Streaming Regulation

The Draft Bill 8.889/2017 (“PL do Streaming”) advanced materially: the Draft Bill that aims to set rules for Video-on-Demand (VoD)/streaming, including the Contribution for the Development of the Brazilian Film Industry (“Contribuição para o Desenvolvimento da Indústria Cinematográfica Nacional – CONDECINE”), Brazilian-content quotas and independent-production incentives was approved by the Chamber of Deputies in November 2025 and moved to the Federal Senate, where it is currently being discussed under an urgent procedure. 

Local Content and Independent Production

Streamers and international producers continue to seek Brazilian projects, production services, and co-productions, driven by global demand for local-language content. It is important to highlight Brazil’s international visibility growth, pushed by the recent awards-season momentum. 

Public Funding and Co-Production

Following an extended period during which public funding for the entertainment industry was either suspended or substantially curtailed, the Brazilian National Film Agency (“Agência Nacional do Cinema – ANCINE”) and Brazilian Audiovisual Sector Fund (“Fundo Setorial do Audiovisual – FSA”) calls regained their importance, including lines dedicated to regional productions and international co-production opportunities, increasing the need for careful chain-of-title, recoupment, public-funding and independent-producer structuring. 

⁠Sports Media Rights in Digital and Creator-Led Platforms

CazéTV/LiveMode’s role in live-streaming all FIFA World Cup 2026 matches in Brazil is a clear example of the growing importance of YouTube, influencers, and hybrid sports-entertainment rights models. 

Advertising, Influencer and Creator Deals

The Brazilian National Advertising Self-Regulation Council (“Conselho Nacional de Autorregulamentação Publicitária – CONAR”) updated its influencer advertising guidance in 2026, expanding the concept of influencer advertising and addressing avatars, virtual profiles, AI-generated content, child participation and transparency duties. 

⁠Sports Betting Regulation

As of January 2025, licensed betting operations became mandatory. Entertainment, sports and advertising deals have placed more emphasis on regulatory compliance, advertising restrictions and brand-safety provisions.

Creator Economy and Influencer-Led Content

Brazil remains one of the world’s largest creator markets and continues to see significant growth in influencer-driven content, branded entertainment and creator-owned intellectual property. Brands are allocating an increasing share of their advertising budgets to digital creators, who are evolving into full-scale media businesses.

Sports Streaming and Digital Sports Media

Sports events continue to represent one of the most valuable segments of the Brazilian media industry. Recent acquisitions of major sports rights by digital players, such as the CazéTV/LiveMode case previously mentioned, have reinforced the importance of streaming, sponsorship and digital distribution.

Long-Form Streaming Series and Local Original Productions

Long-form scripted and unscripted productions remain important drivers of transactional activity. Streaming platforms continue to invest heavily in Brazilian content, particularly local-language drama series, documentaries, true-crime productions and international co-productions.

Micro Dramas and Vertical Video Content

One of the most notable emerging formats is the rise of micro dramas (vertical dramas or short-form serialised content). Although still in its early stages of development, the format is attracting attention from Brazilian producers, creators and investors.

Podcasts and Digital Audio Content

Growth in podcast consumption and advertising revenues has led to increased investment in original audio content, branded podcasts and video podcast formats, generating opportunities related to talent collaboration, advertising partnerships, content licensing and cross-platform exploitation.

Live Experiences and IP Extensions

Producers, broadcasters, streaming platforms and creators are increasingly seeking to monetise successful intellectual properties and brands through live events, immersive experiences, merchandising and consumer products, opening space for a broader exploitation of properties toward multi-platform.

Creator Economy

Brands, agencies, production companies and media groups are increasingly entering into long-term partnerships with creators. The creator economy's rapid growth in Brazil is contributing to a significant increase in sponsorship, branded content, and digital media transactions. 

Sports Media

There is a clear shift from traditional broadcasters toward digital-first platforms, streaming services and creator-led media in Brazil. Acquisitions, sublicensing arrangements, advertising deals and digital distribution agreements are increasingly prominent as sports consumption shifts to online platforms. 

Micro Dramas and Short-Form Content

There is increasing interest in micro dramas and vertical-video content. Players have begun exploring new financing, licensing and distribution models for mobile-first serialised content. This model has generated an increase in transactional activity involving format rights, content acquisition and partnerships.

