MISTV – The latest developments in managing rights and royalties
Libor Adamek, CEO, MISTV
As the broadcasting business becomes more and more focused on efficiency – as is the case in all industries – changes in the administration of rights and royalties are not fundamental in their nature but are generally motivated by economic effectiveness. For a number of years, broadcasters have focused on maintaining as small an inventory of purchased rights as possible; currently there is increasing focus on this to further drive economic efficiency. However, this minimalization still has to provide the necessary flexibility to enable changes in broadcast planning so that broadcasters can react to competitors in order to achieve the best, or desired, position in the market by using the inventory in the most effective way. In the case of commercial broadcasters, they also have to secure the flexibility to respond to the market situation with the aim of maximizing their revenue.
This is important to both broadcasters and content distributors. As the broadcasting business becomes more and more global and a corporate business, the number of rights purchases made internationally – when one deal is done for multiple countries – is growing dramatically. In parallel to this evolution is significant diversification of broadcasting towards specific audiences represented by many new thematic channels in addition to the traditional ones for the general audience. This trend echoes the boom of non-linear (VOD) platforms for content distribution. All these changes and developments of the broadcast industry result in much more detailed and exactly-specified license costs and all other expenses related to rights acquisition and their use, as well as license conditions’ definition and evidence.
The most visible changes in the field of rights purchases and their administration are flexible conversion and compensational runs. These provide broadcasters with a wide range of possibilities on how to minimize costs and further improve content scheduling effectiveness of thematic channels with quite a small audience when compared to the general audience, but quite well targeted from the content as well as from the commercial point of view. The compensational runs allow multiple runs on the thematic channels instead of just one as is the case for general audience ones. Conversion runs are even more flexible, allowing back and forth changes in the number of runs on the basis of conversion ratios, which are generally based on the average shares of particular channels. As I see it, this is a quite fair and logical solution from the rights pricing point of view, but I also know that it may become quite challenging from the administration and evidence point of view: this is the result of the fluidity of conversion and compensational runs. Based on my experience and feedback from our users, I am glad to say that we have managed to handle this challenging matter in MISTV® MIRA quite well to our clients’ satisfaction.
This also goes hand in hand with the fact that the subsequent resale of rights acquired by one broadcaster is a becoming daily occurrence rather than a rare situation. I believe that this is caused by the changes of approach on both sides. The distributors are doing their best to sell as much of their content as possible using the most lucrative titles they have. These are therefore sold almost exclusively in various large packages which include rights for other content the distributors have in their portfolio, but which would be quite hard to sell on their own. It is not because it would be expensive, but generally because there are huge amounts of similar kinds of content from the broadcaster’s point of view. As the broadcasters are trying to minimize their expenses for content rights, this is one of the ways to achieve this task to mutual satisfaction.
Broadcasters are nowadays also focusing on optimization and in certain cases minimization of the payments for royalties as they can represent a non-negligible part of their costs. This is happening not only in respect to the different approach to linear and non-linear broadcasting, or let’s say content distribution, but also in respect to the thematic channels versus the traditional ones for the general audience. This can mean usage of different clip versions with respect to the music actually used in a movie or series for broadcasting compared to the original.
Our solution MISTV® MIRA is a modern broadcast management system based on latest and best workflow practices, and fully supports and covers needs and workflows related to the challenges covered in this article.
