No matter the scale, every media company grapples with the intricacies of rights management; yet, smaller media companies often underestimate the need for dedicated software, mistakenly believing their size exempts them from the complexities. They might think their library isn't extensive enough to warrant it or that they can manage calculations manually. The reality is that rights and royalties have become very complex. Global selling, streaming services, FAST channels, and vast differences between agreements and release windows have made managing rights very challenging.
Even minor discrepancies in validating rights can create significant revenue shortfalls. If you’re not using a platform designed for entertainment rights management, you’re likely missing opportunities — even if you only manage a handful of titles.
Here are three reasons why a focused financial approach is pivotal for even smaller media companies monetizing off rights and royalties:
1. Reduce Risk
Manually managing rights and royalties using spreadsheets leaves too much room for errors. It's easy to accidentally overpay or underpay rights holders without a system specifically designed to accurately track complex contract terms and royalty calculations. Minor mistakes can create a significant risk of lost revenue and relationship damage.
Failure to accurately account for the nuances in agreements also leaves you vulnerable in the case of audits. Without detailed visibility into how you calculate payments, you may struggle to defend your numbers if discrepancies arise. Rights management software provides an auditable record system so you can confidently stand behind your figures.
You’re not just selling content. You’re selling intellectual property for a particular period, space, or territory. As more distribution opportunities arise, keeping track of them gets exponentially more difficult. Royalty management software automates complex calculations so you can be confident that everyone receives what they deserve. You don’t want surprises for those on either side of the relationship.
2. Decrease Costs
Rights are complicated. It takes more time and effort than you have or want to spend, but you must ensure it’s accurate. Manual data entry and complex rights formulas can take hours to aggregate without the right tools.
Then, you have to double-check everything to ensure accuracy. Still, mistakes happen and can be costly—and they’re more common than you might think. One study reported that nearly three-quarters of all spreadsheets have errors, and one in four go undetected. A spreadsheet error can (and incredibly has!) create hundreds of millions of dollars in mistakes.
Automated rights management software streamlines the process with rules engines to automatically calculate complex royalties and validate contracts.
Even a single title or small library can have multiple agreements, windows, and distribution. Payments based on viewing, international rights, and numerous streaming services make it challenging to validate compliance and payments manually. You can significantly reduce labor costs to manage your film and program catalogs in a centralized platform.
3. Increase Revenue
You’ve spent a lot of time and capital creating content and negotiating deals. You need to make sure you are getting paid for what you’re owed to optimize your investment.
You also need detailed and accurate reporting options to maintain solid business relationships. When statements contain errors or don't align with contract terms, it damages trust and credibility. Distributors and networks may take their business elsewhere if they lack confidence in your ability to manage content rights properly.
Rights management software should automatically validate contract terms and calculations. Detailed audit trails provide transparency and gives stakeholders confidence in your numbers, which helps strengthen partnerships. Conversely, discrepancies or confusion on invoices or statements can undermine the relationship and hurt your cash flow.
The best rights management solutions will also provide automated reporting tailored to each rights holder, saving considerable time spent preparing custom statements and creating personalized reports for each partner in the preferred format. Robust reporting makes it easier to conduct business and helps ensure payments are handled promptly rather than requiring back-and-forth discussion or questions about reports.
Reduce Risk, Decrease Costs, and Grow Revenue
The less time you spend on financial calculations, the more time you can put toward developing relationships and finding more opportunities to grow your revenue. No matter the size of your media company, you need a platform that helps you reduce risk, decrease your costs, and increase your revenue.
Learn more in our guide, Why Financial Capabilities Are Important in a Rights Management System. In it, we outline the critical elements your rights management platform should have, how to assess options, and the right questions to ask vendors to find the choice perfect for your company's growth.
FilmTrack is an RBC Company and subsidiary of City National Bank Member FDIC. City National Bank is a subsidiary of Royal Bank of Canada.
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