The big wins for publishers who invest in better rights systems, and the lost opportunities for those who don't.
"Rights are valued by the commercial director at 5 - 6 times actual licensing revenue because it is pure profit."
- Interviewee at large professional publisher, Positioned for Growth - BISG Rights ROI research, 2020
Inefficiencies and lost opportunities
In a 2017 survey, 53.5% of respondents agreed that they were missing out on revenue opportunities around rights and licensing. It’s clear rights teams are aware that improving management of deals, contracts, and syncing up systems can create greater business opportunities.
But in the same survey, 59.8% worked for companies with no immediate plans to invest in meaningful solutions.
Are the solutions on offer out of reach for these businesses? Or is it a case of needing proof of a return on investment?
Why invest in rights management?
Though rights teams may be operating smoothly on the surface, unwieldy systems can be a major disadvantage:
Deals happen slowly. Having multiple spreadsheets and systems for keeping licensing and contract information separate for different parts of a business.
Data isn’t readily available. Failure to synchronise information on deals makes it hard to analyse what’s working and what’s not. Opportunities are missed, e.g. neglected geographic territories with huge translation rights markets or straightforward licensing opportunities that accumulate to millions of dollars in revenue.
Legal and financial risks. It’s a huge, time-consuming effort to maintain correct data when, for example, the system for storing contracts and the system for managing licenses are separate. Erroneous data can lead to contractual and financial mistakes and even legal issues.
Is a lack of proof holding publishers back from better rights systems?
Good rights management is recognised by publishers as vital to the bottom line, but rights teams operate in a unique way - usually lean, highly profitable teams. As one interviewee put it, "Rights is pure profit".
Decision makers might question the value of big investments in new systems, and the disruption of migrating from one system to another.
But addressing these objections is of crucial importance to the growth and vitality of publishing organisations. The highly-lucrative efforts of rights departments are limited and frustrated by inefficient systems that can’t provide clear data.
Evidence of ROI
A 2020 white paper by the BISG addressed whether returns on investment in rights management could be proven.
The evidence was clear - investing in rights management gets results:
an uplift in revenue
increased efficiency
The motivation to invest in better rights management should be simple: better rights management equals greater profit.
During a Publisher’s Weekly webinar discussion of the BISG report, Becky Hemperly, VP of Contracts, Rights and Royalties at Candlewick Press commented that rights are at the very heart of publishing, and a system that works for rights works for the whole business.
"To my mind, rights are the core of the business... A rights management system has to be robust enough to connect all elements of publishing."
Becky outlined the advantages for Candlewick specifically. As a children’s publisher of image-heavy properties, the combination of BiblioLIVE and BiblioDAM facilitates not only smooth licensing deals but integrates with their digital asset management. It means sharing assets securely is easy. Biblio enables adding limited permissions to specific files, and quick-creation of filesharing URLs that can be time-limited, for example.
Biblio affords Candlewick the clarity to make decisions on whether to renew rights - financial data is centralised, accessible to the team responsible for reporting, recommending and brokering renewals.
The nature of the system - synchronising data and files, reducing errors and duplication - has also made transitioning to remote working seamless. "Foreign rights teams, audio, all rights have been able to carry on while working remotely".
Compelling outcomes from better rights systems
The BISG report lays out results from a cross-section of companies who had made the move to invest in their rights systems, including a number of Virtusales clients.
Migrating rights management to a more sophisticated system like Biblio resulted in:
1. Data analysis to justify deals (or not) & finding new opportunities in the data.
“Smaller deals became justifiable or not based on seeing the history of deals.”
- Interviewee, midsize trade publisher
Results include:
Increased licensing revenue from 8% to 15% of total revenue over a period of 5 years for one midsize trade publisher - an increase in the low $millions. At least half of this increase could be attributed to data analytics
A midsize trade publisher was able to justify moving audiobook licensing in-house on the back of data provided by the rights management system, projecting a revenue increase of $1.0–1.7 million annually
At a large STM and professional publisher, data analysis led to a 25% or $2.75 million increase in revenue from translation deals
Another midsize trade publisher used data analytics to increase licensing revenue by 5%, an increase of approximately $37,500, by examining previous deals to help determine optimal pricing.
Another midsize trade publisher brought in 5–10 additional licensing deals per year, from new geographic territories not represented by agents, at an average of $1,000 each, for a total annual revenue gain of $5–10,000.
A large professional publisher increased revenue from licensing of images and other digital assets by $42,000.
2. Efficiency: Quicker contracts - leading to more deals. Less staff needed for the same number of deals.
“It used to take half an hour per contract; now it’s done in seconds.”
-Interviewee, large professional publisher
Results include:
As a result, one large professional publisher reported processing 10% more licensing deals, leading to about 350 more deals per year.
A large educational publisher licenses in at least 150,000 assets per year. The rights management system tracks these assets from manuscripts through to subrights deals and matches them to information in the accounting system. This saves 1.5 to 2 hours per deal (where some deals involve multiple assets), which is equivalent to 56–75 FTE or $4.2–5.6 million.
A large trade publisher uses a staff of 9 people with a rights management solution to perform permissions tasks that would require 40–50 people without the system, saving $2.5–3.3 million per year.
A large professional publisher increased revenue from licensing of images and other digital assets by $42,000.
A division of a large trade publisher saves 500–600 hours a year on subrights processing for frontlist titles and another 800–900 hours a year for backlist titles, for a total of 1300–1500 hours, which is about $50,000 per year.
Investing in rights is investing in the wider business
As Becky Hemperly of Candlewick puts it:
"You can’t manage rights in a vacuum - rights are not just subsidiary rights - the contract is the right to publish the book, that’s core. You’re nowhere without knowing what you’re doing with your rights."
With the BISG report there is a body of evidence to support the intuition of rights professionals: investment in rights management is good for business.
Interested in learning more about the benefits in investing in your rights management? We have a number of resources including a podcast with the IPG discussing various ways publishers can improve the management and trading of rights. You can also read more about our customer use cases and how Biblio has increased efficiencies in the contracts, rights and royalties operations of customers like Verso Books.
Learn more about how Biblio can bring efficiencies to your rights or contact us to speak to a publishing specialist today.