Intellectual Property Ownership and Multi-Platform Exploitation

Players are placing greater value on retaining intellectual property. For example, transactions tend to cover not only audiovisual exploitation, but also licensing, live experiences, gaming adaptations, audio formats and other derivative uses. This trend shows an industry model moving towards franchise-building and long-term IP exploitation.

Over the last twelve months, the Brazilian industry has not seen the development of new back-end participation structures. In the audiovisual market, especially in audiovisual productions commissioned by streaming platforms, the prevailing model continues to be the buyout, under which producers and talents receive a fixed fee in exchange for the full assignment of their rights.

Regarding independent productions, international co-productions and creator-led projects, there has been a cautious evolution in the way the back end is structured. Parties have increasingly sought a more objective compensation structure, which may include:

• Producer’s Net Receipts (PNR) or Producer’s Net Revenue participation;
• revenue-sharing arrangements linked to specific exploitation windows or territories;
• corridor structures;
• waterfall-based recoupment models;
• performance-based bonuses; and
• participation in revenues derived from remakes, sequels, spin-offs, merchandising and other ancillary exploitations.

Disputes regarding back-end participation in Brazil are not common, and when they do arise, they usually do not arise from the existence of the back-end participation itself, but rather from the verification of the amounts payable. Disputes usually include:

• definition of net revenue or net profits;
• lack of audit rights and transparency;
• recoupment waterfall interpretation;
• streaming-related performance metrics;
• cross-border exploitation and collection of revenues; and
• ancillary and derivative exploitation.

Financing structures have continued to develop in response to changing audience behaviour. While the theatre audience remains below pre-pandemic levels, there is a clear increase in the audience consuming audiovisual content through streaming platforms. In this respect, the theatrical box office has turned into a less reliable source of recoupment for most of the projects.

As a consequence, producers and financiers have placed greater emphasis on financing models that are less dependent on theatrical performance, with an increase in:

• pre-licensing and commissioning agreements with streaming platforms and international co-productions, allowing producers to have public incentives and private financing, sometimes from multiple jurisdictions, in the same project;
• public funding programmes, tax incentives and regional cash rebate structures;
• private equity and gap financing, mostly for independent productions; and
• brand partnerships and commercial sponsorships.

In the case of productions commissioned by streaming platforms, the financing structure is mostly secured through upfront licence fees, which can be combined with private investment agreements from the same streaming platform or buyout deals, rather than through the expectation of future box office revenues. As a result, the commercial viability of many projects is now assessed based on the distribution commitments and financing packages, rather than the projected theatrical performance.

In addition, public funding remains highly important, and producers are increasingly combining traditional public incentives with private investment and international financing sources, leading to more sophisticated financing structures.

International co-productions, especially with partners in Europe and Latin America, are common in Brazil, and they require parties to navigate different legal frameworks, business and cultural practices.

These deals typically require a detailed alignment between local and foreign legal requirements, especially in connection with copyright ownership, chain of title, talent engagement, tax aspects, foreign regulations and compliance with the Brazilian audiovisual regulatory framework.

To minimise cross-border risks it is crucial to:

• define from the outset which producer will be responsible for regulatory compliance in each jurisdiction;
• implement administrative guidelines that determine how creative, financial and production decisions will be made throughout the project;
• co-ordinate production and finance schedules to meet the regulatory approvals, incentive programmes and delivery obligations applicable in each territory; and
• maintain a relevant involvement of legal and tax consultants in each jurisdiction to address from a local perspective all the legal obligations and regulatory requirements throughout the production.

In the case of projects that receive public funding or tax incentives, special attention must be directed to compliance with ANCINE regulations, expenses-reporting requirements and the specific obligations attached to each financing mechanism.

It is also advisable for international co-productions to be negotiated and documented in English, with a neutral governing law and jurisdiction, even where none of the parties is based in an English-speaking jurisdiction. This decision also facilitates the deals with international financiers, distributors and streaming platforms once it provides a single contractual language and framework for all participants.

Nowadays, COVID-19 provisions have largely disappeared from agreements. However, the pandemic led to a more detailed approach to risk allocation, with a greater focus on force majeure events, production delays and suspension, insurance coverage and contingency plans.

