Key Points to Check in a Contract for YouTubers Affiliated with an Agency? (Part 2)

The contracts that YouTubers enter into with management agencies are not standard contracts as defined by laws such as the Japanese Civil Code. Therefore, it is crucial to define the rights and obligations of both parties in the contract. In particular, it is necessary to thoroughly check in advance the provisions regarding the content of the services provided by both parties, the generation of remuneration associated with this, and the burden of costs in order to avoid trouble. In this article, we will explain the important points in the contract that a YouTuber signs with an agency and about contract negotiations.

Key Points in YouTuber Contract Agreements

In the following, we will explain typical clause examples in the basic contract concluded between a YouTuber and an agency. In the clause examples, ‘Party A’ refers to the management agency, and ‘Party B’ refers to the YouTuber.

Provisions Regarding Scope of Work

Article X (Scope of Work)
1. Party B shall entrust the following tasks to Party A, and Party A shall accept them.
(1) Business support for the acceptance of projects for the production and publication of videos for the purpose of advertising products or services of companies, etc. (hereinafter referred to as “corporate projects”)
(2) Providing opportunities to appear at events, etc.
(3) Promotion of videos featuring Party B using SNS and other media
(4) Providing personnel such as managers and filming locations for Party B’s activities
(5) Assisting in editing Party B’s video production
2. Party A shall entrust Party B with corporate projects and appearances at events, etc., based on individual contracts separately concluded between Party A and Party B, and Party B shall accept them.

The most important provision in a contract between a YouTuber and a management company is the one regarding the scope of work. The main tasks stipulated in the contract are those of the management office.

Tasks of the Management Office

As for the acquisition of corporate projects and appearances at events, etc., stipulated in items (1) and (2), whether they actually materialize depends on the intentions of the companies and event organizers, so it is usually interpreted as an obligation to do one’s best to provide opportunities. Therefore, even if it does not materialize, the office is not basically held responsible.

Also, as in item (3), the office may be required to promote the YouTuber through various advertising media. Items (4) and (5) stipulate that the office will provide personnel, coordinate filming locations, and assist in video editing for the YouTuber’s activities such as video production and event appearances. When a YouTuber actually signs a contract, it is necessary to first determine in detail the scope of the office’s task of providing personnel, etc. In the above example of a clause, the scope of the office’s task of providing personnel, etc., is not limited to the YouTuber’s independent video production. However, in reality, the scope of the office’s obligation to cooperate may be limited to corporate projects and event appearances requested by the office. If the office’s cooperation is limited to certain tasks, a separate sheet can be attached to the contract to specify the details.

It is also necessary to check carefully who, the YouTuber or the office, will bear the costs such as rental fees for filming locations and personnel costs when receiving cooperation such as personnel provision from the office. If the YouTuber is responsible for the costs, there is little difference from the YouTuber arranging it himself, so it can be said that there is little benefit for the YouTuber. Therefore, in such cases, it may be considered to negotiate to lower the management fee instead of deleting the relevant task.

Tasks of the YouTuber

It is also possible for the YouTuber to accept tasks from the management office. However, it is desirable to stipulate this in the form of individual contracts each time a project arises. If it is stipulated in the basic contract that the YouTuber will accept projects requested by the office, it may be difficult for the YouTuber to refuse the projects. Therefore, when stipulating the tasks of the YouTuber in the basic contract, it should be stipulated that “the YouTuber will accept corporate projects and appearances at events, etc., agreed upon separately between Party A and Party B”, and the projects that the YouTuber will accept should be agreed upon individually. The clause proposal posted above follows this idea.

Clause on Content Rights Ownership

Article X (Rights Ownership)
1. The ownership and intellectual property rights of videos, etc., produced by Party B without the involvement of Party A shall belong to Party B.
2. Notwithstanding the provisions of the preceding paragraph, the ownership and intellectual property rights (including the rights stipulated in Articles 27 and 28 of the Japanese Copyright Law) of the deliverables generated by the work entrusted to Party B by Party A shall be transferred from Party B to Party A, except as otherwise provided in the individual contract related to such work. In this case, Party B shall not exercise the moral rights of the author against Party A.

Videos produced or featuring YouTubers generate copyrights. The principle is that the copyright belongs to the person who produced the video, etc., but it can be transferred by the provisions of a contract. If the copyright is transferred to an agency or a third party, the YouTuber themselves will not be able to freely use the video. Therefore, as a YouTuber, you must be careful to secure the copyright for the videos you produce (Paragraph 1).

