One of the findings of our StartWithXML project was that book publishers can expect the market for pieces of their content and databases of their content to grow, even while the market for books themselves may not. In the context of our XML research, that is part of the reason publishers need to tag their content deeply (so they can find things) and make their content agile (so it can adjust itself to the different display requirements of different end users.)
After all, we’re in an era where web site content is needed by every entity on earth. Most of it will be unique and will need to be uniquely created. But an enormous volume of content for web sites has, and can, come from existing intellectual property.
The challenge is to create an efficient marketplace to enable that content to be found, licensed, and paid for. It can’t be the function of each individual publisher to peddle and transact for its own wares in this environment. It wouldn’t be cost-effective for the buyer or the seller.
And this brings us to Copyright Clearance Center, CCC, a not-for-profit corporation that licenses published content of all kinds for re-use by what must be the largest and most diverse collection of content purchasers served by any aggregator on the planet. We’ve gotten to know CCC this year as a client. We’ve never encountered an organization in our industry dealing with more complex challenges and it looks like CCC will be in a position to play a critical role helping publishers cash in on the new opportunities in digital licensing.
CCC was formed in 1977 by a group of content users, authors, and publishers and opened its doors on January 1, 1978, initially to enable publishers of all kinds to collect the payments legitimately due to them for internal-use copying of material, primarily by corporations and academic institutions. The number of entities licensing content from CCC is vast: over 35,000 businesses and more than 1,000 colleges and universities. Prior to CCC, the market was inefficient, costly, and fragmented and the cost of negotiating the use-by-use licenses made widespread unlicensed use inevitable.
Initially, CCC collected this copying money on a per-use basis, which was more efficient than the many-to-many negotiations that took place previously, but must still have been incredibly cumbersome. Beginning in 1984, CCC went to its “repertory” model, by which annual license fees allow unlimited copying of all the material covered by the license.
Because CCC effectively represents all the print content — newspapers, magazines, journals, and books, and, increasingly, photographs and blog material, it makes utter sense for users to pay them a fee to legitimize (almost) all their internal xeroxing at a stroke. CCC employs sampling-and-projection methods similar to what the music licensing agencies ASCAP and BMI use to grant radio station license fees to song owners and distribute money to rightholders.
Over the past decade, CCC has seen its revenues shift from being nearly 100% print copying to what is now 60% digital rights. They are exploring adding additional services, such as specifically licensing re-use in emails or email attachments.
CCC is a remarkable community resource that publishers need to understand better because there is no practical alternative to them for much of what they do. If two conditions apply, then CCC is essential to a publisher maximizing its revenue:
1. if the licensor needs material from that publisher, but from other publishers as well;
2. if the transaction value is low and won’t support much conversation or negotiation on either side.
The StartWithXML research definitely suggests that revenues that come with those two caveats attached will be a fast-growing part of publishers’ businesses for the foreseeable future. That means greater value for publishers in their CCC relationship in the years to come.
Our work with CCC began last December, just about the time discussion about the Google settlement and the proposed Book Rights Registry started to heat up. The question has arisen from several quarters as to whether the BRR offers competition to CCC. My own hunch is that if it ever does, that day is many years off. The BRR has a huge job in front of it validating and securing its database of books. CCC would have very few licensees if all it had were books; book publishers benefit from the presence of magazines, newspapers, and journals in the mix. The BRR is a long way from even thinking about setting up all those relationships.