The Brazilian industry has not been directly impacted by the most recent SAG-AFTRA and Writers Guild of America (WGA) negotiations. However, productions involving Brazilian writers, actors and directors who have a relation with US guilds have increased, and, as a consequence, there has been more attention paid to topics such as residuals and AI-related issues. These topics are appearing more frequently in negotiations, particularly in projects involving international studios and streaming platforms.

In Brazil, professional associations and unions, such as the Brazilian Association of Screenwriters (“Associação Brasileira de Autores Roteiristas – ABRA”) and Brazilian Film and Audiovisual Directors (“Diretores Brasileiros de Cinema e Audiovisual – DBCA”), continue to play an important role. However, unlike the US guild system, Brazilian unions in general have less influence over the industry-wide contractual standard terms and collective bargaining. The Brazilian unions and associations' activities are mainly focused on labour rights, working conditions, professional accreditation requirements and discussions regarding the impact of new technologies. These organisations remain relevant stakeholders; however, up until now, deal terms have been generally negotiated on a project-by-project basis rather than through collective bargaining agreements.

From a Brazilian entertainment industry perspective, strikes have not historically played a relevant role in Brazil, and no significant change in dynamics that could lead to a shift in the balance of power between talent and studios is currently being seen. Nevertheless, international discussions related to topics such as AI protections, intellectual property participation and working conditions have increased awareness and conversations among Brazilian talent and producers.

Brazilian non-traditional content creators such as podcasters, YouTubers and digital influencers usually work without a relationship with guild and union structures. In this respect, they have not been exposed to the same amount of union-related issues seen in more developed guild systems, such as those in the United States. However, as creators are increasingly engaging in professional audiovisual productions and playing a relevant part in the entertainment industry, potential issues may arise regarding labour rights, collective representation and the application of industry-specific regulations, especially in projects led by traditional production companies, international studios and streaming platforms.

Brazilian audiovisual production responds, directly and measurably, to public funding policy. The time series compiled by Brazil's National Cinema Agency (ANCINE) points to a direct correlation between the availability of tax incentives and the number of titles released, with a lag of one to two years.

Three moments in recent history of Brazil's audiovisual sector stand out as turning points. The first was the slump that followed the dissolution of Embrafilme in 1990. The second came with the Audiovisual Law, in force since 1993, which set off a production boom that Brazilians came to call the "Retomada", or Revival. The third was the contraction tied to the freezing of the Audiovisual Sector Fund (FSA) between 2019 and 2021.

In macroeconomic terms, the sector generated about BRL70 billion and supported 608,970 jobs in 2024, which is roughly 0.5% f Brazil's GDP. Once funding resumed, public support reached BRL1.41 billion in 2025, its highest level in ten years.

The Main Pillars of Brazilian Audiovisual Funding

Brazil's audiovisual policy rests on three main instruments.

The first is tax relief, known as "indirect support," delivered through the Audiovisual Law (Law 8,685/1993) and the Rouanet Law (Law 8,313/1991). Both of these allow taxpayers to redirect part of what they owe toward approved projects.

The second is direct investment, "direct support", through the FSA, created by Law 11,437/2006 and administered by ANCINE, which channels money into production, distribution and infrastructure.

The third is a set of content obligations, such as quotas on Pay TV and in movie theatres, alongside a federal levy, the Contribution for the Development of the National Film Industry (CONDECINE). Both were established by Law 12,485/2011, the Pay TV Law.

Beyond the federal framework, states and municipalities run funding mechanisms of their own.

Since 2001, ANCINE has been the single body regulating and managing these mechanisms.

South America's jurisdictions compete for audiovisual productions through two main instruments: the cash rebate, which refunds part of what a production spends locally, and the transferable tax credit.

Colombia runs the most aggressive policy in the region, with a rebate of up to 60% and a 35% tax credit on investment made in the country. Uruguay, Chile and Argentina have significant schemes of their own. Brazil, by contrast, offers no cash rebate at the federal level, only at the state level, as in the programmes run by SPCINE and RioFilme, in São Paulo and Rio de Janeiro respectively. That gap leaves the country at a disadvantage against its South American neighbours.

