Blogging Management: Should You Consider Representation?

Dan and I counsel a number of bloggers on issues ranging from compliance (i.e., privacy issues, contest and sweepstake rules, FTC disclosure guidelines, and DMCA safeguards) to intellectual property protection (i.e., trademarks, copyrights, confidentiality agreements and NDAs). Because bloggers tend to be extremely vocal and have large platforms, there are many potential business opportunities out there for savvy bloggers. Nowadays, bloggers are getting paid to endorse products, design clothing, host parties, star in reality-based TV shows, model, pen novels, and generally slap their name on any number of products. Some bloggers do this on their own, but most work with the growing list of management agencies which have recently begun catering to this growing market of talent. As blogging graduates from infancy to adolescence, we can only expect this trend to continue. Unless you are simply blogging for the fun of it, it’s important to learn how to treat your blog like a business and a potential revenue source.

Our clients have worked with a number of agencies, managers and other representatives who, directly and indirectly, work with bloggers. We’ve seen countless representation agreements and we know what such agreements should and should not contain (and what terms are or are not “market” for bloggers). Below, please find a non-exhaustive list of issues to consider when negotiating a representation agreement.

USE AN ATTORNEY (EVEN IF IT'S NOT US) 

Don’t be penny wise and pound foolish. The amount you spend on attorney’s fees should be significantly less than the value of the additional compensation, options, carve outs, and all the rest that your attorney negotiates on your behalf. Plus, they act as a buffer between you and your representative, which is often overlooked and invaluable service.

COMMISSIONS

Most representatives will take between 10% and 25% of your earnings. Make sure you, however, that you are clear as to what constitutes “earnings” (i.e., based on net or gross figures).

EXCLUSIVITY

Some representatives will agree to work with you only on an exclusive basis. Others may be willing to work with you non-exclusively, or may be willing to allow you to carve out certain activities, distribution channels or merchandise categories. It’s important to know exactly where the representative’s strengths and weakness lie so that you take full advantage of their expertise and steer clear of their short comings.

NON-CIRCUMVENTION

Most representatives will require, and rightly so, that for a pre-determined period of time after the agreement terminates or expires, you will continue to pay commissions on any deals you subsequently enter into with parties that you actually worked with during the term and, in some cases, with parties that the representative substantially negotiated contract with on your behalf simply introduced to you during the term. This time period is highly negotiable, but typically ranges from 2 months to 12 months or more. One key in negotiating this provision is determining exactly what constitutes “substantial negotiation” – a mere inquiry by the representative to a potential partner should not be enough to lock the blogger in post-termination. Another key is negotiating which parties are subject to the non-compete. If, for example, your representative negotiated a deal for you to write a column in Elle magazine (a unit of Hearst Publishing), that shouldn’t mean that all of Hearst Publishing is subject to the non-compete. You should be able to pursue, for example, an A&E reality show about your blog even though A&E is a Hearst property.

The issues above are just a small sample of the types of issues lawyers can help you understand and navigate. If you are thinking about seeking representation, or if you have been approached for representation, please feel free to reach out to us for help. Once you’ve signed a representation agreement, it is much harder (and sometimes entirely impossible) to undo certain provisions that may keep you from achieving success.

The information presented herein by the firm is for general informational purposes only and should not be construed as legal advice. You should not act upon any information contained within this blog post without first seeking specific advice from us or from your existing counsel. The firm makes no warranties, representations or claims of any kind with respect to any of the information contained herein

Financial Times Photo Blog

While Dan and I expect to get media coverage for our fashion law expertise, we never expected the Financial Times to cover either of us for our fashion sense.  But that’s exactly what happened the other morning as I was walking to the office.  A photographer for the Financial Times stopped me, took my pictures, and asked a few questions about my style and my practice. The link to the photo blog is below. Enjoy.

Financial Times - Suits in the City

Check Out Our Monthly Features on iFabbo.com

We have had written a weekly column about legal news and issues specifically concerning bloggers for several months now exclusively for the International Organization for Beauty, Fashion and Lifestyle (known affectionately as “iFABBO”).  You can find our current and past entries here.

