The areas of law governing professionals and businesses in the entertainment industry, particularly contracts and Intellectual Property; more particularly, certain legal traditions and aspects of these areas of law that are unique to the entertainment industry.
The entertainment industry includes the fields of theater, film, fine art, dance, opera, music, literary publishing, television, and radio. These fields share a common mission of selling or otherwise profiting from creative works or services provided by writers, songwriters, musicians, and other artists.
The entertainment industry exists in a state of economic uncertainty. Entertainment companies continually form, merge, re-form, and dissolve. Furthermore, consumer tastes in artistic products can change quickly, thrusting certain artists or artistic movements to the heights of popularity and reducing others to obscurity. Because of this instability, the entertainment industry relies on complex contracts, which usually are drafted to protect entertainment companies against economic risk.
Personal Service Agreements The Personal Service agreement is a primary legal instrument in the entertainment industry. It is negotiated between an artist and a company that manufactures, promotes, and distributes the artist's goods or services. The agreement often binds the artist to produce for one company for a certain period of time. Personal service agreements are often governed by statutes and are often the subject of litigation because they restrict the rights of artists to perform or create for any entity except for the company with whom they have contracted.
Artists generally do not have the resources necessary to manufacture, market, and distribute their goods or services. Instead, they must find an appropriate entertainment company to do so. Entertainment producers (e.g., book publishers, record companies, movie studios, and theaters) often invest large amounts of time and money in promoting and selling artists' talents or products to consumers. Most artists will fail to earn a profit for their producer. A few, however, will earn enormous sums. To ensure that artists who generate a profit will remain with the company, producers use personal service agreements to bind artists for a certain time, during which the producers attempt to recover their investment in the artist, make a profit, and cover losses from less successful artists.
In some entertainment industries, personal service agreements are structured using options. Options give a producer the right to extend an agreement for several time periods. For example, a record company may contract with a musician to provide one album during the first year of the agreement, with an option to extend the contract. After one year, if the record company feels that it would be economically wise to release a second album by the musician, the record company may exercise its option and require the musician to provide the second album. Under option contracts such as this, producers can keep artists on their roster for many years, or as long as the artists remain profitable.