For a Brazilian producer, these incentives pay off only when the work is structured as an international co-production recognised by ANCINE. The framework set by Provisional Measure 2,228-1/2001 and the agency's normative instructions requires a minimum equity stake from the Brazilian side, together with a set share of Brazilian cast and crew on the production. Those requirements, in turn, have to be reconciled with the nationality rules of the host country.

Accessing cross-border tax incentives such as cash rebates, transferable tax credits and co-production funds should not be a purely financial decision. For an audiovisual producer, it is likely that the benefit will become a real cost reduction only if the audiovisual work obtains nationality in every jurisdiction involved, if the ownership structure fits the requirements of both countries, and if the nationality quotas for professionals on each side can be reconciled.

It is equally important to verify whether the final say over creative, editorial and administrative matters can end up resting with a producer of a particular nationality.

In the Brazilian market, three layers overlap:

• qualifying the work as an international co-production recognised by ANCINE, which depends on Brazil's web of international treaties and agreements and, with it, on meeting the applicable requirements;
• the tax costs that may fall on international remittances involving certain jurisdictions; and
• the mechanism in the Audiovisual Law that allows a foreign taxpayer to invest part of the tax owed on remittances in a Brazilian co-production.

Qualifying in Brazil as an International Co-Production

In Brazil, international co-production is the instrument that confers dual nationality, under Provisional Measure 2,228-1/2001 and ANCINE's normative instructions. Such recognition comes in two stages: a Provisional Recognition, which already qualifies the project to raise Brazilian incentives, and a Definitive Recognition granted at the end. For co-productions not covered by an international public agreement, the rules call for a minimum Brazilian equity stake of 40% and at least two thirds of the cast and crew to be Brazilian or resident in the country. However, where a treaty applies, the proportions it sets prevail instead.

A Piece of Advice

Checking ANCINE's website is essential to establish whether a given country has international co-production agreements with Brazil, and which local and international requirements apply, so they can be brought together in a private co-production agreement between the producers.

A clear trend is underway: financing for entertainment projects is moving away from pure public subsidy toward hybrid models, in which public money is deliberately structured to attract private capital and to share risk with it, while private capital, in turn, begins to co-invest alongside the public funds.

For decades, audiovisual funding was synonymous with non-repayable grants. Today, the toolkit also includes repayable instruments, instruments that require a return in equity and/or revenue, and instruments that depend on the provision of guarantees.

These newer mechanisms show that the paradigm has shifted. Faced with high risk and uncertain returns, public money now serves as catalytic capital to mobilise private investment. Examples include Fundo de Financiamento da Indústria Cinematográfica Nacional – FUNCINE, which channels private contributions through the capital markets with incentives such as income-tax deductions for investors, FSA investment schemes whose counterpart is the Fund's stake in the commercial results of the projects and in the companies' equity, and repayable loans extended by the FSA to projects.

The regulation of streaming, still under debate in the legislature, could open a new front of co-financing. As drafted, and if it passes, the incentive design would take the form of a levy of up to 4% on a company's revenues in Brazil, with the option to deduct 60% of the amount owed when the company channels those funds into the production of national content.

Based on the Brazilian copyright framework, authorship can only be attributed to a natural person. As a consequence, there is currently no legal basis for granting copyright ownership in content generated autonomously by artificial intelligence without a proven, meaningful human creative contribution.

There are ongoing discussions both in the academic and legislative sectors regarding the regulation of artificial intelligence, mostly including topics related to transparency, data training and liability. However, up until now, no specific legislation has determined copyright protection for works that are purely AI-generated. In line with this understanding, the prevailing view is that copyright protection remains completely related to human authorship.

The absence of human authorship creates practical challenges for AI-generated content, considering that, in the absence of a human creator, it may be almost impossible to establish ownership, require exclusive rights or even pursue infringement claims. Extra challenges arise when determining whether a work contains sufficient human creative contribution to qualify for copyright protection, especially in cases involving the use of generative AI tools as part of the creative process.

Until the present date, Brazil has not yet developed a relevant body of case law addressing the use of generative AI in connection with the creation of entertainment content. In the same way, up until now, there have been no landmark judicial decisions setting clear parameters regarding authorship, copyright ownership, or liability for AI-generated audiovisual, musical, literary works or any other entertainment content.

The current discussions are mostly occurring at the academic, legislative and regulatory levels and not yet through the judiciary. Most of the ongoing debates are centred on issues such as the use of copyrighted works for AI training, transparency requirements, attribution, liability for infringing outputs and the potential violation of image, voice and likeness rights.

