As creators increasingly move into Hollywood, deal terms can put their IP at risk

Akshay Mehta, CEO of the Whalar Group’s creator-led Lighthouse Studios, worked with Awesomeness Films almost a decade ago, when production companies and studios were first experimenting with the creator economy. At the time, he said, studios were solely focused on renting or buying creators’ existing audiences for a movie, rather than building a long-term media brand with them.

“Deploying Cameron Dallas in a movie for young people so that they can create a transactional relationship with his audience,” Mehta said. “There was less thought about building a long-term media platform or media brand with a creative partner that can go beyond just their audience.” (Awesomeness produced the 2014 Dallas-led film Expelled, which debuted at number one on the Apple iTunes store.)

Now, there is more investment in the creator and their processes, and creators are better versed in how these partnerships can best support them long term. 

In some cases, companies solely license existing IP, like Netflix recently acquiring the rights to Amelia Dimoldenberg’s Chicken Shop Date or Spotter, which licenses existing YouTube libraries and nabs brands to sponsor them, taking a slice of creators’ revenue in the process. 

“With a lot of our creators the way we position on YouTube, they’ll continue to own everything,” said Nic Paul, Spotter’s co-founder and president.

In other cases, companies provide creators access to high-end studios, development and production support, and, crucially, distribution. 

Nima Tahmassebi of NT Legal told Digiday he typically sees creator-led content deals structured in three ways: a talent or work-for-hire deal with studio or brand financing and ownership; a license where the creator’s own company produces and owns and grants the platform the right to distribute with specific guidelines; and co-production where ownership and revenue are split. 

For Lighthouse Studios, it’s mostly the latter.

“We want to partner with a creative partner that then precipitates down into new talent coming into our specific networks that live on YouTube,” said Mehta. 

He said the creators who join Lighthouse Studios aren’t pressured to post content daily, but are given space to “create a defensible media and entertainment format with the support of a branded thoughtful network.”

“A year ago, a video of mine explaining aura would have been filmed in my poorly lit studio apartment,” said creator Chloe Forero, who’s a part of Lyrical Lemonade, a digital media venture from Cole Bennet partnered with Lighthouse Studios. “With the addition of a set, a crew, props, and a tangible stage, I’ve been able to spread my wings.”

When asked how the deals are structured internally at Lighthouse, Mehta said every one is “slightly different.” And if Hollywood comes knocking and asks for licensing options, it’s “an open discussion,” as his experience on the Hollywood side means he’s seen how inflexible these deals can often be. 

“In a perfect world, we would never do a traditional acquisition where someone buys out the content and puts it on a platform,” Mehta said. 

Tahmassebi warns that those kinds of deals can result in creators giving away more than they intended. 

“The devil is in the details, and a work for hire or assignment clause written broadly can have creators signing away things they never meant to, like their own name, their persona,” he said.  

Adam Wescott, CEO and co-founder of Home Game Studios (which produces and distributes unscripted content mainly for YouTube) and Mind Chatter Media (which focuses on scripted content) said the ownership conversation is “always a dance” and there’s still a lot of creator education required. 

“I just came from Vid Summit, where a very successful family channel in Utah asked me about a series development deal they might do at HBO Max…I explained to them that the second they do any sort of docu-follow, you’re cannibalizing your vlog videos on YouTube,” Wescott explained.

The cracks in creator-led content

Problems are arising as this approach gets more popular, like tying creators to brands too early in their production process can result in subpar output.

That’s why Mehta wants Lighthouse to avoid that entirely by refusing to use brands to fill in financial gaps with creator content, thus creating a “square peg, round hole” situation. 

“We want to make sure that we’re able to build a definite, thoughtful entertainment product that lives on a network of other entertainment products,” he said. “Then we can find the right relationship with the right brand that sees the value chain and sees the kind of like not just generic ROI but the long term aspirational ROI of being a long term partner with talent that will always get financed by Lighthouse Studios.” 

Obviously, brands need to buy in. But Wescott said it’s not always about the money for creators already producing highly engaging content – instead, it’s about the additional access to funding, production materials, and distribution they get from inking deals with studios and streamers. 

“I think the most important thing a brand or studio can give a creator is a real say in the creative process,” said creator Gray Fagan. “I’m looking for a partner who can help us take [what we built] further, or elevate beyond what we can do ourselves.”

When it comes to the studios built to churn out creator content, there’s much more investment in ensuring they can deliver high-quality content than just a few years ago. But Hollywood’s new creator obsession could undermine that process. 

For Tubi’s Sidelined franchise, starring TikToker Noah Beck (which reached over 20 million viewers as of this March), Wescott put Beck in acting classes two years before production began. For creators who want to direct, he has them shadow directors; for writers, they get co-writers. 

“You cannot just identify a creator with a large audience reach and expect them to plug in as actor, writer, director,” he said. 

The fear, for him, is that Hollywood will try to circumvent the processes that creator-led studios have put in place, and the result will be a barrage of “really bad creator-driven features from the studio side, because there’s a big disconnect.” 

“Just like anything in entertainment, you’re gonna see a bit of it all. You have to throw ten things at the wall and see what sticks,” Wescott said, noting that mega creator Alix Earle’s new Netflix series didn’t appear to be a “runaway hit.”