Whether you’re managing a handful or thousands of titles, royalties and licensing can be very complex. Spreadsheets, manual accounting, and basic management simply cannot keep up with modern royalty management—unfortunately leaving money on the table is all too easy.

Managing Royalties and Licensing

Royalty payment percentages can vary significantly and tracking rights across your distribution partners to ensure proper payments and receipts can be a maze. As companies evolve, merge, or go out of business, deals get even harder to track.

Complicating things further, very few standards exist among media and distribution companies on handling, reporting, and collecting payments. There also may be domestic and multiple foreign rights deals, and all the metadata associated with deals must be reported, captured, and assessed. There can literally be millions of line items to reconcile.

Licensing deals can also span multiple platforms, distribution points, and windows — adding to the overall complexity. You must be proactive to ensure full payment for rights and royalties. The right software solution can automate the process, ensuring licensees accurately report and calculate payments. Traditional accounting software cannot deliver the granularity required to manage entertainment financials and account for every aspect of royalties in and out for contract compliance.

Overlapping Elements

Even if you’re working off boilerplate templates to track your assets, every licensing and royalty management deal is unique. Deals span multiple buyers, years, territories, and licensing cycles. Additionally, every rights management platform seems to manage royalties according to its unique rules and quirks. And, while opportunities abound with streaming, FAST channels, and the like, so are the tracking and managing aspects.

For example, one film title might have:

• Theatrical rights
• TV rights
• Streaming rights
• Ancillary rights
• Music rights
• On-demand/rentals
• Residuals
• Third-party licensing
• Multiple pay windows
  
  

Each deal has a unique structure. And within every agreement, there could be calculations for multiple royalty amounts and various methods of revenue apportionment.

How complex does it get? Consider that a library of 300 titles across 80 territories covering 30 principal rights adds up to more than 76 million combinations for a small film library. Multiple seasons, episodes, and versions for TV and streaming programs can create royalty management project lists that exceed 10,000 unique IP elements.

Keeping track of everything is nearly impossible without rights and royalty management software. There aren’t enough hours in the day to sort through the minutiae of every deal using spreadsheets or legacy systems not designed for royalty management. Payments and opportunities will be missed without this tool.

Maximizing Royalties by Incorporating Financials

Whether you have an enterprise or boutique media company, you should employ rights management software that incorporates financials. By bringing your intellectual property and financials into a single platform, you can calculate opportunities and track even the most complicated royalty payments. Such an interface simplifies workflows, allowing your teams to manage all aspects of your titles with intuitive capabilities and sales tools.

To learn more about this, dive into our guide, Why Financial Capabilities Are Important In A Rights Management System. Learn how to find hidden revenue, prevent over- or under-reporting of royalties, and identify new opportunities! 

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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