An increase in the number of disputes involving AI-generated content is expected for the next few years, especially in connection with the entertainment and media industry, since the legal framework remains unsettled. To mitigate risks connected to the AI-assisted content creation, market participants are increasingly working on a more sophisticated contractual protection structure and on internal policies.

The Brazilian legal framework regarding the licensing of audiovisual content for AI training purposes is still not settled. While there is growing discussion around the topic, there is not yet an established market for licensing footage specifically for use in training generative AI models.

Nevertheless, producers and content/rights' owners are increasingly questioning the use of their catalogues and audiovisual content in connection with AI development. As a response to this issue, most of the new agreements involving content acquisition, licensing and distribution are beginning expressly to address AI-related uses, including specific restrictions related to training AI models, rights reserved and requirements for prior authorisation to uses not expressly allowed.

As mentioned before, Brazil does not have a guild-based residuals system adopted across the film and television industry. As a consequence, residual payments are usually not a standard feature of Brazilian audiovisual productions.

Nevertheless, discussions and negotiations around performance-based compensation, profit participation and other forms of contingent remuneration, especially for high-profile talent, are growing, mostly related to the streaming services and the influence of international market standards. It is important to highlight that, to date, these deals remain negotiated on a case-by-case basis and are not driven by any collective bargaining agreements or residual frameworks.

It is important to mention that Brazil does not have a legal framework for revenue-sharing, and most of the deals are structured as buyouts. In line with this fact, one of the main challenges is that in digital content, especially in the streaming platforms structure, the economic value of content is frequently verified in an indirect manner, taking into consideration more subjective standards such as platform growth, audience engagement, advertising ecosystems and broader content-exploitation strategies, making it more difficult to establish objective benchmarks for revenue-sharing models.

As a result, particularly in streaming productions, creator-led content and emerging digital formats, the deals are often structured to focus on the allocation of intellectual property rights, subsequent content exploitation and future opportunities in which creators, producers and talent may participate.

In Brazil, the industry practice and legal framework do not allow in-season stacking in the absence of an express contractual provision in the licence agreement. Considering the high risks involved, as a general rule, the option to make episodes available on related streaming services will directly depend on the scope of the rights granted under the existing licence agreement. In the event that the agreement is silent, the parties involved will seek a new arrangement or contractual amendment and will not rely on implied rights.

In Brazil, labour unions and guilds do not currently have a significant direct impact on the cost of distribution for streaming services. Unlike jurisdictions such as the United States, which already have a well-established guild system and residual payment structures, Brazilian unions mostly focus on labour conditions, professional representation and compliance with local employment law. While these legal obligations may affect production costs, they have not, up until now, resulted in material distribution-related costs comparable to the residuals and guild payments commonly seen in the United States and other jurisdictions.

In entertainment-sector M&A, the central asset is rarely the physical operation or even the cash flow. It is the library: a portfolio of copyrights whose value depends entirely on the integrity of the rights tied to each work. Because this is an intangible, contractual asset, the legal analysis must run through what is actually being sold, and which obligations come with the asset.

In Brazil, a further asset that may feature in the negotiation is the producer's score with ANCINE. The agency ranks production companies into score bands tied to the number of works they have produced and registered with it, and, depending on the band a company sits in, it can reach a larger volume of incentivised funding.

Brazilian law adds a further layer of its own, made up of constitutional and sector-specific rules on nationality and media control, as set out as follows.

Chain of Title and the Legal Quality of the Assets

A film or series brings together several underlying rights, such as any pre-existing literary work, artistic performances, original score and synchronised music. Due diligence is needed to confirm that each asset embedded in the work was validly licensed to the producer and that the seller has standing to transfer them.

Encumbrances and Obligations to Third Parties

It is important to check for co-ownership with third parties, continuing back-end revenue obligations owed to third parties, and priority recoupment positions held by investors or even tied to public funding mechanisms, such as the FSA.

The Brazilian Regulatory Layer

Ownership of journalistic and broadcasting companies (ie, radio and TV holding public broadcasting concessions) is reserved to Brazilians by birth, Brazilians naturalised for more than ten years, and legal entities organised under Brazilian law and headquartered in the country, and at least 70% of the total and voting capital must belong to Brazilians. There is also a nationality lock on editorial responsibility, since management of the business and responsibility for editorial content and programming are reserved to Brazilians.

