Licensing 222 Figure 7.8. Bond films havebecome product placement orgies, but the007 license has beenattached to some goodgames. Territory and Languages Specify both the territory and any permitted languages. A global marketplace means that every territory and language has value and the licensor should be adequately compensated. A licensor should only receive rights to those areas/languages where it commits to exploiting the product-- in other words, it might not make sense to grant the worldwide book publishing rights to a publisher with U.S.-only, English-language distribution. Term Setting the term of rights correctly is important for two reasons: to be sure that parties only share in the benefits that they create; and that any rights not being adequately exploited revert back to the licensor for use elsewhere. A term should generally be set for every licensed product category (example: movie of the week or animated network series). The term for entertainment licenses may be further subdivided into pre-production, production, and distribution terms. This enables the licensor to gauge the licensee's commitment to completing a production, and allows it to get its rights back earlier. Example: A licensor can grant film rights as a three month option, a four-year production period, and a permanent distribution period. If the licen- see can't raise financing for a production, it doesn't pick up its option and the licensee gets the rights back in time to get a film made by another party within the same time frame. If it picks up the option but doesn't produce a film within a certain amount of time, the rights revert after four years. If it picks up the option and produces a film, it may distribute that film in perpetuity. Extensions and early terminations should be considered when negotiating the term, such as: · Renewal. A licensor will want a licensee to earn the right to any term extensions and may set performance thresholds (money received by licensor, number of productions, aggregate pro- duction budget, and so on). · Reversion. A licensor will also want to provide for the reversion of rights after a set time if the licensee does not use the rights or meet a certain threshold of payments to the licensor.