Media & Entertainment (M&E) is primarily a consumer-driven industry, and is emerging in amidst of disruptive digital-transformations. For M&E market players – changing audience preferences and technological advancements have led to dynamic operating models that cater to various business segments – Film Entertainment, Broadcasting, Music, Print-Publishing or New Media.
In this industry, Film Entertainment/ Production Studios drive the media supply chain. Further delving into this segment, we see innovative revenue streams at different stages of content consumption channels – say it Theatrical, Home Entertainment, or Cable & Satellite Television. And, global marketplace has opened up a treasure trove for existing and new contents to be re-imagined, repackaged, and redelivered across platforms. Therefore, Intellectual Property (IP) Rights & Royalty Management space throws a challenge in front of market players (say – Universal, Walt Disney, Warner Bros., Paramount Pictures, DreamWorks and others).
Typically, all production studios are driven by a common business objective – increase revenue and drive efficiency across the entire content lifecycle. Theatrical itself shows an increase from USD ~38 billion in 2016, to nearly USD ~50 billion in 2020. This is just the smaller pie of the business. The global M&E market is expected to reach a worth of USD 2.2 trillion by 2021; and the United States market is expected to grow to over USD 720 billion by 2020. Therefore, it is critical to streamline the licensing and distribution mechanism of Intellectual Properties (IP).
Rights for a product (or title) drive the complexity of IP management within media supply chain. Well, outside view just shows the tip of the iceberg; but, real complexities lie within. Sub-components within Rights attributes – say Territory, Media, Language, Format, Start and End Dates – and its various combinations add to problem. Additionally, Royalty processing and its management construct the key financial component in media contracts – including fees, payments, recoupable advances and royalty or usage rates – and constitutes a critical aspect for calculating royalties and usage statistics based on sales or usage data.
In day-to-day business, service providers (like – Netflix, Hulu, Amazon) rush for exclusive rights for prime contents (or titles) in-order to build the customer base ensuring no rights-conflict. And, this leads to ensure right set of product availability and its reporting. This means – market players not only need to manage the creation and distribution of the assets, but also protect their illegal usage across the entire media supply chain. And, these attributes lead to market solutions holding following key traits:
- Manage the complexities of digital media across the full content lifecycle
- Leverage the most efficient and scalable ways to manage and monetize content
- Distributers have total control & visibility over complex licensing & distribution processes
- Simplify the accounting complexities of deals from contract, to cash-flow reporting, currency distribution, revenue recognition and reporting
To leverage the market situation, smart players are shaping these challenges into future opportunities where digital accounts for majority of the revenue realization. In parallel, streaming is growing at an exponential rate as well. Currently, the industry is not matured enough to accurately track and manage the licensing & distribution in parlance to its associated rights. But, technological advancements are leading to consolidation of fragmented business activities – say, media rights management, royalty management, usage tracking, accounting activities, payment processing, and building intelligent reports. The dynamism itself makes this industry more interesting; and, therefore, now is the time to tap and gear-up for disruptive business models.