Audiovisual Production Companies

For production companies, the essential question may be preserving the status of the Brazilian independent producer. That status requires Brazilian control and, above all, independence from programmers, packagers, distributors and broadcasters, along with majority ownership of the economic rights in the works. It is what makes the catalogue eligible to count toward Brazilian content quotas and to reach the incentives reserved for independents.

Bringing distribution (cable and pay TV operators) and content (studios, producers and programmers) together under a single economic group concentrates, in one structure, links that the audiovisual chain has historically kept apart. The central competition concern is vertical integration: a party that controls both the distribution infrastructure and the content has the incentive and the means to foreclose the market, whether by denying rival operators access to channels and catalogues or by refusing competing programmers access to its distribution platform.

In Brazil, the applicable sectoral legislation forces these structures apart.

The Structural Regime of the Pay TV Law

Law 12,485/2011 (the Pay TV Law) built a structural separation between the telecommunications layer and the content layer. Under its Article 5, Pay TV producers and Pay TV channel programmers may not hold more than 50% of the total and voting capital of collective-interest telecommunications providers, and telecommunications providers, in turn, are limited to 30% of the total and voting capital of producers and programmers. Article 6 of the same law reinforces the lock by barring telecommunications providers from acquiring event rights or signing talent for the purpose of creating exclusivity or blocking use by third parties.

For ease of understanding, the carriage of linear channels over private infrastructure (such as cable and DTH) qualifies as a telecommunications service under the Pay TV Law.

An Additional Check Through the Federal Competition Authority (CADE)

A transaction joining distribution and production will face two parallel reviews in Brazil:

• merger control before CADE (Law 12,529/2011), focused on market power, foreclosure and remedies; and
• a compatibility check against Articles 5 and 6 of the Pay TV Law.

Streaming and the Regulatory Asymmetry

The structural regime of the Pay TV Law was designed for linear pay television, so Video-on-Demand (VoD) platforms in Brazil remain, for now, outside the cross-ownership restrictions, which ends up creating asymmetries.

In entertainment-sector M&A, talent agreements concentrate contingent liabilities that rarely show up on the balance sheet but that travel with the asset.

Generic clauses will seldom be enough to make this liability visible. They have to be backed by representations and warranties, which take on real weight in bringing the liabilities to the surface, and by the seller's liability for contingencies whose definitions are broad enough to capture this kind of exposure, above all where it has gone undisclosed. And good old due diligence, with a structured review of the chain of rights behind each audiovisual work, must never be neglected.

Talent Agreements and Tailored Representations

In Brazil, the author's moral rights and the neighbouring rights are inalienable, which limits the reach of any assignment and, as a result, of the representation itself. On top of that, as previously noted, back-end revenues are not easily identifiable in financial statements, as they depend on a structured review of every contract that surrounds a given artistic engagement.

In Brazil, engaging artistic talent also carries a potential labour and social-security risk that cannot be ignored. Disputes may arise over the form of the engagement and end up reshaping the contractual relationship. A talent may have been engaged through a company and still obtain recognition of an employment relationship as an individual, or the company may have undergone an inspection by the Labour Public Prosecutor's Office requiring the payment of social-security charges. Since the buyer in Brazil can inherit the seller's labour liabilities, exposures of this kind do not stay behind with the previous owner.

Reviewing talent agreements in due diligence is equally essential to establish the scope of the authorisations for the use of image, voice and performance, since any limitations may restrict the exploitation of the work in certain media.

The Representations Typically Negotiated

Given these risks, it would be sensible to require representations and warranties such as:

• ownership and validity of the chain of rights derived from each talent;
• performance and absence of any breach of the agreements;
• completeness of disclosure, with a representation that there are no undisclosed amendments, side letters or oral arrangements;
• labour and social-security compliance in the engagement of talent;
• absence of litigation or concrete threats;
• image release; and
• absence of exclusivities or restrictions on the transfer of the rights.

