TL;DR
- Creators are making money, and where there’s money the lawsuits will follow. There are ways of avoiding getting tangled in them, explains top creator economy lawyer Tyler Chou.
- Chou explained how creators can protect themselves, their creative output, and their business company from unscrupulous brands, agents, platforms and “partners.”
- She noted that many creators don’t hire the right people or give those people the necessary contracts. This can come back and bite them.
Are you unwittingly breaking the law with your online content? Top creator economy lawyer Tyler Chou warns of trap doors into which many TikTok, YouTube, LinkedIn and other creators can fall.
Speaking at the 2024 NAB Show (watch the full session here), Tyler Chou, founder & CEO of Tyler Chou Law for Creators, said, “Creators are getting screwed left and right and there’s no one to protect them.”
No one except Tyler Chou, perhaps. She was a one-time lawyer for major studios, producers and stars, but she has been operating on behalf of the creator community for the last few years.
“You know, there are accidental millionaires, YouTubers, who don’t have their businesses set up, they don’t have insurance, they don’t have agreements in place. And that’s where I come in and help them professionalize and become a legitimate business owner.”
Creators commonly don’t think of themselves as a business — and that’s their first mistake.
“They just don’t think of themselves as being vulnerable to any liability,” Chou said. “All of your personal assets are touchable in a lawsuit. So, the first thing to do is set up a limited liability company.”
A limited liability company, or LLC, is a legal entity which will offer some protection.
“Creators are very cost sensitive,” she said. “If there’s no reason for them to spend money, they’re not going to do it. Most creators come to me because either someone has stolen their IP, or a brand has not paid. And, by the way, it’s not the brand who doesn’t pay. It’s the creative agencies who don’t pay.”
She noted that many creators don’t hire the right people or give those people the necessary contracts. This can come back and bite them.
“A lot of creator channels will hire their friends or some fan in their community. They’ll come edit their videos, and then they’ll leave after six months having learned all of your secrets and they leave to start their own channel.”
If there’s no agreement in place, no non-compete clause, for example, there’s little stopping them.
Creators also need to make clear that when they talk about a product in a post, and they’re getting paid for it, that they are being sponsored.
Kim Kardashian was fined $1.26 million by the Securities and Exchange Commission for promoting a crypto asset without disclosing the payment she received for the promotion.
READ MORE: SEC Charges Kim Kardashian for Unlawfully Touting Crypto Security (SEC.GOV)
“That’s a cautionary tale of not putting all the disclosures in there,” Chou said. “The Federal Trade Commission is taking it seriously because they realize that creators are a huge marketing arm for so many brands now. Brands are using creators in a way that traditional marketing can’t touch anymore.”
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