The ".XXX" Domain Name Launches Soon

Act Now to Block Your Website from Unwanted Confusion with Porn Sites.

With the upcoming launch of the new “.XXX” domain on December 6th, brand owners need to act quickly to protect their websites from unwanted associations with the adult entertainment industry.

From now until October 28th, brand owners are entitled to pay a one-time “blocking fee” to prevent the registration of strings matching their names. The names will remain blocked for at least the next 10 years, the agreed upon time that ICM Registry will be responsible for maintaining the extension.

Most famous celebrities have had their names made off-limits when it comes to the new domain. Brands, on the other hand, have work to do. In order to prevent your website from being registered as a “.xxx” domain, the applicant must be a trademark holder, meaning that they have a legal right to be the only party identified with that word or phrase on the Internet. Also, the application must be completed by October 28, 2011.

Bellizio & Igel has begun filing applications for names to be added to the ”block list.”  The cost per domain is $375 for 10 years of protection, inclusive of all fees.

Don’t take chances with your brand equity. Contact us so that we can help you protect the brand you’ve spent so much time and energy to build.

Drafting a Privacy Policy that Works

We live in an information economy.  While many companies have privacy policies and/or terms and conditions on their websites governing how they collect and use personal information, such policies are typically poorly drafted, fail to convey important information, or are simply inaccurate.  Class action suits have targeted dozens of companies for alleged failure to communicate what information they collect and why.

Website visitors typically provide information by typing it in the appropriate field and checking a consent box, or taking some similar step, but companies collect much more information without relying on the consumer’s help. Web analytics track consumers as they move from page to page within a site. Cookies store user histories and preferences as a file on the user’s browser. Third-party marketers mine for information about consumers habits. Even if the information gathered is not associated with a consumer’s name, privacy concerns may arise. So how can you be sure you’re sending clear messages about privacy and getting truly informed consent?

First, be as clear, concise and transparent as possible.  Your privacy policy should not read like a technical manual. While you may have to master terms like “query string,” “web beacon,” and “trace route,” those terms mean nothing to your audience. Also, many of these technical details change so regularly that your privacy policy will be out of date before it’s uploaded to the site.

Second, focus on information the consumer needs to make choices. Try to draft your policy from a “cause and effect” point of view. For example, “if you use the website, then we will collect X. If you create a registered account, we will require Y. If you give us this piece of information, we will share it with Z. If you have a question or complaint, then please contact us here.”  Third, your policy should be written as simply as possible, in plain language. Use common words over advanced vocabulary. Favor short, declarative sentences. Make it easy for the reader to find what he or she is looking for by using headings. If it fits your corporate culture, don’t be afraid to draft the policy in a fun, approachable way. Zynga Inc., the company behind FarmVille, created PrivacyVille. In PrivacyVille, gamers earn points by showing that they understand Zynga’s privacy policy.  Finally, the text of a privacy policy matters, but so, too, does its placement on the website. If the consumer has to follow a link, is the link easy to find? Is the font size large enough?

Best practices and customer expectations will change over time. So too must your privacy policy. Make clear to consumers how you will communicate changes to your privacy policy, and what constitutes their consent to such changes. A privacy policy is a contract, and a contract needs to be written clearly. Good privacy policies all start by knowing what to say, and how to say it. But above all, say it in plain English.

Music Industry Prepares to do Battle with Artists Over Rights to Recordings

I read an excellent article in the New York Times yesterday about musicians reclaiming ownership of their original recordings from labels. Hits like Bruce Springsteen’s “Darkness on the Edge of Town,” Billy Joel’s “52nd Street,” Kenny Rogers’s “Gambler” and Funkadelic’s “One Nation Under a Groove” have generated tens of millions of dollars for record companies over the years, but US copyright law (which was revised in 1978) allows for musicians to regain control of their work via a “termination right” after 35 years, provided that they apply to do so in advance.  Hard to believe, but each of the recordings listed above (and many, many more) are approaching their 35th anniversary.

Illegally downloading of new releases in recent years has left record labels disproportionately dependent on sales revenue from older recordings. Labels can ill afford to lose the proceeds from these sales.  Not surprisingly, the labels contend that the masters belong to them in perpetuity because they are “works made for hire” – works created, not by independent musicians, but by “employees” hired by the labels to record the songs.