As already pointed out in the previous sections, talent agreements concentrate contingent liabilities that do not appear on the balance sheet, and the recommended approach starts with a structured due diligence before any price negotiation. In practice, that means walking through the chain of title of each work, mapping the back-end compensation buried in the contracts, examining the form of engagement in light of labour and social-security risk, and gauging the scope of the authorisations for the use of image, voice and artistic performance. The findings of this assessment are then carried into the purchase agreement through tailored representations and warranties, like the ones previously listed, together with specific indemnities for the risks already identified and financial safeguards such as a holdback of part of the price (escrow).

When it comes to legacy intellectual property rights, meaning the catalogue, the same care applies, with a few added complications. Older contracts often carry gaps in the chain of title, music and synchronisation licences may have expired, and newer forms of exploitation, such as streaming, may not be properly covered by the original contracts. For that reason, the catalogue has to be reviewed title by title, contract by contract, where necessary by breaking the audiovisual work down element by element to identify any third-party rights involved in the production, alongside a check of the work's records at ANCINE to confirm any co-ownership.

The sensitive point is that the accounting tends to stay in the hands of the party doing the paying. That is where the transparency problem arises: revenues dissolve into deductions, distribution fees, marketing costs and overhead until the "net profit" simply never materialises. Contracts can be built to handle this on two fronts:

• reporting, through periodic statements, precise definitions of what counts as gross revenue, and a closed list of substantiated deductions; and
• an audit clause that secures the right to examine the books and records, with its procedures and costs set out in advance.

That right to audit should be paired with a matching duty to retain documentation, since the books and records must be kept for at least as long as the tax statute of limitations runs on the taxes related to the work's revenues, which in Brazil is, as a rule, five years. Keeping the documents throughout that five-year limitation period is what guarantees the supporting records still exist, if and when an audit is exercised.

In Brazil, there is no specific statute governing non-compete clauses, so their validity is built from contract law, from the constitutional limits that apply when the restriction falls on individuals, and from jurisprudential trends, as discussed as follows.

Natural Person

Applied to an executive or to talent, the clause restricts free enterprise and the free exercise of any work, trade or profession, all of which are rights guaranteed by the Brazilian Federal Constitution, which is why it is admitted only on an exceptional basis and where reasonable. Labour and civil case law has settled a set of cumulative requirements: a clear and narrow definition of the material scope, tied to the person's actual area of expertise and not overly broad, a reasonable time limit, and a defined geographic reach. The decisive requirement, however, is financial consideration. The professional must be paid for the period in which they are barred from working in their field, under penalty of nullity. With artistic talent, the scrutiny is stricter still, because the restriction touches the free exercise of a profession that is personal and expressive in nature, hence the practical recommendation of a mechanism showing that the person was or will be compensated for the time spent away from services tied to their expertise.

Companies

When the non-compete runs between companies, what is at stake is free competition, so the analysis shifts to competition law. The clause tends to be accepted more readily, above all when it is ancillary to the sale of a business, a situation in which the Brazilian Civil Code already bars the seller from competing with the buyer for five years. Even so, the requirement of proportionate scope, term and geographic reach remains, and an overly broad restriction may be struck down or draw the scrutiny of Brazil's competition authority (CADE).

In the audiovisual sector, there is a further point to watch, since a non-compete that ties a producer too closely to a programmer, packager, distributor or broadcaster may, depending on how it is drafted, compromise its status as a Brazilian independent producer, a status that presupposes precisely independence from those agents. The consequence is the loss of that standing, which affects both the catalogue's eligibility to count toward content quotas and access to the incentives reserved for independent producers.

Accommodating AI in the contracts and providing upfront for the creation of non-fungible tokens (NFTs), has gone from cutting-edge clause to market standard. In writers' agreements, for instance, it is now common to restrict the use of AI in creating the text, with an express ban on content generated by generative systems. In talent deals, a genuine tug-of-war has set in; on one side, the hiring party seeks authorisation to use AI to enhance voice and performance, including the creation of digital replicas; on the other, the talent tries to restrict any processing of their image, voice and performance by AI.

Virtual reality and augmented reality have followed a similar path and have already become commonplace in Brazilian rights-assignment clauses. The reason is legal before it is technological: Brazilian copyright law requires each form of use to be set out expressly and in writing, construes dealings over copyright restrictively, and provides that an assignment reaches only the forms of use that existed at the date of the contract. In practice, anything that has not been spelled out, unless it amounts to a technological evolution of what is already covered, simply does not transfer, so virtual reality (VR), augmented reality (AR) and new forms of exploitation have to appear specifically in the instrument, failing which the rights holder keeps them. In Brazil, then, whatever has not been expressly provided for stays with the author.

