Who Profits from Journalism IP Sales?

When feature stories become movies and podcasts, freelance journalists might be left empty-handed.

While ad revenue capsizes and all but the biggest publications struggle with subscriptions, the media industry has fixated on a new source of revenue: intellectual property. An article could just be an article — or it could be repackaged as a podcast, miniseries, or feature film. Despite Google and Facebook, Hollywood studios are still doing just fine, and they’ll pay for compelling stories.

This was the impetus behind the 2013 launch of Epic Magazine, a platform for longform journalism meant to be sold as IP rather than monetized through subscriptions or advertising (the company also produces sponsored content through). Founder Joshua Davis recalled co-founder Joshuah Bearman’s pitch going something like this: “Money from journalism seems to be drying up, and journalism in general seems to be heading in a different direction than we are headed, and maybe we should band together and see if we can try and make this ancillary revenue support what feels to be a dying art.”

Davis agreed. Both longform journalists who wrote only a few stories per year, they were troubled by the slimming down of lengthy features (a casualty of print’s financial trouble) and the rise of clickbait (a byproduct of a new digital advertising-based revenue model). But both had managed to option lengthy features to movie studios. Bearman had written the Wired article that would become Academy Award-winning, Ben Affleck-starring Argoand Davis had written a Wired article that would be made into 2015 drama Spare Parts. They thought these options could rake in enough money to subsidize the art of longform. “I kind of felt like the ship was sinking and maybe this was our life raft, or maybe it was an entirely new ship we were building,” Davis said.

Six years later, that new ship has set sail — Vox Media recently acquired Epic Magazine, allowing Epic to expand and Vox to more readily court Hollywood. (Rumor has it that the deal was in Vox Media stock rather than cash; neither Vox nor Epic commented on its structure.) It also signals an eagerness from digital media companies to more thoroughly invest in IP as the streaming content wars show no sign of stopping. In 2011 Condé Nast likewise established its own entertainment division, Condé Nast Entertainment, which it has used to adapt the intellectual property from its own publications rather than courting film studios.

While IP might be a good sideline for media companies, the rush to monetize makes it harder for freelance writers to profit in the same way. Independent writers are fighting off predatory contracts to keep the rights to their own work. Even Jeff Maysh, who last year inked a $1 million deal with Matt Damon and Ben Affleck to adapt his story about a McDonalds lottery scam artist, told Study Hall that contracts are lately more strict. “Overall, negotiating for these rights has become harder. I have in one instance negotiated a smaller commission fee in exchange for all rights, with a story I felt might be interesting to film and TV folk,” Maysh wrote in an email.

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Davis said that he does not write or commission stories for Epic based on how successful they may be as scripts. He writes and commissions stories he wants to read, he explained, and those stories often happen to fit the mold of a successful screenplay. “It’s a roll of the dice, because you don’t know if it’s going to generate money after it publishes,” he said. For example, he could not have predicted that “Little America,” an unassuming collection of immigrant stories, would get picked up by Apple and adapted into a series by Kumail Nanjiani.

“The reason it’s worked so far is the types of stories that we’re interested in are true stories about people that have gone through some dramatic experience, and our storytelling style tends to be scene-driven. We want people to feel like they’re seeing it as opposed to being told about it,” he said. “It turns out that that particular art form is oftentimes very useful in terms of seeing or understanding what a movie or tv show could be.”

It’s a very speculative process. Most stories do not make it to film or television. An option simply means that a studio has the right to adapt a project for a limited amount of time — the studio will pay out a fraction of the option price right off the bat, but the writer or publication signing away the rights won’t see the full sum unless their project actually makes it to the screen. Davis estimates he and Bearman individually have had 10 projects optioned, and out of those 10 they’ve only seen one successful adaption each. That’s a ten percent success rate, which Davis says is unusually high.

Because option payments alone are not enough to sustain a publication with such a relatively low production rate — Epic plans on publishing just 12 stories this year — Epic has maintained a “first look” deal with 21st Century Fox, giving Fox first dibs on any new stories in exchange for a fee. Epic also cuts co-publishing deals with publications that otherwise couldn’t fund such sprawling longform work — for example, it teamed up with New York Magazine to co-publish a story from Patrick Burleigh about living with a rare genetic mutation that caused him to go through puberty as a toddler. “For us, we’re able to recoup a little bit of the money we spent up front and reach a broader audience than we would reach on epicmagazine.com on is own,” said Davis. “So it seems like a win-win to me.”

Davis said the magazine splits the rights and accompanying profits with the writer of the piece, though the exact math depends on whether the writer came up with the idea themselves or was assigned the piece by Epic. Neither Davis nor a spokesperson for Vox would clarify the exact percentage of the fee that goes to the writer.

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Journalists with extensive experience in negotiating rights contracts and in having their work optioned invariably told Study Hall two things: that Writers should fight tooth and nail to retain all rights to their own work, but also doing so has become increasingly difficult.

“Publications are catching on to the idea that you can option stuff for a relatively nice amount of money, so they’re trying to hold onto that as much as they can, and it’s getting harder to convince publications to give you the film and TV rights,” said Geoff Manaugh, who currently has two stories being turned into movies and one being adapted into a TV show. Eight of his stories have been optioned.

The trend is based on a desire for authentic storytelling, whatever that might mean. Studios are eager to deploy the words “based on” in movie trailers, Manaugh observed. “It’s totally crazy that people seem to think it validates the project if they can have IP that it’s based on,” he said. “For some reason, original content doesn’t have the allure it should have.”

Davis said he noticed a shift in the way media companies viewed IP shortly before launching Epic with Bearman. He had been a contributing editor at Wired, a Condé Nast title, since 2004, and in those days independent contractors retained the rights to their own intellectual property — which makes intuitive sense, as independent contractors are not employees — but that has since changed. About six years ago, said Davis, Condé Nast revised their contracts to assert greater control over the ancillary rights to freelance work. Bearman and Davis personally were spared, as there were exemptions for writers who had a New York Times bestselling book or had a film based on their work.

Guy Lawson, who wrote the book that would be adapted into War Dogs, suspected the rise of streaming services has created a race for new content. “Hollywood has always been attracted to true stories, [but] I think the appetite for what they call content has really grown with these new places like Netflix and Amazon and Apple,” he said. Streaming services want these true stories, but they don’t know how to find them on their own, he reasoned, so they look to journalism.

For both Manaugh and Lawson, IP sales have been financial help even while freelance rates stagnate. “Not for nothing, the pay in magazine writing has basically gone nowhere or gone down in 20 years,” Lawson said. “So that’s become a significant piece of how I can keep feeding my children and pay rent on my office.”

Even as they encounter predatory contracts and increased difficulty in negotiations, Manaugh and Lawson, like Davis and Bearman, have the benefit of having had their work successfully optioned and adapted. They also have agents fighting on their behalf. New writers may not necessarily have these advantages, and put in a position of signing a bad contract or turning down a few thousand bucks for the rights.

“These magazine companies are suffering financially, trying to find ways to monetize their content, and the way that they’re doing it the people who are suffering are the writers,” said Lawson. “We’re always at the low end of the totem pole.”

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