TYGlobe

I. Preface

The micro-short drama industry has entered a phase of explosive growth since 2022, with its market space expanding sharply and its business model becoming increasingly mature. In the overall "production-circulation-consumption-distribution" chain of micro-short dramas, the production link plays a leading and guiding role. In the previous article, the author analyzed the legal risks that may be faced by copyright owners, one of the participants in the production link, and put forward corresponding compliance suggestions. In this article, the author analyzes the legal risks that may be confronted by micro-short drama production contractors, another important subject in the production link, and puts forward relevant compliance suggestions.

II. Potential Legal Risks for Production Contractors of Short Dramas

A review of the current micro-short drama industry shows that there are two main operation modes, namely PGC (Professionally Generated Content) and UGC (User Generated Content). The PGC mode focuses on securing basic and predictable economic returns through professional production, scheduling, broadcasting and distribution; UGC, namely user original content, pays more attention to the flexibility and interactivity of content production and distribution. This article mainly focuses on the legal risks that may be faced by production entities under the PGC mode when producing micro-short dramas. Under the PGC mode, the production contractors are usually professional institutions such as film and television production companies, MCN agencies and online platforms, which are responsible for the overall planning, organization, implementation and management of the project, and carry out shooting, editing, post-production and other work based on the works provided by copyright holders. As the production party of micro-short dramas, production contractors shall pay attention to the following legal risks:

(I) In the process of filming online micro-short dramas, the producer usually encounters issues concerning the ownership of rights, and shall attach importance to the stipulations on intellectual property rights, so as to avoid intellectual property risks arising from the absence of relevant stipulations or ambiguous stipulations.

Although online micro-dramas have the characteristics of low cost, short production cycle and diversified monetization methods, they still cannot be separated from the concept of "drama", and as audiovisual works, they fall within the scope of protection of China's Copyright Law. The intellectual property ownership issues encountered during the production of online micro-dramas are similar to those of other audiovisual works. Take scripts as an example: during the production process of online micro-dramas, the undertaking producer usually obtains the IP copyright first. During the production and filming phase, screenwriters and directors may make multiple revisions to the script, thus involving relevant issues concerning the intellectual property rights of the script.

(II) The production party shall generally conclude contracts with directors, actors and other personnel, pay due attention to the stipulations on the rights and obligations of all parties concerned, and avoid legal risks arising from contract disputes.

In micro-short drama production contracts, the contents generally include personnel contracts concluded with directors, actors and other relevant personnel, as well as post-production contracts concluded with teams or staff engaged in editing, visual effects and other work. Such contracts usually stipulate the following basic clauses: service term, service location, scope of services; service fees, payment methods, other expenses and benefits; rights and obligations; intellectual property rights and related rights. On the basis of the aforesaid basic clauses, the contents of the contract shall be adjusted and supplemented accordingly in light of differences in the roles, attributes, complexity of participation in production and level of importance of different personnel in the micro-short drama production process.

(III) The Contractor shall review the content of micro-short dramas to avoid legal risks arising from the content's violation of laws, regulations and regulatory policies.

The author once noted in the article *Interpretation of Regulatory Policies for Micro Short Dramas: A Trend of Good Money Driving out Bad Will Take Shape in the Micro Short Drama Market* that content regulation over micro short dramas is becoming increasingly stringent. The regulation covers prohibited content categories for micro short dramas: content harmful to China's national image, bloody and violent content, vulgar and pornographic content, among others, are all listed as prohibited content. It also specifies the potential consequences for non-compliance with regulatory requirements, including ordered rectification, mandatory take-down, deregistration of record-filing, and suspension of access services.

The National Radio and Television Administration (NRTA) also stressed the need to "scale up support for high-quality works" in the *Notice on Relevant Work Concerning Further Strengthening the Administration of Online Short Dramas and Implementing the Creation Improvement Plan*, and required relevant entities to strictly exercise control over the orientation, title, content, aesthetic value, staff qualifications, cast and crew remuneration, publicity and broadcast of online short dramas. All these requirements reflect that at the NRTA level, the expected development direction of online short dramas is to improve creation quality and strictly guard against "low-level 'red' content".

Therefore, production undertakers of micro-short dramas shall pay special attention to the content of such dramas. On the premise that the drama content does not violate any laws and regulations, they shall also focus on improving the content quality of micro-short dramas. Only by complying with the guidance and provisions of relevant policies can they achieve long-term development.

(IV) During the production of micro-short dramas, the production contractor may face civil legal disputes involving personal injury, property damage, tort liability and the like.

The production and filming of micro-short online dramas involves a wide range of aspects. Apart from signing contracts with directors, core creative personnel, post-production staff and other working personnel, it also involves legal issues related to filming sites, props, music, portrait rights, accidents, etc. For example, the production contractor shall assess the possibility of personal injury, property damage and unexpected incidents in the process of micro-short online drama filming as well as relevant response measures, so as to determine whether to purchase corresponding insurance. For another example, the production contractor shall verify whether the use of photos, dolls, ornaments and other objects as furnishing and decorative props in scene arrangement involves infringement, and whether the use of excerpts from other TV dramas, films, game footage, songs and other contents in micro-short online drama clips also constitutes infringement. The aforesaid legal issues are relatively complicated and professional, so the production contractor shall conduct compliance analysis in advance.

III. Compliance Recommendations

(I) When signing a contract, the contractor shall attach importance to the formulation of corresponding clauses, so as to avoid legal disputes.

The filming and production of micro-short dramas involve a wide range of legal issues. Depending on the differences in investment costs and production scale, the number of personnel involved varies accordingly. Taking directors, actors and post-production staff as representatives, the author briefly outlines the legal clauses that the production contractor shall pay attention to when executing contracts.

