Tom Amlot and Medwyn Jones discuss the recent High Court battle over the licensing of "Who Wants to be a Millionaire?" in Indonesia. This article was first published in the February 2005 edition of Entertainment Law Review.
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The format business is very healthy in the U.S. television business. From Network hits such as American Idol, Dancing with the Stars, Biggest Loser, Deal or No Deal, Hell’s Kitchen, Wife Swap, Apprentice, etc., to cable fare like Real World. The next few months will see the launch of traditional formats in game shows and non-traditional formats (for the U.S.) of telenovelas. The on-air presence and ratings success of formats is encouraging for their owners - - many from outside the U.S.A. However, the U.S. business practices surrounding formats is less rosy. U.S. buyers (for the most part, broadcaster and cable channels) recognize formats as existing, in a business sense, only in previously produced programs. The concept of a paper format is not recognized by the buyers’ business affairs departments.
A detailed written description of a show, its production peculiarities and rules, etc. is simply a pitch document for a U.S. broadcaster. Furthermore, they claim the format is not “created” until they produce the show. The logic of this, from their point of view, is since their money turns the abstract concept or pitch document into a show and a format, they believe they should own the majority of the format. The creator should be a minority shareholder in any future format exploitation which will, most likely, be controlled by a distribution company, vertically integrated and owned by the buyers’ parent company.
In some respects, it is better for a paper format to become a tape format in Estonia, Portugal, or New Zealand before it is launched in the U.S. The troubles with the U.S. business affairs departments do not stop there. It is rare, though not unknown, for a U.S. buyer to recognize a line item in the budget called “format fee”, say 4%. The fee for any underlying rights holders is expected to come out of some overhead line. To some extent, this goes to the heart of the problem that U.S. broadcasters and their business affairs departments have with the idea of formats. They recognize some of the practical format attributes that are acknowledged the world over, yet they are suspicious of the more abstract intellectual property issues.
In formats, broadcasters see that shows which have already been made somewhere else (and have been a success) are to some extent “debugged”. As well, formats previously made have proven appeal for certain demographics. The proven nature of imported formats also provides one of their greatest appeals for the buyer: validation of the buyer’s choice. This can be useful up the executive chain should a format fail to rate in the U.S.
On the more intellectual property side of the format, since broadcasters have all the money and all the power, it is difficult for them (and especially their business affaires departments) to sympathize with the concept of a creator devising an original format to which the creator maintains the ownership control.
U.S. Summer Season’s Latest
So far, the Summer season of formats has opened strongly on U.S. Network TV, with So You Think You Can Dance (Season 2), and Hell’s Kitchen (Season 2), strong on Fox. Treasure Hunt is doing OK on NBC, and ABC soon to unveil its’ version of the Japanese format Master of Champions. More sub-Idol talent shows are coming with NBC’s America’s Got Talent, and Rock Star, and Endemol’s America’s Fame Academy on ABC. The battle of the game show formats (Set For Life, 1 vs 100) will not take place until Fall or mid-season…so we’ll just have to wait and see what happens.