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Content in the Wild: The Risks of Inadequate Rights Management

The following are David Marlin’s notes from his 2011 Rights Management presentation at Making Information Pay in New York City.

This work is based on his 12 years of experience in the field, and the recent survey conducted by IdeaLogical with BISG, and sponsored by The Copyright Clearance Center.  The quotes that follow are from survey respondents.

Content in the Wild

I’m going to start with an analogy from the field of evolutionary biology.

Back in the early 1970’s the Paleontologists Niles Eldridge and Stephen J. Gould observed that for long stretches there would be little change in the fossil record, and when changes did occur, then tended to occur in short dramatic bursts of extinction and speciation.

They called this phenomenon Punctuated Equilibrium.  This concept also applies to what is currently happening in publishing.

A growing cause of this change comes in the form of licensed content.  Until recently, publishers didn’t need to keep a tight rein on their rights management – the consequences of it roaming free in the wild were comparatively small.  The environment has changed.  Now, content is “not the kind of stuff that you can actually let out into the world” and hope to survive.

For the next few minutes, I’ll walk through some of the risks associated with rights management as expressed in our survey.  I’ll conclude by talking briefly about what BISG and the Rights Committee are doing to help us all adapt.

The Wild

What do I mean by “The Wild”?   If you don’t exert tight control over your content, how do you really know that it’s being used appropriately?

Survival will more and more require control over your content’s usage.  One of our survey participants summed it up best:  “I think it’s the scariest thing that I’ve heard in the past few years…because the value that we still have as publishers … as content curators and content creators  … if we don’t do a better job of this, we’re going to lose that advantage … very quickly.”

What happens if we don’t have control?  What are the specific risks?

Stakeholder Value

As with any business challenge, we need to know how to measure both the problem and our success in attacking it. In listening to our survey participants, most of the risks that they identified fell pretty nicely into one of 4 categories:

  • Brand
  • Legal and Compliance
  • Profit
  • Capital Investment

These risks impact several constituents, including:

  • Customers
  • Employees
  • Owners/Investors
  • Authors – Can I trust these guys?

Looking at these, a conceptual metric emerged for measuring the risk and reward:  Stakeholder value.  You can look at the impact to each of the stakeholders and evaluate the relative change in value.  Most importantly, you can use is as a criterion for decision making.

Let’s now take a look at each of these areas of risk/opportunity in more detail and think about their relative impact on Stakeholder Value.

Legal and Compliance

We’ll start with risks that fall into what I have called the Legal and Compliance bucket.

One publisher for instance saw rights management directly correlated with risk management.

Others expressed it similarly:

  • “The [biggest] issue may be that of potential liability to the business.”
  • One of the biggest risks being “exposure and liability associated with using content that we haven’t acquired.’

And the impact:  One public company’s SEC filings stated a “material weakness” in rights and royalty related internal controls, an egregious violation of Sarbanes-Oxley.

Any stakeholder will see less value in a company whose auditors just threw up their hands and said “material weakness.”

I could talk for hours about these risks, and there are plenty.  But I think you get the idea.

Brand

A consequence of legal and compliance issues are brand risk.

Several years ago I hired a researcher to find news articles related to these issues.  We found many, including some that received prominent mention in major publications.

In terms of the impact, again I could spend hours, but it’s not hard to imagine to consequences of a tarnished reputation.

Here’s one example:  When asked to rate the importance of managing author relationships and trust, one survey participant replied that, on a scale of 1-5 “Any author who ever hears me responding to this is going to go, it better be a five.  So it’s a five.”

Capital Investment

This next risk is in your decision of how to attack the problem.

You are going to invest a lot in new systems, services and processes to nail this problem.  The last thing you want is to complete an implementation 20 months down the road, only to realize, as one of the respondents did, that “a database system that creates extra steps instead of removes them is never going to be embraced.”

Tie that thought to another publisher who wisely acknowledged that they “probably will still be dealing with the decision made today in 15 years.”

Taming the wild may not come cheaply.  A wrong decision today could mean a strong negative impact to Stakeholder value.

Profit

A few weeks ago, a fellow business school alum approached me about using content in his new niche startup website, and licensing versus creating from scratch.

Think about that – any niche website (or app or TV show) needs content.  And what better place to get it than from a publisher that has already polished it up.

But are you poised to take advantage of this and similar other digital opportunities?  As one survey respondent said, “Unless you can organize your content in a way that makes the purchase very easy, it’s not low-hanging fruit.  And that’s kind of what I’m stumbling over right now is getting the content organized.”

These quotes from other participants summarize it best:

  • “we’re all sitting on the same problem . . . we’ve never really placed strenuous demands on our content in this way.”
  • “By the time they [(meaning the rights department)] got back to the requester, they had gotten tired of waiting and had gone in a different direction.”
  • Another spoke of an app developer looking for content who told her: “‘it’s just easier for me to go out and source my own content than to work with you guys,’”.  She continued, that’s the “scariest thing that I’ve heard in the past few years”.

Unless publishers address these issues, they will be leaving a big pot of money on the table and putting their existence at risk.

Risk Mitigation

Ultimately publishers need a reliable set of tools that both help them tame the wild content and support their operational workflows and information flows.

This is where the work of the BISG rights committee is so critical.  We are now deep in the process of developing a taxonomy that will describe the types of rights available, and how they can be used.  We have enlisted many of the brightest people in the industry with decades of combined experience.

The product of this work will provide a common vocabulary for people to discuss rights.  It also provides a foundation for creating standards to reduce the friction of rights transactions.

One of the most important results of this work will be the foundation for a robust rights data model.

From this data model, we will finally have the foundation to build the tools that will enable us to adapt to the wave of punctuated equilibrium to the next period of stasis, and be positioned to thrive in this new era of digital content.

David Marlin is the President and co-Founder of MetaComet Systems Inc., and co-Chair of the BISG Rights Committee.





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