Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.
Even the most optimistic in the industry would admit that publishing has been through a tough time during its necessary awakening to a new world order. Global recession, falling margins, supermarkets, Luxembourg’s death grip, disappearing bookshops and libraries, wider competition against entertainment products–take your pick.
There is a growing awareness of the need to invest in new areas: technology, direct-to-consumer strategies, metadata management, something, anything related to supporting ebooks, and so on. And with revenues squeezed, unless under the watch of a financial fairy-godmother, investing inevitably requires cuts to balance the books–and in the more dire cases, to survive.
Some cuts, sadly, have been common sense. There is no point investing as many resources, either internally or through outsourcing, in sales reps covering a drastically reduced number of bookshops, for instance. Publishers have even started to try to clean up the ridiculously overpopulated supply chain that sees content from authors into the hands, or onto the devices, of readers.
But other cuts make less sense and are counterproductive. I take issue with cuts in the quality of the end product, such as in the editorial process, when a reassessment of roles would work better–but that is the subject for another blog post. Here I’d like to reflect on one place where publishers should be investing instead of cutting costs: their rights departments.
I think one of the issues is that rights departments aren’t properly understood even by the publishers they exist within. They have traditionally been a group of people tucked away somewhere doing something about different editions while the core company focus remained on the core revenue from book sales.
Although it may seem like the easiest place to start, cutting costs isn’t always completed best by working from the periphery inward. Easiest is definitely not synonymous with best. In fact, solutions for greater profitability can very often lie in the usually ignored periphery.
Sales revenues have dropped but rights licensing revenue has in not–it’s still growing. No longer is rights revenue bonus money; it is not only now core revenue but one place where the biggest opportunities for publishers lie.
Let’s look back at the initial list:
- Global recession–there are trend-bucking and growing international markets that can be immediately accessed through licensing;
- Margins–licensing goes straight to the bottom line;
- Supermarkets/Luxembourg giants–let’s not tempt fate, but they are very much product-focused;
- Bookshops/libraries–for the licensee to think about;
- Wider entertainment competition–an opportunity rather than an issue in licensing, with huge revenues available for licensing across creative sectors.
And what’s more, licensing revenue is immediate. When I started my first publishing company, Legend Press, I didn’t want to wait twelve months for my first revenue, so I turned to licensing. Rights sales for seven editions and four languages later (all completed from my sofa, as it happens), and the opportunities in licensing were very clear.
Furthermore, just because it’s been done for a long time doesn’t mean rights licensing should be left gathering dust. The most valuable asset a publisher holds is not its stock list but that ball of intellectual property containing a myriad of different items that can be licensed in a global marketplace that’s more accessible and open than ever before.
So put the money where the money is. Continue to invest in technology, but especially where it will bring immediate results–and that is within rights departments. Put in place top-level rights management systems, bring the setup directly in line with current opportunities and push that department into the center of the office. Help them, and they will make you more money.
Invest today, new revenue tomorrow. That’s surely worthy of the full attention of all publishers.