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Bulletins Story:
VALUE OF TELEVISION FORMATS CONTINUES TO GROW DESPITE LEGAL
UNCERTAINTY
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Date: 15 January 2007
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American Idol is already
conservatively valued at $2.5 billion in its incarnation as a
television franchise. It already brings in $500 million a year in
TV advertising, plus another $30 - $50 million in sponsorship
packages, music sales, live tours etc. The US magazine
“Advertising Age” has reported that the
owner of the already hugely valuable American
Idol format is looking to add yet further value to
it. Freemantle Media is trying to eke even more revenue out of what
may already be the most lucrative multimedia property of all
time.
On the back of the huge viewing figures for the US television
show, along with three core partners integrated into the content,
American Idol is now seeking new
opportunities by streaming the entire programme on
AmericanIdol.com after it is aired on
television. Apparently, sponsors of the website already include
McDonalds and Mastercard. Last season in the US
American Idol attracted 570 million votes
and 65 million text messages. Sponsors (Ford Motor Company,
Coca-Cola and Cingular Wireless) are working ever harder to
increase the revenue from American Idol
and Ford plans contests which will give regular viewers the
opportunity to appear in music videos featuring the final
contestants.
All this is good news for Simon Cowell, because in addition to
the value of the US franchise (in which he has a 30% interest), its
British cousin X-Factor has been valued
at £300 million. The valuation company Brand Finances estimates
this is the value of the X-Factor
franchise taking into account voting revenue, merchandising, TV
advertising and music sales. Simon Cowell’s company, Syco, jointly
produces X-Factor with Thames Television
(owned by Freemantle Media) and shares its profits.
There is no UK or US statute or case yet which specifically
grants legal protection to a television format. The first specific
recognition by any court of the existence of the format in a
broadcast programme (in this case it was a radio programme) was in
2001 by the Supreme Court of Hungary. Since then decisions by
courts in a number of countries including Holland and Brazil have
confirmed that in appropriate circumstances a court will afford
protection to television formats.
However, these are staggering sums of money to ascribe to a
format particularly in the US, where in the litigation brought by
the rights owners of Survivor against
ITV.com, the rights owners of I’m a Celebrity: Get Me
Out of Here!, Judge Preska dismissed the claim
saying: “the evolution of TV shows ... is a continual
process involving borrowing liberally from what has gone
before”. She clearly recognised that all new formats owe
something at least to their predecessors, and to succeed in a claim
for infringement you must establish copying rather than mere
inspiration.
Organisations such as the International Format Lawyers
Association (www.ifla.tv) and the Format Recognition and
Protection Association (www.frapa.org)
are committed to protecting the rights in programmes which
are original and have been developed carefully by substantial
investment of time and expertise. Our view is that in the
right circumstances both a US or a UK court would protect an
original programme format.
However, while a definitive case is still awaited in the UK or
US (the principal sources of successful formats worldwide), these
sums are still remarkably high valuations for a species of
intellectual property which lacks legal certainty. Until then great
care should be taken to ensure that if there is a dispute, your
format will enjoy the best chance of protection (see www.ifla.tv
to obtain details of the IFLA seminar and guide How to
Protect Your Format).
Jonathan
Coad
Film & TV
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