How to negotiate the net's legal minefield

“Nothing good has come from the internet, period,” said Sony Pictures Entertainment CEO Michael Lynton, speaking on an industry panel in the US recently. Such is the lament of many in the film industry, and in June 2009 the facts do rather support the view.

No-one yet has the answer to commercially successful online film distribution. But it will come - it has to. The internet is the perfect medium for the marketing and distribution of movies. It permits impulse selection of titles by consumers and breathes life into back catalogues. The technology even permits HD viewing. And then there is the download generation - young adults who have only known a world in which the internet occupies the greater part of their work and leisure time. The law scrambles to keep pace. But there is law - and protection - and more than you might think.

Any event focused on internet media distribution is likely to discuss rights. Vital though these are, it is important to understand all the other legal issues that affect how you make your film available on the internet. When distributing film over the internet from the UK, for instance, there are up to 17 different pieces of legislation with which to comply. The following are just a few of them.

If you want to use the internet to self-distribute and garner your own database of recipients for your content, that’s fine - but you must be registered under the Data Protection Act 1998 if those users are within the EU because you will be collecting personally identifiable information.

The Act also restricts what you can do with the data. You can’t simply make that database available to third parties who then market directly to your registered viewers. It makes sense to viral market other services which have some connection to your film. It is usually best to simply offer third-party providers of related services or products the ability to market to your database through your website, having first obtained the consent of your users. If you enter into online advertising revenue share deals, once again ownership of the database of visitors between you and the advertisers on your site must be considered carefully.

How you promote your film online is governed by laws. If you offer merchandise or sell DVDs via your site there are the Distance Selling Regulations which give your online consumers the right to return products within seven days.

If you enter into strategic revenue-share or linking arrangements with other website operators, you’ll stray into several areas attracting legal governance.

Attempt to raise money for your production online through crowd funding and you’ll hit regulatory financial rules square on.

We’re only at the beginning of the internet story in terms of media distribution. We don’t yet understand fully the opportunities nor how they can be monetised - but they are there and they will be made profitable. What is clear is the internet will only become more sophisticated in the manner users will search for and find content. Its capacity for transmission of bandwidth-hungry media will improve, and the audience comfortable with accessing media content online increases daily.

Andrew Sparrow is author of “Film And Television Distribution And The Internet”. He is a lawyer and founder of London-based niche new-media law firm Lecote.