1

Key Clauses for Attention When the Production Party Enters into a Contract with the Director

The work of a director usually covers three phases of micro-short drama production, namely the pre-production preparation phase, the shooting phase and the post-production phase. When executing the contract, the parties shall specify the director's work responsibilities at different phases as explicitly as possible. If there is follow-up work requiring the director's coordination and fulfillment after the shooting of the micro-short drama is completed, such as subsequent promotion and publicity work, or other work generally performed by the director under industry practice, it is recommended that such items be explicitly listed one by one in the contract to avoid subsequent disputes arising from work division and coordination issues. Second, the production contractor shall check whether the contract contains clauses related to the production requirements and standards for the micro-short drama. To ensure the quality of the finished drama, the two parties may stipulate the quality and standards for the fulfillment of the director's work responsibilities. Third, the production contractor and the director shall reach an agreement on copyright and relevant rights. Generally, the production contractor holds the copyright of the finished micro-short drama, and the director enjoys the right of authorship. If the director's name and portrait need to be used in subsequent publicity and promotion activities, the two parties shall also specify the authorized use of relevant rights in the contract. Finally, the author hereby reminds that attention shall be paid to the stipulation of clauses on liability for breach of contract and contract termination. The director plays a pivotal role in the production and shooting of micro-short dramas. While the production contractor and the director explicitly agree on work responsibilities, remuneration, as well as the rights and obligations of both parties, the production contractor shall carefully examine the clauses on liability for breach of contract and contract termination to safeguard its legitimate rights and interests.

2

Clauses to Which the Producing Party Shall Pay Attention When Concluding Contracts with Performers

The contract concluded between the production party and the performers usually explicitly specifies basic information including the roles to be played by the performers, filming locations, work contents, term of service and remuneration. To safeguard the rights and interests of the production party, the performer service contract usually sets out the obligations of the performers in detail and contains explicit stipulations on intellectual property rights.

On the one hand, as performers, actors provide work deliverables including character images, stills, names, voices and audio-visual materials for the micro-short dramas they perform in. The two parties shall make stipulations on the relevant intellectual property rights of the works to avoid subsequent disputes over rights ownership. On the other hand, after the production of a micro-short drama is completed, actors are usually required to cooperate in publicity work. The two parties may make stipulations on the follow-up publicity and promotion work of the actors. In the meantime, given that actors' images also have a certain impact on the broadcast and publicity of micro-short dramas, it is recommended that actor warranty clauses be added to the contract, under which actors shall warrant that they abide by laws and regulations, observe ethical norms and comply with public order and good customs. The production of micro-short dramas usually involves principal actors, ordinary actors and extras, and the content of the contract shall be adjusted according to different roles.

3

Key Clauses to Be Noted by the Production Contractor When Concluding Contracts with Post-Production Personnel

Post-production involves complicated and diversified contents, including video editing, material processing, professional color grading, subtitle special effects, etc. The Undertaking Party may either entrust the entire post-production work to a cooperating party and sign a single contract therewith, or divide the post-production work and entrust the separate parts to different service providers respectively and sign multiple contracts accordingly. In post-production service contracts, apart from basic clauses, the Undertaking Party shall pay attention to the stipulation of clauses on delivery standards and acceptance of work results.

(II) In respect of the filming sites and props involved in the production process of micro-dramas, conduct compliance consultation and review in advance to avoid infringement upon relevant rights.

Due to differences in context, props and usage scenarios, specific legal risks shall be analyzed in light of the actual circumstances of each micro-short drama production. The author takes the use of photos as props as an example for a brief analysis. First, it is necessary to determine whether the photos used as props constitute photographic works. The Berne Convention lists photographic works as one category of works, and photographic works are protected under the Copyright Law of China at the same time. It should be noted that not all photos qualify as photographic works. Shooting may serve as both a means of creation and a means of reproduction. For example, mere photographic reproduction of documents or two-dimensional artworks lacks originality due to the absence of room for creative expression, and thus shall not be protected as photographic works. Second, unauthorized use of photographic works as props may infringe upon the right of reproduction, the right of communication to the public via information networks, as well as the right of authorship enjoyed by the copyright holder. In addition, if specific natural persons are depicted in the photos, disputes relating to the right of portrait, right to privacy and other related rights may arise accordingly. As can be seen from the foregoing, the production of micro-short dramas involves a wide range of aspects. When using materials, depending on factors including the type of materials and the method of use, tort disputes may be triggered. The production party shall conduct prior review and formulate corresponding response measures.

IV. Summary

As the most critical link in the shooting, production and online release of micro-short dramas, the production undertaker bears heavier responsibilities. Therefore, the author hereby reminds that although micro-short dramas have the advantages of low production cost and short production cycle, relevant regulatory policies have been tightened. All production undertakers shall pay attention to relevant policies, and attach special importance to the risks mentioned herein during the production of micro-short dramas, so as to avoid adverse impacts on the online release of micro-short dramas and consequent unnecessary losses.

Author of This Article

Yang Luting, Lawyer

Attorney Yang Luting graduated from the University of Paris II Panthéon-Assas, and her main practice areas include dispute resolution, corporate compliance, intellectual property rights, among others.

E-mail:

aliceyangluting@TYGlobe.com

Yin Sisi, Lawyer

Attorney Yin Sisi graduated from East China University of Political Science and Law. Her practice areas cover civil and commercial dispute resolution, intellectual property rights and corporate compliance. She has simultaneously provided professional legal consultation on compliance and full-process compliance services for a number of enterprises.

E-mail: yinsisi@tyglobe.com

Interpretation on Regulatory Policies for Micro-Short Dramas: The Short Drama Market Will Witness the Formation of the Trend of Good Money Driving Out Bad Money

Legal Risks and Compliance Recommendations for the Micro-Short Drama Industry (Part I)