With the outbreak of coronavirus (COVID-19) and its transformative impact around the world, the imperative for publishers and content providers to digitize content is taking on increasing importance. As stated by The International Publishers Association, “This crisis underlines why publishing is so important. Publishers are the source of the educational resources our teachers and pupils rely on in the classroom and they are working hard to find new ways to bring them to the home. Books are one of the forms of entertainment that people are turning to while in isolation to escape and understand what is happening. Published academic research is what will help our governments and researchers find ways to manage and treat the crisis.”
Students, readers and researchers expect and need access to content in multiple formats and delivery mechanisms. Publishers have quickly responded to the need. Through unprecedented efforts across the world, content is now being made available more quickly and in new ways to meet the new demand. Pearson Education, for example, is working towards becoming 100% digital over the next couple of years as they introduce ways for ‘hybrid learning’.
However, this drives new challenges for royalty operations – to adapt to new digital compensation models, improve transparency to authors and rights holders, and to work entirely ‘in the cloud’. In the coming cycles, the rights holders of this content will expect to continue to be compensated fairly, especially given that traditional sources of royalties are changing and in many instances impacting payment amounts. Many publishers and content businesses are not ready for this new world.
Why Traditional Royalty Management Doesn’t Meet Today’s Needs
Royalty management systems have been doing a good job at processing royalties for traditional publishers for decades. In fact, most royalty systems have designs that date back 20 – 30 years. However the publishing industry has been through a long evolution of transformation, and the old ways are not holding up.
- Today, publishers and other content-rich businesses make their products available via newer business models, such as subscriptions, rentals, ad-driven, serialization, and custom assembly. Systems designed before these business models are lacking now-critical capabilities.
- With these legacy solutions, a lot of work is required to manage proper compensation for the new business models – work that is error-prone, time consuming and puts the publishers at risk of non-compliance. Teams are needing to extract data, perform offline calculations in Excel, and then manually assemble calculations and statements.
- Additionally, most royalty systems are inadequate at tracking the rights that have been acquired and sold in one place, making it difficult to know where to pursue opportunities in other markets and regions.
Royalty accounting software built with these use cases in mind not only prevent these problems from arising but offer additional value to businesses.
It’s Time to Take a “Rights First” Approach to Royalty Management
At its core, a rights and royalty platform should be embedded with the ability to effectively manage rights. In other words, the ecosystem should be built at its core to understand what rights a publisher has acquired from an author and what obligations the publisher has to that author. Often author contracts can be quite complex.
Having a ‘rights first’ platform means that, regardless of the content a business is producing and how that content is released into the marketplace, the platform must be able to manage a total view of rights along with the calculation and accounting that is directly connected to the products created through those rights.
Benefits of Improved Rights & Royalty Operations
Effective royalty management offers businesses:
- Company growth through improved speed to market on new types of content and through better visibility across channels and markets.
- Improved customer experience by making more content available and by compensating authors and rights holders properly for licensing of that content.
- Operational excellence by minimizing errors, manual workarounds and non-compliance incidents that cost money and put company reputation at risk.
Best Practices for Rights & Royalties
Effective management of rights and royalties is the foundation for content-rich businesses. Connecting those rights to the author’s compensation is essential for a rights and royalty platform. Attention to industry best practices are critical when planning a transformation of royalty operations, including:
- A Global Rights Model that strongly connects rights with the products created through those rights
- Identifying Rights Goals and Strategies at the contract level to create the framework for subsequent rights transactions
- Integrating Rights with Content at the point in time that content is authored and/or assembled
- Implementing Rights Standards and mapping it to an industry-standard taxonomy to enable clear communications
- Using a Cloud Platform to optimize use from any location and to eliminate dependencies on physical infrastructure
- Providing complete transparency via an ‘Author Portal’ to speed and streamline communications with rights holders and increase transparency
- Employing strong Governance and Stewardship at all stages, to ensure calculations are accurate, and supportable via robust reporting and analysis.
- Avoiding ‘Islands of Automation’ and duplication of information and processes by connecting your Rights and Royalty Ecosystem to your ERP and financial systems.
Unified Rights & Royalty Platform
A unified rights and royalty platform is required for transforming rights and royalty operations. Content businesses and publishers that rely on outdated legacy systems and processes should review all their options including the use of a new platform to adapt to current and future challenges. By adopting a “rights first” approach, businesses will ensure their ability to grow and adapt their business while seamlessly managing their intellectual property rights and related obligations.