Business Structure

Setting up an audiovisual production company in Brazil calls for careful analysis of the corporate form, the tax regime and the design of the financial flows. The choice between a limited liability company (the Brazilian Limitada – LTDA) and a stock corporation (the Brazilian Sociedade Anônima – S/A), combined with the tax classification, has a direct impact on costs, so the most tax-efficient model should always be the goal. Depending on the investment flow and how the distributable results are carved out, other vehicles without legal personality, such as consortium (consórcio) and silent partnerships (sociedades em conta de participação – SCP), may be considered.

Tax Aspects

Still under the regime that precedes full implementation of the tax reform, this means comparing the Simples Nacional, Lucro Presumido and Lucro Real regimes in light of the company's size, margin and cost structure. Beyond the regime itself, it is also necessary to map the paths along which the money will travel, from raising incentives to paying the partners and handling any remittances abroad.

Regulatory Aspects

Equally important is to establish who the partners are and to check whether any regulatory restriction tied to them might rule out qualification as a Brazilian independent producer, where that status matters to the business. This is the case, for instance, where a programmer, distributor or broadcaster holds an interest, or where foreign capital exceeds the applicable limits, situations that may compromise the independence or the nationality required to reach quotas and incentives.

Unions

On the labour and union side, Brazil does not run the guild-membership system found in other markets. Companies are instead subject to collective agreements and to unions. It is essential to identify the applicable collective agreements and, above all, the rules of the employers' unions on affiliation and membership, including the wage floors for employees. The competent employers' union varies according to the company's predominant activity and its geographic location.

Insurance

General corporate insurance is not widespread in Brazil; what prevails is specific insurance tied to each audiovisual production, such as policies covering filming risks and completion of the work.

In Brazil, the starting point is regulation by absence. The over-the-top streaming models, whether Subscription Video on Demand (SVOD), Ad-Supported Video on Demand (AVOD) or Free Ad-supported Streaming TV (FAST), fall outside the Pay TV Law, which governs content distributed over proprietary telecommunications infrastructure and imposes content quotas, CONDECINE and cross-ownership restrictions. As services delivered over the internet, in the capacity of value-added services, these models operate today outside that regime, with no quotas, no CONDECINE on their revenues and no sector-specific ownership limits.

What sets FAST apart is being linear in form but streaming in nature. The channel is programmed and ad-supported, like a broadcaster, yet runs over the internet, so it escapes both broadcasting and the Pay TV Law, sitting in a grey area. On the business side, FAST monetises through advertising on linear channels, SVOD lives on subscriptions, and AVOD pairs an on-demand catalogue with advertising revenue.

This asymmetry may change with the so-called VOD Law, under debate in the Brazilian legislature, which proposes to bring over-the-top streaming into a framework of its own, with CONDECINE on revenues and obligations to invest in national content. It will be worth watching to see whether and how the legal definition reaches FAST, given its linear nature.

In Brazil, the standard rule on the platforms is the buyout, ie, a specific, fixed payment covering the services rendered and the rights assigned, with no later participation in results.

There is always a tug-of-war between the hiring parties and the agents, who try to import the logic of other markets, such as broadcasting, in the form of bonuses tied to audience figures (here, views and plays), bonuses on "first play" rates and remuneration for the performer's neighbouring rights. The choice will come down to the parties' bargaining power.

Interactive formats such as Netflix's Bandersnatch replace linear storytelling with viewer choices that open multiple branches and endings. This calls for recording far more material than the screen time of each journey reveals, and it shifts value from running time to engagement, which makes compensating talent in this format more challenging. The natural consequence is more shooting days required of the talent, and consequently a more substantial fee for the services themselves. Either way, a balanced model must separate what can be assigned from what cannot. Since Brazil does not allow a full assignment of the performer's neighbouring rights, the buyout should cover the services and the patrimonial portion that is assignable, while the unavailable share of the neighbouring rights is addressed through a dedicated, ongoing remuneration component. That component can be built on the metrics specific to interactive platforms, or on a time basis.