Q & A Table of Contents
Setting A Price For A Royalty
From: Evgueni, St. Petersburg, Russia
Question: The designer of the lighting for some performances of a classical opera has been given the opportunity to publish and commercialize a DVD of one of the performances using his lighting design. This performance will be broadcast and then the DVD will be released. Do you happen to have a vague idea what a lighting designer could ask for in terms of rights and eventual royalties?
Response: With the development of new ways to commercialize intellectual
property — things people write, design, or perform — old norms have needed
to be re-examined to respond to new circumstances. Using the specific
situation you describe, a century ago the composer and librettist of an
opera were often paid commissions by patrons (wealthy people or
organizations) to write an opera about a particular topic. They were also
supposed to be paid every time the opera was performed after it was
published. Members of opera companies — singers, orchestra musicians,
costume and set designers, directors, and others were either salaried
employees or hired on a contract to perform in particular productions.
With the development of phonograph recordings, radio, and television
performers and other owners of intellectual property rights ultimately
found ways to get royalty or commission payments and thus share in the
financial rewards generated by the additional distribution of their
performances. In theory this principle remains the same in the continually
expanding universe of ways audiences can enjoy artistic endeavors.
Before asking for royalty payments the lighting designer should check his
contract to see whether that issue is already covered. It is entirely
possible that the contract already contains language relating to royalties
regarding broadcasts or other distribution of the opera’s performance — and
that would govern what the designer can do.
If the contract is silent on the issue, then the designer should do a good
job of research. He should find out whether other members of the opera
production company are going to receive royalty payments — and if so, how
much. If none of his colleagues has a royalty agreement, he should try to
learn whether people working for other opera companies in his market area
-- and in other countries where the opera will be performed, broadcast, or
where the DVD will be sold — get royalty payments in similar circumstances.
While I would be surprised to learn there are no precedents, one must not
be governed by unproven assumptions. Thus, if people in the designer’s
situation normally do not get royalties, he should do his best to learn
what happens in other similar business sectors to find out how it is
handled. If there are no royalties at all, and if he is prepared to
initiate something new, he should learn as much as possible about the
economics of the broadcast and DVD elements of the opera business. With
that information he can calculate what percentage of the gross revenue of
the ‘live’ performances of ‘his’ opera he is already being paid and try to
apply that to the anticipated revenues from the sale of broadcast rights
and DVDs now contemplated.
Setting prices on ideas is extremely challenging. There’s an old, probably
apocryphal story about an American tourist visiting Paris. She happened to
notice that Pablo Picasso was sitting at a nearby table during lunch.
Gathering all her strength she walked over to him with a scrap of paper and
ballpoint pen in her hand. “Master Picasso,” she said, “I think you are
the greatest artist who ever lived. If you could please make any kind of
mark on this scrap of paper, I would cherish it forever.” Without saying a
word, the artist quickly squiggled something on the paper. The tourist
said, “I cannot thank you enough, sir.”
Picasso said, “That will be $75,000.”
The woman was aghast. “How can you ask $75,000 for making a mark that took
you a fraction of a second?”
“It took no time to make the mark,” said Picasso, “but it took me sixty
years to get to this point.”
Good luck,
Steve
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