Buy-out contracts: a dangerous threat to European creators

European music creators (composers, lyricists etc.) are being forced to forsake thousands of euros in future earnings by draconian ‘work made for hire’ (WMH) and buy-out contracts.

Online audiovisual services and broadcasters that are mainly US-based are forcing music creators to accept such contracts, which enforce a one-time payment in exchange for their rights.

Given the worldwide popularity of shows and series on platforms like Netflix, Amazon, Disney etc., and their replay value, the audiovisual market represents an important revenue stream for creators. Soundtracks alone are part and parcel of series and often attract a similar amount of popularity, massively boosting sales, streams and the worldwide fanbase of their authors.

Read below to find out how video on demand (VOD) platforms and broadcasters are circumventing EU law and what can be done about it.

 

 

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What exactly are WMH/buy-out contracts?

In the US, WMH refers to the mechanism under which the producer – rather than the creator – is the initial owner of the copyright in the work in exchange for a one-time fee. A total buy-out fee covers all services performed by the creator, as well as the future exploitations of the work.

Creators of works for films or series may be forced into accepting an upfront payment in exchange for their rights as a condition to be in the project.

Put simply, if a creator wants to work then they can only do so by giving away their rights.

What is the problem?

How is the problem affecting European creators?

Why don’t creators simply refuse?

A common power imbalance

What’s the solution?