? (Plot spoiler; they don’t).

Illustrators, quite rightly, expect usage for their work but TV and motion content commissioners are just not used to paying that and in some cases are not even used to seeing it as a line item on an invoice or estimate. Animation production company producers that I have spoken to have admitted that this is a massive problem, with sometimes the production company having to pay and absorb the usage fees themselves. 

In the current market 'cheapest' usually wins and a usage discussion can not only affect budgets, it can also change the nature and goodwill of the relationship between production company and client. Inexperienced commissioners think that they are being fleeced. So what is the answer? How do Keith and I both go home happy and stop arguing? 

My current solution is an obvious one but hopefully a stop-gap. If a freelance illustrator is creating assets for a film, then put illustration usage into the estimate, even if the illustrative elements will only ever be used as part of the film, this forces the client to consider the implications and value of what the illustrator has added to the project. The line item may just have a nominal amount against it but it needs to be in there.

There is obviously a fair bit of post-rationalising to be done to achieve this, especially for set budgets but a usage fee needs to be shown. This is a relativity new area and it needs to be explored thoroughly by CAPCS - as well as agencies - to ensure that illustrators don’t continue to feel that their work has instantly less value when it is being created to animate. 

It feels to me that there is a far bigger discussion to be had here to avoid the erosion of illustrators rights… It is perhaps interesting to note that more and more design and animation studios are joining the APA as they realise that what they are creating needs to be licensed.

Obviously Keith and I will still continue to argue but at least I’ll be consistent.

Image Credit: Biff