4 May

Rights Management in 5 Years, Part 1

The Impact of Microcontributors and Microcontent on Rights and Royalties Management

Today, many organizations are heavily focused on the notion of creating and monetizing microcontent – breaking up their intellectual property into new, consumable content that can be further leveraged, such as selling a chapter of a book. However, on the horizon we see a new twist on this – the role of social in content monetization.

The power of the social content contributor has caused corporations to sit up and take notice. How can they attract and compensate contributors with large followings to post on their behalf, bringing exposure to their brands? Naturally the answer is to pay them, but this will increase the number of royalty transactions corporations must process exponentially, not to mention raise the question of how to control brand representation.

We are just scratching the surface of tapping into amateur markets for content, and it’s a win-win proposition. Corporations benefit from having more content and creativity; low- or no-cost acquisition; lower royalties compared to many of the talent contracts they have in place; and a faster time to market. Artists benefit from exposure and the opportunity to monetize their work product.

With the amount of content being generated in the digital marketplace, typical corporate payment cycles for microcontent aren’t practical—or desirable for the contributor. As with everything else in the digital age, payment transactions will be expected in real time, leaving corporations to pay out what could be hundreds of thousands of microtransactions. For a single artist, terms may dictate an initial payment for the post itself, plus payments per click and bonuses for click-throughs to sponsors—all separate, small monetary transactions that may carry different monetary values.

While soliciting content from previously unpaid posters may seem relatively easy, with payment comes the notion of control. Unpaid content contributors pretty much post what they want, but once compensation comes into play, paying corporations will want to control both content and quality. A retailer may engage a brand fanatic, for example, to post photos of themselves using or wearing their brand—but what if the photo is of poor quality or in poor taste? What if it includes an item from a competitor? This will involve a review process and add rules that must be satisfied prior to payouts.

For most corporations, this paradigm shift in royalty terms and payments is not something their current financial systems, or internal processes are designed to accommodate. Most traditional royalty payment terms include tiered rates based on volume of engagement, whether that is views, clicks, readership or sales. With real-time microtransactions, it is will be virtually impossible to track and calculate tiered payment percentages on real-time usage without having to adjust payments that have already been made. This will likely force corporations to do away with traditional tiering terms to accommodate a real-time payment structure on a daily basis.

As yet, royalty payment structure and content quality assurance processes have not yet been defined, but the rise of the microcontributor producing more and more microcontent makes micropayments the likely trajectory.

FADEL ARC connects seamlessly to leading DAMs, MAMs, CMSs, and 3rd-party rights management systems, allowing users to quickly verify even the most detailed and complex usage rights, clear assets for use real-time, and determine payment obligations for usage. This translates to faster time-to-market with less compliance risk. ARC also tracks IP clearance and usage data, providing business intelligence around IP use and monetization.

FADEL is a sponsor of DAM NY, and readers can use discount code FADEL100 to receive $100 off their registration. Tarek Fadel, Founder and CEO of FADEL, will be a panelist for the discussion: Content Monetization: Rights Management for Content Companies, Friday, May 6, 2:20-3:50pm. Tarek joins Atul Pawar, VP of Business Systems, Macmillan Learning and Jeff Schneider, Business and Legal Affairs, National Geographic Partners on the panel.

To see ARC in action or schedule a one-on-one demo, visit booth 24 at DAM NY or go to www.fadel.com/arc.


Categories associated with this post: Rights Management, Royalty Management
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Tarek Fadel

As CEO, Tarek Fadel is responsible for the overall management and performance of FADEL, driving its long term strategic plan as well as overseeing the day-to-day management of the corporation. Prior to founding FADEL in 2003, Tarek was a Director of Consulting at Oracle Corporation with over 20 years of experience building, selling and implementing enterprise software applications. He managed a consulting practice for Oracle responsible for the success of several large client implementations, and held the position of Director of Product Management releasing several Oracle CRM products. Tarek also worked at Cambridge Technology Group and played a major role in deploying its enterprise application server products to the market. Tarek holds a technology patent for his work on Method and Apparatus for e-Commerce Integration Architecture and Process. He has a bachelor’s degree in Computer and Information Science from the City University of New York and an MBA from Columbia University.

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