The Flash Podcast Special Edition 03 – DC TV and Cinematic Universes

While waiting for The Flash to kick off the second half of the season, Andy, Scott and Adam get together for their first episode for 2015 to discuss the DC TV Universe as well as the DC Cinematic Universe. What are the rules between the two divisions when it comes to what characters can actually be on the small screen? How does the DC Multiverse work? Those questions and more are discussed on this special edition of The Flash Podcast!

  1. Good show.

    I happen to do these kinds of deals so….

    To help you understand the purpose behind embargoes and why they generally can’t publicly lay out the rules, remember that this entire thing is a business enterprise, not simply an artistic endeavor attempting to feed the soul. The decisions are motivated by money and with respect to intellectual property (IP), one of the biggest sources of revenue is licensing.

    A license is not ONLY the right to do something, it is payment to the IP owner to EXCLUDE OTHERS from doing the SAME thing. For example, why would I pay DC a license fee to have the Flash logo on my product, if someone else gets to do it for free and DC doesn’t go after or sue them for infringing on their IP?

    The less exclusive the license, the less valuable it is to any one prospective licensee and the less they will pay to secure that license. If you undercut your licenses with an alternative, no one will pay for your license in the future. For example, the Spider-Man 2 (2004) videogame is a derivative license from Sony’s movie-franchise Spider-Man. The developers, Treyarch, paid Sony in order to make that game based on the movie and Sony had in-turn paid Marvel to make the movie. However, for Ultimate Spider-Man, Treyarch went around Sony and got a license from Marvel directly for the Ultimate Comics version of Spider-Man as an alternative to the movie-franchise. This cut Sony out of the loop and devalued their film license. No one would want to deal with Marvel again, except Marvel doesn’t care because they’re no longer interested in licensing out their film rights.

    Applied to DC. If Coca-Cola pays DC $20M to use movie Flash, but then Pepsi pays DC $5M to use TV Flash, Coca-Cola will be pissed and no one will ever pay $20M again. So the WB sets up embargoes (and the like) to avoid licensees from stepping on each others’ toes and maximizing the money they can get. Announcing an embargo is generally a sign that your character is big enough to warrant a big licensing fee and thus a degree of exclusivity. That tends to be a no-brainer for the obviously major characters who you would expect to command a large fee.

    However, you tend NOT to announce embargoes for smaller characters because that is like admitting that they aren’t expected to bring in a big licensing fee and exclusivity may be less of a priority (in such cases, creating brand awareness is more valuable than any one license). In other words, spelling out where all the rules are and what all the embargoes may or may not be is like giving prospective licensees a price sheet in advance of negotiations… which is silly.

    If someone wants to pay you $20M for Vibe, you let them (!!), and work out any details or exclusivity later. You don’t tell the world Vibe is only worth $0.1M in advance of any offer merely to assuage fans about which characters can go where.

    Now based on the above, it may seem strange that they’re diversifying the Flash IP with both a TV show and film franchise, but what that shows is a competing interest, which is to grow a brand. Once a brand is crystallized, then licensees will pay through the nose to attach it to their products, but that brand needs to be big. By making plans for a major motion picture, the WB is saying The Flash character and brand is worth investing $200M in… and we have confidence that his value exceeds just the TV IP. If they failed to announce or make plans, that would be like saying they think The Flash is ONLY worth a TV IP (and thus that must be protected because we don’t believe he can make it in the movies).

    Remember that a lot of brand value is about image and speculation. Licensees are signing on the dotted line well before they’ve seen the films they’re attaching their products to. So projecting confidence is vital.

    Obviously, reality is much more complex than these simple examples and there will be exceptions and exceptions to exceptions; license agreements can be sledgehammers or scalpels depending on the skill of the drafters… but this is the general gist: embargoes are meant to protect license values and lack of public clarity on embargoes are meant to protect brand value to prospective licensees.

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