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Bruce BensonIndustry PrincipalMarch 2005
Leveraging Intellectual Property Management for Growth
March 2005
SAP And TheEntertainment & Media Industry
Intellectual Property Management SolutionSolutions for a Changing Industry - VOD
Industry Solutions OverviewAbout SAP
Intellectual Property Management SolutionSolutions for a Changing Industry - VOD
Industry Solutions OverviewAbout SAP
SAP - 30 Years in the Business of Business
12 Million Users. 60,100 Installations. 1,500 Partners. 23 Industry Solutions. 28,900 employees. Located in 120 countries.
SAP is the recognized leader in providing collaborative businesssolutions for all types of industries and for every major market
SAP is the world's largest business software company and the world's third-largest independent software supplier overall.
SAP was founded in 1972.
Market Leadership: ERP IISource: Gartner Research, 2002
SAP Spends More on R&D Than All Others
R&D Expenditures (€ Millions)
“Importantly, the stronger margin does not appear to becoming at the expense of future growth – R&D headcount is up Q/Q and Y/Y and S&M headcount is down marginally quarter-on-quarter and up year-on-year – both indicating that capacity and product investment are not being curtailed.”
--SolomonSmithBarney
Intellectual Property Management SolutionSolutions for a Changing Industry - VOD
Industry Solutions OverviewAbout SAP
SAP Media Customer Base Growth 1999-2003
Steadily Growning Number of Media Customers Worldwide
240
249
261
169
1999 2000 2001 2002 2003
290
1,382
290
Industry Challenges
Changing Technologies Threaten Revenue Streams
• PVRs allow ad skipping• Growth of cable channels fragments advertising
audience• Web Piracy undermines distribution revenues
Changing Technologies Threaten Revenue Streams
• PVRs allow ad skipping• Growth of cable channels fragments advertising
audience• Web Piracy undermines distribution revenues
Expanding Methods of Distribution• DVD sales drive revenue growth• Big-box retailers increase their leverage, straining legacy
distribution systems• Video-on-demand shifts power to cable operators• Telephone companies move to become content
providers• Internet allows studios to by-pass the cable companies
Expanding Methods of Distribution• DVD sales drive revenue growth• Big-box retailers increase their leverage, straining legacy
distribution systems• Video-on-demand shifts power to cable operators• Telephone companies move to become content
providers• Internet allows studios to by-pass the cable companies
Entertainment Industry Experiencing Dramatic
Changes Primarily Due to Technology and Changing
Customer Behavior
Entertainment Industry Experiencing Dramatic
Changes Primarily Due to Technology and Changing
Customer Behavior
Regulations• Sarbanes-Oxley
• Changing FCC Regulations
• Changes in copyright laws and protections
Changing Customer Behavior
• As broadband penetration increases, more consumers go to the web first --Advertisers shift ad spending accordingly
• Decrease in mass audiences drives up ad rates, but reduces ad efficiency
SAP: How We View The Industry
EntertainmentiFilmiTelevisioniRadioiHome
EntertainmentiMusiciDigital Content
Print PublishingiBooksiNewspapersiMagazines, JournalsiDigital Content
Planning & Content Acquisition
Product Development/Production
Music studios, publishers, producers
Film studios, production, distribution
Newspaper publishers
Broadcast TV, Cable NetworksCable operators, TV
stations
Radio networks Radio stations
Magazine publishers
Ret
ail, e
-com
mer
ce
Theaters
Most large media conglomerates participate across the value chain and in several media types
Sales & Distribution
Suppliers/ services
Printers, advertising agencies, production services, film distribution, computer animation/ special effects, internet media etc.
Cre
ativ
e ta
lent
Rental
Magazine distributors
Book publishers
Home Entertainment
Digital Content/Information Providers
Production companies
Business Intelligence Warehouse & ReportingBusiness Intelligence Warehouse & Reporting
By-Title LedgerBy-Title Ledger
SAP Solution SetSAP Solution SetSAP Solution SetFor DiscoveryFor DiscoveryFor Discovery
GL/AP/AR/HRGL/AP/AR/HR Strategic Enter. ManagementStrategic Enter. Management
Cable/TV Network – Major Processes
•Broadcasting•Broadcast or Distribute through affiliates•Traffic ads•Maintain “as-ran”logs DVD Distribution
•VOD Distribution•Internet Dist.
• Develop relationship with advertisers
• Determine quotas for advertising staff
• Manage “up-front”buying of ad space
• Maximize ad inventory sales
•Bill advertisers•Bill cable operators or MSOs
•Calculate royalty payments to studios
•Bill Retailers
• Develop/acquire ideas for new series
Rights Mngt. (IPM)
Rights Mngt. (IPM)
• Set production schedules
• Negotiate contracts• budget/ & produce
series, episodes & seasons
cProjects/cFolders
cProjects/cFolders
AdvertisingSales
AdvertisingSales
AdvertisingSales
AdvertisingSales
AdvertisingSales/Billing
(Charter ClientNeeded in US)
AdvertisingSales/Billing
(Charter ClientNeeded in US)
Rights Mngt. (IPM)
Rights Mngt. (IPM)
Bro
adca
stin
g
Sales OrderMngt
Sales OrderMngtR
etai
l D
istr
ib.