However, for videos related to corporate projects or event appearances, the video is initially created in accordance with the intentions of the company or event organizer, and appropriate compensation is received from them. Therefore, there is also an option to transfer the copyright of the video produced by the YouTuber on behalf of the agency to the agency or a third party. The clause proposed above is designed with such cases in mind. Furthermore, moral rights of the author are rights that protect the author’s personality and honor, specifically including the right to display the author’s name on the work and the right not to have the work published or modified without permission. Unlike the copyright itself, moral rights cannot be transferred by contract, so it is common to stipulate that the original author will not “exercise” these rights to prevent any inconvenience after the transfer of copyright.

Provisions Regarding Remuneration

Article X (Remuneration)
1. Based on Article X, Paragraph 1, for the work entrusted to Party A, Party B shall pay Party A a remuneration equivalent to 20% of the sales amount (including consumption tax) related to the said work. However, the advertising revenue paid by YouTube and others for the videos produced and published by Party B shall not be included in the sales amount that forms the basis for calculating the remuneration.
2. Based on the individual contract stipulated in Article X, Paragraph 2, for the work entrusted to Party B, Party B shall pay remuneration to Party A in accordance with the individual contract.

The provisions regarding remuneration payments reflect the nature of the work entrusted to the agency and the YouTuber. A common provision is that for business support services entrusted to the agency, a certain percentage (often around 20%) of the sales amount of the project acquired by the agency is paid as remuneration to the agency. It should be noted that there are two types of revenue generated from video production for corporate projects: the remuneration received from the corporation and the advertising revenue (AdSense revenue) received from YouTube. As a YouTuber, it is essential to confirm whether the advertising revenue from YouTube is included in the calculation of the remuneration amount to be paid to the agency.

After all, the advertising revenue from YouTube is proportional to the brand value that the YouTuber has built up, and it does not significantly change depending on whether the project was acquired by the agency. Therefore, since the agency’s contribution to the advertising revenue paid by YouTube is not that significant, it is possible to negotiate so that the YouTuber can receive 100% of the advertising revenue by not including it in the basis for calculating the remuneration amount to be paid to the agency. The clause proposal posted above is based on this idea (Paragraph 1). On the other hand, the work entrusted to the YouTuber will be stipulated in the individual contract as a principle, so the remuneration will also be in accordance with the individual contract (Paragraph 2).

Clause on the Burden of Operational Costs

Article X (Expenses)
1. Party A shall bear the costs, such as transportation and meals, incurred by Party B in the course of video production tasks, appearances at events, and other tasks reasonably associated with the said tasks, which Party A entrusts to Party B.
2. Costs other than those specified in the preceding paragraph shall be borne by Party B.

It is also necessary to thoroughly check the burden of costs related to YouTuber activities. The costs associated with video production carried out independently by the YouTuber are usually borne by the YouTuber. On the other hand, for corporate projects and event appearances entrusted by the agency to the YouTuber, there are two patterns to consider: the YouTuber bears the costs such as transportation, or the agency bears them. However, it is also considered acceptable if the YouTuber bears the costs but receives a commensurate reward. The remuneration for tasks entrusted from the agency to the YouTuber is typically determined separately in individual contracts, so when concluding an individual contract, be aware that negotiations for remuneration and the like should be based on whether the basic contract stipulated that the YouTuber or the agency would bear the costs. Please note that it is also possible to determine the burden of costs in each individual contract, rather than stipulating it in the basic contract.

Clause on the Use of YouTuber’s Name

Article X (Use of Name, etc.)
The Party A or a third party designated by Party A may use the name, etc. of Party B free of charge to the extent necessary for advertising and promotion related to the performance services entrusted by Party A to Party B.

As a famous YouTuber, just like celebrities, the name used on YouTube can generate significant brand value. Therefore, as a YouTuber, it is necessary to avoid situations where your name, etc. is used without your permission. However, for tasks where the agency entrusts appearances and the like, it becomes necessary for the agency to use the YouTuber’s name as part of its promotional activities. Therefore, it is common to permit the free use of the name, etc. to the necessary extent for tasks entrusted to the YouTuber by the agency.

