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Part
Two
By Harlington L. Hanna
Jr.
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The Need for Effective Collaboration
Another important aspect is that more than ever the
global market requires a tremendous amount of
collaboration and understanding of intellectual property
customs, regulations and laws if you are to operate at
the number one level of the hierarchy previously
presented. This collaboration becomes essential as you
cross national lines, boundaries and barriers in your
search for big entertainment dollars. Just a cursory look
at the money sources in entertainment shown elsewhere in
this book should demonstrate that to make real money in
the modern marketplace you must have a global and
international perspective. This global and international
perspective will demand collaboration. In negotiating
agreements it is essential that they include
opportunities for participants necessary for the
effective exploitation of the I.P., and allow flexibility
in transfer, assignments and disposition of the assets
when applicable. Remember no man is an island. Full
exploitation in the global economy will require adequate
partners in the process. Just take a look at all of the
mergers, acquisitions and corporate partnering that is
going on in the current global marketplace. The effective
negotiator will understand the present and future needs
for full exploitation and will include provisions for
such in the acquisition negotiations. He may want to
prepare and present his collaborative plans for the
project in his efforts to convince the I.P. holder of his
ability to exploit the product.
Remember that in most cases the I.P. holder is himself
a collaborator in the project since many acquisitions are
not outright transfers or sales but agreements giving the
transferee a controlling interest or license and
providing the original I.P. holder with royalty income
participation. In such cases the I.P. owner will want to
be assured of the transferees ability to deliver a
successful project.
Some may feel that collaboration is primarily needed
to bridge the international markets and their different
markets, players, and legal needs. However don't be
fooled into believing that collaboration is not needed
just because you may sit in the Untied States or some
other major market country. Because of the control of
multinational companies in the marketplace and because of
the customs, practices and intrinsic development of the
entertainment industries, effective collaboration is
needed even on a wholly domestic basis.
What this really means for the individual entrepreneur
is that the business learning curve just got a little
more sophisticated and difficult. But the solution to the
complexity of the problem is collaboration itself. Those
searchers for the real money in the entertainment
marketplace must learn to work with others, to give up a
part of the pie, to put in and supply their piece of the
pie, to build their own network and finally, to
coordinate all of the aspects of this complex picture
while legally and financially protecting their piece of
the pie.
The producer or holder of an entertainment property
must be able to collaborate with distributors, promoters,
artists, customers, and other intellectual property
holders in order to reach that all important dollar. The
greater the ability to effectively collaborate the
greater the chances for ultimate success.
Generally you should attempt to collaborate on
ownership or control with fellow entrepreneurs you
already know. This provides for an added level of
security. Joint venturing with fellow entrepreneurs is an
important practice in the entertainment business. Such
partnerships can be structured with a money investor, a
studio, the artist, the producer and any other parties
needed to make the project work. The agreements between
the parties must be written and well designed. The
contractual readiness of the parties is important. These
joint ventures can be very successful if properly planned
and consummated. More than anything else they spread the
risk of doing business. However due to the fact that they
inherently include more people there are more potential
problems. Joint ventures are however extremely important
where a lack of financial resources exists, as is usually
the case in most entertainment projects.
A significant amount of consideration must be given to
the business form the joint venture will take. Based on
the particular facts and circumstances the joint venture
could take form as a corporation, a general partnership,
a limited partnership, or a mixture of each of these.
Without a doubt some experience legal assistance should
be employed in any serious joint venture effort.
It is important to note that joint ventures may be
quite successful between an established business and a
much smaller business entity. In fact in some respects
much of the business being done in the software industry
now takes this form, with large companies such as
Microsoft in effect joint venturing with much smaller
software developers. In addition today more and more
large record companies in effect joint venture with
smaller entities on many projects. The classical
independent producer deal where a major record company
will contract with an independent producer to do a
production is a classical example. Joint venturing with
an established business entity provides significant
advantages because the established business has a track
record, experience, contacts, and credibility which the
small or new business entity can substantially benefit
from. Entrepreneurs should always attempt to collaborate
with a more established entity if possible.
Partnering with venture capitalists can also be a
source of financial support. Today it is also possible to
find venture capitalists who go beyond simply providing
the money behind the project. Many venture capitalists
will provide other important services and resources to
ensure that their investment has the best opportunity to
be successful.
Finding a Network or Base of Support
Closely aligned with developing collaborators and
building credibility is your ability to work from within
some type of network structure which supports your
efforts in developing your project or building your
business. Most available networks exist in the form of
professional organizations such as the various songwriter
and other talent based membership organizations which
represent individuals and companies who have similar
purposes and objectives. "No man is an Island" has never
been more true than today in the modern business
environment. Entertainment entrepreneurs should make
every effort to find and participate in some sort of
organization and or network which provides support and
opportunities for interaction with others in the same
boat. The knowledge and insight that can be gleaned from
such relationships are enormous and cannot be overlooked
if you are serious about success. Needless to mention
your search for such a network should be judicious since
some organizational networks will be better for certain
purposes, individuals or companies based on their
peculiar facts and circumstances.
Members of such organizational networks have a
tremendous advantage over others who have no network
support. Remember matching and competing with competition
is the key to success. It is almost impossible for a
non-networked individual or business to compete with a
networked one in this modern economy.
As an entrepreneur in the Entertainment marketplace
there are some important general considerations in
determining value, strategies and contracts for the
private acquisition of entertainment intellectual
properties.
Part One
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Three 