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May 5, 2011 Making Information Pay
MORE EFFICIENT RIGHTS MANAGEMENT
THE KEY TO FUTURE PROFITS
Mike ShatzkinFounder & CEO, Idea Logical Company
Heather ReidDirector of Data Systems & Services, Copyright Clearance Center
David MarlinPresident and Co-Founder, MetaComet Systems
May 5, 2011Making Information Pay
2
The change that is accelerating
Whole books get harder to sell in any format: competition and atrophying channels
Fragment permission and licensing opportunities grow, due to apps, ebooks, and web sites
More transactions, fewer dollars per Rights research eating up too much
of the revenue
May 5, 2011Making Information Pay
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Robust rights databases are needed!
Or, so it seemed, but we wanted to confirm
CCC funded research for a team to speak to publishers and service providers
We learned this is a pain point that is universally appreciated
We learned that this is a vast problem that stymies just about every company
We think we figured out where to begin to solve it
May 5, 2011 Making Information Pay
THE CURRENT STATE OF RIGHTS MANAGEMENT SYSTEMS
Initial Findings from BISG & CCC’s Joint Survey of Publishers and Vendors
Heather Reid, DirectorData Systems & ServicesCopyright Clearance Center
May 5, 2011Making Information Pay
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Survey Process
Goal was to get a read on the rights management landscape among U.S. publishers
We interviewed both publishers and vendors of rights management systems Nine publishers Six vendors
May 5, 2011Making Information Pay
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Summary Findings
Only one publisher interviewed has addressed rights management comprehensively
Some have at least some data stored digitally in a persistent data structure
Many publishers only store their rights data as PDFs of legal contracts
“50% of all publishers – and even the big ones – don’t have a digitized contract file. They’ve got
contracts filed in paper files somewhere.“ -Vendor
May 5, 2011Making Information Pay
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Summary Findings, part 2
Current systems are ineffective and don’t adequately meet needs
Mix of off-the-shelf and home grown systems Not well integrated Not managed/funded as strategic
initiative Rights = a choke point
Inbound rights not accessible in the way they should
Outbound rights take too long to process
In the old world, … you create a book and you push it in physical form and the contracts departments was … a back office operation. We’re dealing in a content world now…and as a result…rights [management]…is critical.”
- Publisher
May 5, 2011Making Information Pay
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Every Transaction is a Rights Transaction
Digital Publishing is a true paradigm shift Creating both opportunities and
threats Global marketplace for digital
products Entails strategic management and
exploitation of rights Micro-transactions will grow
Knowing rights at a granular level is key
Rigorous rights management NOT optional Table stakes for truly exploiting new
markets
“This is about leveraging your intellectual property in every sales channel and every market around the globe.”
- Publisher
May 5, 2011Making Information Pay
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Why Rights Are Important Now
“Licensing is a field that will only continue to grow in this new world.”
“Rights are the foundation for everything now.” “We saw a 100% increase in licensing revenue when we
started responding faster to rights requests.” “You have licensing/permissions working in the 60’s and
digital media being created in 2011 – it creates bottlenecks.” “Traditional models and channels disappearing at a rapid
rate.” “You’re losing revenue for sure if you don’t know what your
rights are.”
“It’s not can we afford to, but can we afford not to?`”
May 5, 2011Making Information Pay
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How To Move Forward
Industry education Best practices Discussion of issues and complexities
Develop standardization of terms and definitions For “rights in” and “rights out” Common taxonomy
Alignment within and among publishers Reframe rights management as strategic to
business Rights vended are rights sought Publishers seeking bundles of rights are also
vending those same rights Systems and process integration
Reduce manual data entry Reinforce proper workflow and communication Cross-company buy-in
“It’s about [knowing] what you need to own in order to transform your business and be a player in the new marketplace. Otherwise, you’re kind of old news. “
- Publisher
May 5, 2011Making Information Pay
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Implementation Strategies
Start by databasing current contracts; then address the backlist
Systems must be flexible and extensible – adapting as market demands evolve
Systems integration is key – rights management system must talk to other key systems
May 5, 2011 Making Information Pay
CONTENT IN THE WILD
“not the kind of stuff that you
can actually let out into the
world”
May 5, 2011Making Information Pay
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The Wild
“I think it’s the scariest thing that I’ve heard in the past few years…because the value that we still have as publishers … as content curators and content creators … if we don’t do a better job of this, we’re going to lose that advantage … very quickly.”
May 5, 2011Making Information Pay
Brand
Legal & Compliance
Profit
Capital Investment
Stakeholder Value
May 5, 2011Making Information Pay
Legal & Complianc
eBrand
Profit
Capital Investment
Stakeholder Value
Single most important value that the rights system brought to one organization: “Risk Management”
“the Company’s independent registered accounting firm advised the Company that the control deficiency described below constitutes a material weakness in its internal controls.” – an actual Annual Report
“…exposure and liability associated with using content we haven’t acquired.”
“The bigger issue may be that of potential liability to the business”
May 5, 2011Making Information Pay
“Publisher Settles Class Action Lawsuit”
Importance of Author Relationships: “Any author who ever hears me responding to this is going to go, it better be a five. So it’s a five.”
Brand
Legal & Compliance
Profit
Capital Investment
Stakeholder Value
May 5, 2011Making Information Pay
“we probably will still be dealing with decisions made now in 15 years”
“a database system that creates extra steps instead of removes them is never going to be embraced”
Capital Investment
Brand
Legal & Compliance
Profit
Stakeholder Value
May 5, 2011Making Information Pay
“Unless you can organize your content in a way that makes the purchase very easy, it’s not low-hanging fruit. And that’s kind of what I’m stumbling over right now is getting the content organized.”
“we’re all sitting on the same problem . . . we’ve never really placed strenuous demands on our content in this way.”
“ ‘it’s just easier for me to go out and source my own content than to work with you guys,’ scariest thing that I’ve heard in the past few years”
“By the time they got back to the requester, they had gotten tired of waiting and had gone in a different direction.”
Profit
Brand
Legal & Compliance
Capital Investment
Stakeholder Value
May 5, 2011Making Information Pay
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Risk Mitigation
Taxonomy
Data Model
Tools
“having really a robust taxonomy in place that allows us to group content, to group it, slice it and dice, it”
“How good your data management is allows you the greatest leverage and facility to actually do with your intellectual property what you thought you were acquiring it for!”
May 5, 2011Making Information Pay
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A next phase project: to make real progress
The first goal: all publishers properly databasing new contracts from inception
The next objective: figuring out what it takes to get any publisher to that point
Required: a taxonomy that works, contracts and permissions mapped to the taxonomy, a workflow that captures new contract terms in a database reflecting the taxonomy
May 5, 2011Making Information Pay
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Use and test the taxonomy
Select a core group of (about) 15 publishers: all sizes, all types
Pull all current “standard” contracts; map them to BISG rights committee taxonomy
Capture 3 months of permission and relicensing requests: map them to taxonomy
Analyze taxonomy for gaps; refine taxonomy and, if necessary, the contracts
May 5, 2011Making Information Pay
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Uncover the workflow challenges
For each publisher, track the workflow that leads to the contract (editor’s instructions?)
Look for opportunities to capture contract info in database simultaneously with issuance of contract
Redesign workflow to create both at once
Create checkpoints to make sure contract and database are in synch
May 5, 2011Making Information Pay
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Spread the best practices
Deliver a template for the database with checklist of contract “trouble spots”
Document workflow alternatives that deliver both contract and database
Develop a program to cost-efficiently help all publishers get to best practice with new contracts
Finally: we can then think about the backlist!