Clearing the Rights Bottleneck
One of the biggest bottlenecks to commerce in digital content is rights research and clearance. I can't tell you how many deals I've seen that boldly announce plans for the conversion and distribution of tens of thousands of titles only to find out that the rights couldn't be cleared in anything near a reasonable time frame. This experience has been shared by many people in the industry — some feeling the pain more acutely than others. In this article, I'll highlight the need to address this rights bottleneck, and talk about some of the steps we're taking at Publishing Dimensions to get through it.
All transactions are rights transactions
There are two major transaction types in the traditional world of publishing: sales of physical books and sales of rights. Because they are quite different on the surface, entirely different organizations and economic structures have evolved to address them. This historical dichotomy is starting to break down with the introduction of digital distribution. In fact it is becoming increasingly clear that these traditional transactions are actually two separate ends of continuum.
With the addition of digital distribution, what was in most people's minds two very separate worlds is really coming together into a seamless continuum that exists along two axes: the degree to which rights or content are independently made tangible in the transaction. Taking this view publishing transactions can be envisioned along a continuum running from "pure" rights with implicit content, to "pure" content where rights are implicit. For example, in the case of a movie deal the rights are quite explicit and the content implicit. In some cases the movie rights are sold before the book is even available. In the case of a p-book, the rights are implicit and the content explicit.
These two represent extremes on either end of the scale. Between them there is arrayed a whole range of transactions. At one end of the continuum there is the sale of physical books through traditional channels. POD neatly fills in the space between pBooks and eBooks — POD titles are held and distributed through part of the supply chain digitally, but then end as physically printed pBooks in the hands of consumers. Then comes eBooks, on-line access, permission sales and finally a pure rights sale.
It turns out that this way of looking at things has more than just a conceptual appeal to it. Use of POD can ease a transition into eBooks, yield some substantial short-term revenue, assist in preventing reversion of rights and simplify somewhat the entire book supply chain.
Let me digress for a moment to discuss DRM, or Digital Rights Management. When I speak of Rights Management, I'm not referring explicitly and solely to Digital Rights Management (DRM). DRM is only a very small piece of the puzzle. It is a technology used in digital distribution for specifying and enforcing the rights associated with the transfer or sale of digital content. What I'm talking about here is the entire world of Rights Management that works in transactions across the entire chain, not just the subset with which DRM is associated.
The real issue here is that at every single level of this continuum you need to know the rights you have — this is true not only for every type of transaction, but also at every stage in the supply chain. It is becoming clear that every publishing transaction has a rights transaction at its core.
Rights Management is becoming critical
Rights management in the largest sense becomes increasingly relevant with accelerating commerce in IP — both content and pure rights. There are a number of fairly dramatic estimates out there of how large the market for digital content will grow and how rapidly. Most people in trade publishing think of this as wild-eyed optimism about eBooks, but if you just look at the sheer number of new innovative offerings such as Questia, eBrary, iCopyright, an RightsCenter.com, to name a few very diverse companies, you'll see that there's a great deal of activity.
Even if you're somewhat skeptical about the short-term (or even ultimate) success of the new formats and channels, there's reason enough to pursue rights management in the existing business.
By capturing which rights have been licensed by a publisher and which have been sub-licensed, not only do we provide the raw data for digital distribution, but we also open revenue opportunities — the hidden gold in the filing cabinets of publishers' contracts departments. This data can easily be used:
- to pursue non-payment for subrights that have been sold to licensees
- to generate further sales either for rights that haven't been previously sold
- for re-sale of rights upon expiration of existing contracts.
All of this is, of course, much more easily said than done. If we've learned one thing over time, it's that the rights world is in a constant state of flux. I attribute this to a number of causes including the onward march of technology, globalization, and the shifting statutory and judicial environment driven by these factors. The result of this is a shifting picture of what actually constitutes a grant of various types of rights and what is acceptable between authors and publishers in terms of a rights grant.
This changing environment has led to lawsuits (such the recent Random House, Tassini and National Geographic suits), inertia, and either a feeling of impending doom or irrational Pollyanna-ism in many quarters. The biggest day-to-day problem, though, isn't on such a high level. The biggest problem faced by most publishers is that the clearance process is manual, complex and out-of-date. Just as most publishers' content databases are their warehouses, their rights databases consist of row-upon-row of filing cabinets backed up by pallets of document storage boxes at Iron Mountain or Pierce-Leahy. This type of storage guarantees effort, delays, and problems overall in doing research on any type of large scale. Often the same contract will have to be pulled and referred to multiple times each time there's a different inquiry — something that will only increase as the content offerings become increasingly diverse. And as you go back in time the problem only increases as you have to trace the chain of publisher acquisitions, sub-rights sales, rights reversions and copyright registrations that have occurred (or not).
The result of all of this is that it is difficult for publishers to know what rights they have available. And the returns from projects to remedy the situation are far from clear. The solution to this problem is also far from clear.
A solution
At Treadwell Media Group we are getting a handle on one way to address the problem. We have developed a process to provide independent, low-cost and secure analysis of both author and subrights contracts, which we then populate into a rights management database for the publisher to use. The contract is available as an image — for reference by attorneys or others needing to interpret nuances in terms or in the case of litigation — but it is also available as XML and in full text if desired. With our process it is still necessary to touch the contract, but we believe that by touching the contract a single time, and providing that information for the easy review of experienced contracts personnel we will assist the publisher in overcoming many of the barriers identified earlier and begin to remove the rights bottleneck in getting digital content available for sale.
By taking a pro-active stance in getting their rights information under control, publishers will not only benefit themselves in increasing contracts and permissions productivity and in realizing additional subrights revenue, they will also position themselves to take advantage more fully and quickly of the developing digital content opportunities.