VOD
/ W
eb Rights Mngt. (IPM)
Rights Mngt. (IPM)
B2C Billing(PartnersNeeded)
B2C Billing(PartnersNeeded)
Sales OrderMngt
Sales OrderMngt
Billing &Settle-ments
Distribu-tion
Manage Advertising
Acquire Content
Develop Product
RightsSettle-Ments
•Calculate settlements based on runs
•Units Shipped, etc.
•Generate AR•Generate AP
Intellectual Property Management SolutionSolutions for a Changing Industry - VOD
Industry Solutions OverviewAbout SAP
What is Intellectual Property Management (IPM)?
Intellectual Properties take on many formats across industry segments…
… and involve many different processes
… in generating value from media products across the media enterprise
Film
Screenplay
Song
Novel
TV Series, Season, Episode
Athletes
Events
Performance
Photograph
Illustrations
Characters
Rights ManagementContract ManagementProduct Availability/ClearancesRoyalty Accounting
AdvancesGuaranteesTiers
Artist RoyaltyAuthor RoyaltyLicensing RoyaltyMechanical RoyaltyParticipationsRevenue ShareTitle/Property Management
Overview of Intellectual Property Management
Entertainment:TheatricalPay TVHome EntertainmentFree TVMerchandisingBroadcast distribution
Premium Publishing:Hardcover/softcover booksAudio booksE-LearningOnline contentMerchandising
High opportunity costs due to lengthy sales cycles
Increase visibility to “sellable” titles
Improve Profitability
Lack of timely “by title” profitability analysis including P&L, balance sheet and cash
Ineffective cash management procedures
Visibility to Titles through the entire value chain
ObservationsKey Issues
Traditional windows are being shortened, and new windows added as technology advances bring new vehicles for distribution
Need for greater integration and automated window management to marketing, sales, business affairs, legal affairs…
Manage windows to maximize revenue
Increased competition for new content
Ineffective green-light processes
Contract terms are more complex as rights are defined in more granular terms
Ineffective IP management workflow
Maximize acquisitions
Key Issues for Intellectual Property Management
Lack of comprehensive business intelligence
Difficult to analyze project profitability
Systems are inadequate to deal with increasingly complex royaltycontracts
Real-time visibility to rights availability is critical for reducing sales cycle and increasing profitability of license sales
Money is regularly left on the table due to inability to clear rights in a timely manner
Timely, accurate information for reporting and analysis
ObservationsKey Issues
Lack of modern, flexible infrastructure
Reduce systems and duplication
Disparate systems and platforms make analysis and collaboration difficult or prohibitively expensive
Business systems integration adds cost with minimal benefit to end product
Align IT and Business Strategy
Key Issues for Intellectual Property Management
1. IP Creation & ProductionAsset Ownership & Usage
SAP’s Fully Integrated, Closed-Loop IPM Process
3. IP & Rights ManagementDetailed Rights DefinitionIP AttributesRelationships between IPs
5. Rights/License SalesOpportunity AnalysisContract ManagementStatus Management
8. Royalty StatementFlexible outputMultiple Channels
6. Incoming RoyaltiesInvoicingCollective BillingPartial Payment – title allocation
2. IP AcquisitionContract ManagementStatus ManagementPartner Relationship Mgmt
4. IP & Rights AvailabilitiesReal-time AnalysisEvent PlanningSales Planning
7. Outgoing RoyaltiesRoyalty calculationsCollective royaltiesCross-collateralization
IPM Highlights: Product Hierarchies
Part
TV series
Season 1
Episde 1
Episde 2
Season 2
...
...
Operational usageRights availabilityanalysis
Royalties calculation
Package part
Package
Film 1
Film 2
...
Operational usageRights availabilityanalysis
Underlying component
The Film
Book
Script
Music
Performance
...
Operational usageRoyalties calculation
IPM Highlights: Define Rights Dimensions
Maintain rights owned, release dates and restrictions
Ability to view relationships between IPs
Capture rights information at most granular level
Title Management
Key Best Practices
3. IP & Rights Management
IPM Highlights: Rights Availability & Sales Execution
Single rights repository for enterprise view of rights
Exploitation analysis
Real-time rights availabilities analysis
Automatic generation of deal memo based on avails analysis
Automated license clearance based on rights availability
Key Best Practices
4. IP & Rights Availability
Hierarchicalselectioncriteria
Searchresults
“Standard” selection criteria
Addressing Your IT Uncertainty
SAP can help protect your IT investment –today and tomorrow
SAP’s Safe Passage Program:
Founded on maintenance, applications and migration support from the industry leader
Does the news about Oracle’s acquisition of PeopleSoft have you concerned about your IT investment’s future?
We believe that software companies don’t “own”their customers, rather we “serve” our customers. As such, you don’t buy or sell customers, you SERVE their interests.
Shai AgassiMember of the SAP AG Executive Board
SAP AG
SAP Safe Passage Program Details
MaintenanceMaintenance support for existing PeopleSoft or JDE implementation, via a newly acquired company, TomorrowNowProvided at current SAP rates
ApplicationsLicense mySAP now and receive a credit of up to 75% on your previous investment in PeopleSoft or JDERealize the immediate benefits of integrating your entire landscape on an open, scalable platformLeverage SAP NetWeaver* to drive innovation by composing and running new processes across your heterogeneous environment
Migration SupportExtend your IT infrastructure now with SAP NetWeaver*, the proven integration technology platform Migrate to mySAP at your own pace with support from SAP
* included with your mySAP license
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