A year ago last March, the Book Industry Study Group hosted a conversation aimed at uncovering what were the key transitional issues publishers needed to deal with in the current decade. I was not part of that effort, but I chimed in with my two cents in a post in which I said that getting rights databases straight was the most critical concern that, by my observation, was not being adequately addressed by most publishers.
The underlying point of the piece was that publishers will find that revenue opportunities for licensing pieces and fragments are an expanding opportunity while they will see sales of books themselves increasingly challenged.
Over many years, trade publishers have evolved with “permissions” activity, which is where much of this fragment licensing falls, being managed separately from “subsidiary rights” sales. The latter, although declining with the great reduction in book club and paperback licensing revenue over the past three decades, is still seen as a revenue center.
The former is seen as a “cost”. Although it frequently involves granting permission to use a small amount of content for free, it has been a growing revenue opportunity because of digital change. In addition to wholly new uses like for apps and websites, textbook publishers, for example, now often need rights for a “family” of products, mostly electronic, that surround a textbook. But “permissions” in many — probably most — trade publishers is still seen primarily as a cost to be managed, not a revenue opportunity to be seized and nurtured.
This is leading to costly disconnects and increasingly widespread frustration. Our clients at Copyright Clearance Center, who provide tools to automate what has always been an overwhelmingly manual process, see this every day.
They see many publishers whose requirements when they license rights from others are not matched by the offers they’re willing to make when others want to license rights from them.
They see publishers incurring costs handling permissions requests manually that far too often exceed the revenue those permissions can generate, even though there are automated tools that can make those permissions profitable.
They see a growing clerical burden, both in managing an increasing number of permissions to be granted and in securing an increasing number of permissions now required (because trade publishers are needing a variety of digital licenses they didn’t need before either), with no strategic assessment of how that should be addressed.
In response to an increasing awareness at CCC that most publishers don’t have an articulated view of these changes, or any particular idea about how these things are working in their own shops, CCC created a questionnaire that allows any publisher to do a self-assessment of their licensing and permissioning activity. As we were offering some help developing it, I realized that the questions spell out things every publisher ought to be thinking about. So I got CCC’s permission to reproduce it here.
1. Do you know how much it costs you to process a single re-use request with your current procedures?
2. Does your average permission fee, including zero dollar licenses, cover the cost of each transaction?
3. Is your total number of permission requests and corresponding revenues growing year over year?
4. Are you sure that the requests you answer are the most important and lucrative ones and the ones that you don’t respond to are the less important ones?
5. Are the requests that don’t get processed quickly enough for licensees to be able to use your content growing in number?
6. Have you recently reviewed the processes you use when publishers request permissions from you?
7. Is your permissions granting managed entirely by internal staff?
8. Does your organization consider rights and licensing a strategic priority?
9. Do you have a process to summarize and share the information about permissions requested and granted more broadly in your organization (i.e. with sales, marketing, editorial, etc.)?
10. Have you analyzed your permissions and licensing revenue and usage data alongside of your direct sales revenue and usage data?
11. If yes, do you do this routinely?
12. Do you incentivize your rights and permissions managers to meet a revenue goal or efficiency goal?
13. Do you pre-price your permissions and revisit your pricing annually or semi-annually?
14. Do you require prepayment for republication rights?
15. Would a service providing consolidated tracking, reporting and payments for your permissions be worth exploring to reduce your costs and organizational strain?
16. Is there any permissions granting activity within your organization but outside the rights and permissions department (i.e. permissions granted directly by editors or the sales department?)
17. Have you compared your policy and process on granting rights to what you want when requesting rights?
18. If you answered Yes to Question 17, do these policies align?
I urge publishers to think through this list of questions for their own organizations. The entire activity of responding to permissions and secondary licensing requests has gotten far too little thought to date.
One tool offered by CCC is its RightsLink service, by which a click-thru opportunity “at the point of content” enables automated licensing for many reuse cases. As Alfredo Santana, the Associate Director for Global Rights Operations at John Wiley will explain at our “Book Publishing in the Cloud” conference on July 26, the up-front work of putting in RightsLinks pays for itself very quickly when it is implemented. Are you going to join us at the event?
It has nothing to do with the subject of this post, but I wanted to acknowledge with thanks and without delay the letter published yesterday in the Wall Street Journal by Senator Chuck Schumer (D-NY) entitled “Memo to DoJ: Drop the Apple eBook Suit”. It is probably a lot to expect that any of this can reverse the course of the coming Court decision (due in early August) but it is a further sign, as I think the letters from the public will prove also to be when they’re published at the end of the week, that the arguments of the industry against the “price-fixing” hysteria are starting to be heard. I took my own crack at that in a speech last week.