What needs to be noted is the contract clause that does not limit the situations where the use of the name, etc. is permitted. If the contract clause allows the agency to use the YouTuber’s name, etc. at all times, the YouTuber may end up allowing a free ride on the brand that the YouTuber has built up, as well as being involved in unnecessary trouble, as a result of the name, etc. being used without permission in situations that the YouTuber did not anticipate. Therefore, it would be desirable to have a contract clause that limits the situations where the use of the name, etc. is permitted, as in the proposed clause above.

Provisions Regarding Contracts with Third Parties Outside the Firm

Article X (Prior Approval)
The Party B shall notify the Party A in writing in advance if it intends to enter into a contract with a third party that may affect the performance of the services entrusted to it under this contract or any individual contract.

In contracts between celebrities and talent agencies, there are often provisions that prohibit the celebrity from accepting work without going through the agency. However, in contracts between YouTubers and agencies, it is not common to have provisions that restrict the activities of YouTubers to such an extent. This is thought to be due to the difference that, while promotion by an agency is essential for celebrities to become famous, YouTubers often build their brand value through their own efforts. However, there may be provisions stipulating that YouTubers are subject to certain restrictions when they accept corporate projects and other assignments from the agency. The model clause mentioned above stipulates the obligation of YouTubers to notify in advance when they accept work that may affect corporate projects and other assignments. Since it is only an obligation to notify, the agency does not have the right to refuse, so the restrictions on the activities of YouTubers are not so significant. On the other hand, if a clause stating “obtain the consent of the agency in advance” is included, it would give the agency the right to refuse the activities of the YouTuber, which can be considered a significant restriction. Therefore, when stipulating provisions regarding contracts with third parties outside the agency, it is necessary to pay attention to whether it is an obligation to notify or an obligation to obtain consent.

Force Majeure Clause

Article X (Force Majeure)
If one party to this contract is delayed or unable to perform its obligations under this contract or individual contracts due to the circumstances specified in the following items, it shall not be held responsible.
(1) Suspension or termination of services by third parties related to YouTube and other outsourced tasks
(2) Suspension or termination of the account or channel in the service mentioned in the previous item

Contracts generally include a force majeure clause. For example, it is a provision that exempts a party from liability for damages based on non-performance of a contract when the performance becomes impossible due to force majeure such as earthquakes or wars. In the case of YouTubers, their activities depend on services provided by third parties such as YouTube, and they may not be able to perform their duties as stipulated in the contract with their agency due to circumstances beyond their control. This can be particularly problematic in corporate projects. Corporate projects require YouTubers to publish videos introducing the company’s products or services on their channels for a certain period of time.

Therefore, if YouTube’s service becomes unavailable, YouTubers may be accused of breaching their contractual obligations and may face claims for damages. It may be difficult to include such a clause in a contract with an agency, but even so, it is necessary to confirm in advance with the agency and the companies that will be clients of corporate projects about how to respond if measures such as suspension of accounts or channels are taken by YouTube.

Clause on Image Maintenance

Article X
The Party B shall not engage in the following activities during the term of this contract:
(1) Actions that may lead to complaints or similar responses from third parties in relation to Party B’s activities
(2) Illegal actions or actions contrary to public order and morals
(3) Actions or statements that may damage the image of the products or services of the company for which Party B is contracted
(4) Actions that significantly damage the reputation or credit of Party A or Party A’s business partners

Just like celebrities, YouTubers have their own brand value. Therefore, especially when they are contracted for corporate projects, if YouTubers face social criticism due to ethically unacceptable actions or statements, it can lead to a decline in the image of the contracting company. Therefore, it is required for YouTubers to not only refrain from illegal activities including crimes to maintain their brand value, but also to avoid actions or statements that may attract criticism. It can be said that it is inevitable for such clauses to be established for YouTubers. If complaints or similar responses are actually received from third parties, it is common to consult with the agency to resolve the issue. This is because if the YouTuber themselves respond, it may lead to bigger problems. Therefore, there may also be clauses stipulating that YouTubers should not deal with problems on their own, but cooperate with the agency to resolve them.

Summary: Advantages and Disadvantages of joining an Agency for YouTubers to Decide Based on Individual Activities

The trend of YouTubers joining management agencies has only recently started to increase. As a result, there is still a lack of guidance and resources available regarding the contracts that YouTubers enter into with these agencies. Given that contracts with management agencies often continue over a long period once they are signed, it is particularly important to carefully consider them.