On Monday, I am part of a webinar discussing “Territorial rights in the digital age”, a research report I wrote earlier this year for Livres Canada Books. Although the paper was prepared with a Canadian audience in mind, the lessons learned apply more broadly.
Among those lessons: digital formats are collapsing lead times for clearing rights globally. Increasingly, consumers expect that a digital book available in one market should be readily available in any market.
This trend puts pressure on publishers’ traditional approaches to negotiating rights deals. The report addresses some near-term options, including immediate release of digital content, sold directly or through local partners.
A few weeks ago, O’Reilly Media’s Kat Meyer sent me a link to a profile of Ryan Kavanaugh, chief executive officer of Relativity Media. In making decisions about the films it produces, Relativity uses a data model whose inputs emulate the approach described in Michael Lewis’s 2004 book, Moneyball.
A brief synopsis: The Oakland Athletics pioneered a statistical approach to player selection that has helped them remain competitive with a limited payroll. The team has met with some success, though they are still trying to win the last game of the season.
The article’s author, Joseph Guinto, pointed out how Relativity pre-clears its film distribution with a network or global partners:
“… unlike most major studios, who own their own distribution companies, Relativity has contractual relationships with 117 distributors around the globe, each of which is under contract to buy any movie Relativity makes at a preset percentage of the film’s budget. In return, the distributors are guaranteed a piece of the back-end revenue for each movie.”
For its part, Relativity succeeds because it is committed to the use of data that it constantly refines. That gives it a track record that partners can evaluate and support.
While Relativity offloads at least some risk, it also shares the upside, perhaps the most valuable thing that it can do to keep a global network intact. That moves the rights business away from transactions and firmly toward partnerships.
Of course, partnerships blend roles. A world in which distributors fund a production and the producer shares the revenue invokes a bit of Yeats: “How can we know the dancer from the dance?”
In conversation, Meyer wondered if this is a model that book publishers might adopt to both manage risk and speed time to market. It’s a good and timely question for publishers to ask themselves.