Film Licensing Moves Online

FRAMINGHAM (01/21/2000) - Hollywood Software Inc. is launching an Internet-based rights licensing and management application at the American Film Market Conference next month in Santa Monica, Calif.

Called Rightsmart.com, the Los Angeles-based service moves a critical film industry business function out of a studio's corporate office and onto the Web, reducing the cost of film distribution. It also provides the licensing structure smaller independent filmmakers need in order to bring their work to audiences worldwide.

According to David Gajda, Hollywood Software's CEO, distribution licensing is one of the most mission-critical business functions within a studio.

Traditional methods require film producers to enlist agents, accountants and lawyers to oversee contract generation. "The [application service provider] implementation means that creative types don't have to deal with the back-office stuff to distribute their products," Gajda said. "They can basically do it themselves."

The do-it-yourself approach is important for independent filmmakers. Gajda said 15,000 films are produced worldwide each year, with fewer than 1,000 finding a commercial avenue of distribution. Factor in video, television and cable, and the number is more than 100,000. Gajda said approximately 10,000 different types of rights can be sold for any property. And based on his estimates, a potential 140 million individual rights sales aren't being made. These lost opportunities are exactly the target market for Rightsmart.com.

Rightsmart.com will enable potential buyers to search online for available licensing rights for features, shorts, direct-to-video products, TV movies and episodic series. Buyers can set up automatic searches for information according to predefined profiles.

Michael Leventhal, an attorney at Squadron, Ellenoff, Plesent & Sheinfeld LLP in Century City, Calif., said a system such as Rightsmart.com is likely to reduce distribution costs by cutting out intermediaries. Leventhal, who specializes in intellectual property issues in the entertainment and information technology industries, said, "Every major studio uses some [automated system] to track their own rights," but such applications are primarily for internal use and don't open up the market the way a Web-based system like Rightsmart.com would. "Potentially, it's huge," Leventhal said.

Bertelsmann AG has announced it will demonstrate a Web-based digital rights management service, called Digital World Services, at the Midem 2000 music industry conference this week in Cannes, France. Digital World Services will provide content preparation and secure packaging, usage and financial clearing.

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