In the creative industries, contracts are the bedrock of any rights and royalties arrangement. Whether you're licensing film, TV, music, books or digital content, your contracts define who can use your work, where, for how long, and at what cost.

But too often, rights holders (whether they’re independent producers, distributors or IP owners) are caught out by contractual oversights that impact their earnings, rights protection, or legal position. At Lockside Media Services, we regularly review agreements and advise clients on avoiding these costly pitfalls.

Below, we outline five of the most common contract mistakes and share practical tips on how to stay protected and profitable.

1. Vague or Missing Rights Definitions

The Problem

One of the most frequent mistakes we see is ambiguous or incomplete rights descriptions. If the contract doesn’t clearly define what rights are being licensed - territory, term, right type -  it leaves room for confusion or misuse.

For example, a deal that generically references “digital rights” may be interpreted very differently depending on whether it includes streaming, downloads, or even social media clips.

The Fix

Always ensure your contracts include a comprehensive rights schedule, detailing:

• Format (e.g. TV broadcast, VOD, theatrical)
• Territory (e.g. UK only, worldwide)
• Duration of term
• Any exclusivity clauses

A clear definition now avoids disputes and revenue loss later.

2. Underestimating Royalty Clauses

The Problem

Royalty terms can be complex and are often glossed over, especially in long-standing relationships. Common issues include:

• Incorrect royalty rates
• Missing or vague recoupment terms
• Ambiguous net vs. gross definitions

These can lead to underpayments or missed income over time.

The Fix

Carefully review:

• How royalties are calculated (gross, net of certain costs)
• When and how often royalties are reported and paid
• Recoupment structures (especially in co-productions)

At Lockside, we help rights holders model these terms to ensure they’re realistic, enforceable, and beneficial.

3. Inadequate Audit Rights

The Problem

Without proper audit clauses, you may have no legal right to verify whether royalties are being reported accurately. And even if the right exists, limitations on access, timing, or methodology can make it ineffective.

The Fix

Include a robust audit clause in every agreement. This should specify:

• How often audits can be conducted
• Who can conduct them (e.g. an independent third party)
• Access to books and systems
• A defined timeframe (ideally covering at least 3–5 years retrospectively)

This gives you the tools to hold partners accountable and recover missed revenue.

4. Overlooking Termination Triggers

The Problem

Many contracts don’t include clear, fair exit routes. If a partner breaches terms or underperforms, you may find it difficult to reclaim your rights or relicense your content elsewhere.

The Fix

Ensure your contracts include termination clauses that cover:

• Breach of contract
• Non-payment
• Insolvency
• Failure to exploit the content

These safeguards allow you to retain control over your IP in the event of non-compliance or market changes.

5. Failing to Future-Proof the Agreement

The Problem

The media landscape evolves rapidly, but many contracts remain stuck in the past. Omitting newer platforms (e.g. TikTok, FAST channels, NFTs) can lead to revenue leakage or disputes.

The Fix

Build in flexibility and forward-looking language to capture:

• Emerging platforms and technologies
• Revenue-sharing models for future formats
• Reversion clauses to regain unused rights

Our team regularly updates contract templates for clients to reflect current and emerging distribution models.

Summary: Smart Contracts Lead to Smarter Business

Rights and royalties contracts aren’t just legal paperwork they're essential business tools that protect your income and your IP. The five mistakes above are all avoidable with expert guidance, regular reviews, and a focus on clear, comprehensive language.

At Lockside Media Services, we offer contract review and advisory services that go beyond legal compliance. We help you negotiate smarter terms, avoid costly surprises, and structure agreements that support your long-term goals.

Need a second set of eyes on your next contract?
Let’s talk about how we can help safeguard your creative assets.