The article suggests that the label’s contention is a weak one.  First, musicians typically pay for the making of the records themselves (as well as touring, distribution, etc) via advances against their royalties.  Second, musicians do not receive benefits from, nor are they obligated to, employers in the traditional sense.  As the saying goes, if it walks like an independent contractor…

It will be interesting to see what rights the song writers (if different from the musician performing the song) are entitled to.  Also, as the article suggests, will foreign bands be able to exercise termination rights on their American recordings even though their original contract was signed outside the US?  It looks we’ll all have front row seats to what I’m sure will be a killer performance by the artists and the labels.

Wild, Wild West No More: FTC Disclosure Rules Regarding Blogger Compensation

In October 2009, the Federal Trade Commission (“FTC”) issued revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” (the “Guidelines”) that may impose disclosure requirements on bloggers (and Tweeters, Facebookers and other online publishers) who endorse certain products and services.

The Guidelines, which until 2009 had remained unaltered for nearly 30 years, call for bloggers to disclose their relationship with a company when they are being paid or otherwise compensated by that company to comment favorably on its products or services. The Guidelines also suggest that bloggers may be held liable for making misleading or unsubstantiated claims about such a product or service.

As a blogger, you may be asking, “Why must the FTC bathe in the tears of we poor bloggers”?  Relax.  The Guidelines really aren’t that onerous or unfair if you take a moment to think about the requirements and the public policy rationale behind them.

First, the disclosure requirement applies only to bloggers endorsing companies for compensation (i.e., ad revenue, spokesperson fees, commissions, a “steady stream” of freebies, etc.).  If, for example, you’re a fashion stylist blogging about fashion simply because you L-I-V-E (*fingers snapping*) fashion, or because you want to gain exposure for your work, you may say all the wonderful things you want about how fierce your Jimmy Choos look or how informative you found Elle’s cover story on makeup for Eskimos to be.  Of course, there are other issues pertaining to libel, copyright, and other matters which are outside of the scope of this article but which you must nonetheless be aware of before posting anything.  At All.  Ever.

Second, for those bloggers receiving compensation, the Guidelines are easily complied with.  In fact, the disclosure statements suggested in the Guidelines themselves are fairly benign (i.e., “ABC Company gave me this product to try.”  That’s not so bad, right? Just make sure to clearly and conspicuously disclose your relationship, preferably within the actual blog post pertaining to the product or service.  Although there is no definitive FTC statement on this issue, a blanket statement on your blog home page really doesn’t cut it because it does not adequately notify your audience about which brands are compensating you to endorse which products and services. If you are using WordPress, you can automate the process by using the Add Post Footer plug-in.  You’ll need to enter a default disclaimer, which you can then override on a post-by-post basis using a custom field.

Third, the FTC has gone out of its way to indicate, publicly, that they are way more interested in educating bloggers than suing them.  They’ve got bigger fish to fry.  Furthermore, they’re on record as saying that there is no monetary penalty for a first-time violation, even if the violation is a fairly serious one (which it won’t be if you simply follow the Guidelines and/or use common sense).

Finally, fourth, if you’re serious about your blogging career, the FTC’s meddling is actually a really positive thing.  By issuing these guidelines, the FTC is regulating transparency in blogs the same way it regulates transparency in newspapers, magazines and television.  Bloggers are no longer the red-headed stepchildren of journalism.  Rejoice!  After all, you’ve been burning the midnight oil, furiously typing away while the night pulls itself apart on the crimson seams of yet another sunrise for a while now…  You’re not doing this for your health, right? And the FTC’s imprimatur should be a great help to you the next time you pitch that stodgy CPG brand about working with you, or that fuddy-duddy media outlet about using you as a talking head.

It is important to note that even after making any necessary disclosure statements, you must also avoid making any false, misleading or unsubstantiated claims about a product or service you endorse. Again, The FTC is not out to get bloggers sharing their opinions but, at the same time, you shouldn’t make blanket factual claims about an endorsed product that you can’t substantiate and support.