This Q&A was originally published in the Winter 2017-2018 issue of Documentary magazine, a publication of the International Documentary Association, a nonprofit media arts organization based in Los Angeles.
For budgeting purposes a producer should understand all of the fees and other costs that may be owed not only to an archive but also to third parties. But some archive licenses suffer from a blank check problem: the total cost of the license may far exceed the fee specified in the archive’s contract.
For example, archives may require producers to pay residuals, re-use fees and other compensation required by applicable unions and guilds (e.g., WGA, SAG-AFTRA or DGA), or that may be owed under agreements with individuals who rendered services on the licensed material. The issue is complicated by the fact that archives often do not know if these residuals and other payments are triggered by a particular use, or if any of the individuals rendering services on the material were members of a union or guild, or if they were hired under agreements entitling them to payments for use of licensed clips.
To cover themselves, archives simply require that payments to third parties — whatever they may be — will be the obligation of the licensing producer and not the archive. Also, many archive licenses do not include a grant of rights in music or other third party material (such as artwork or third party footage) that may be contained in a licensed clip. Producers are expected to license separately third party works that are present in the licensed material.
Producers should ask about potential obligations to third parties and either ensure that they will not be obligated to make further payments or else find other material to use instead.