The alternative to an optimized multi-partner, multi-channel content licensing and distribution strategy is to develop long-term, exclusive partnerships for distribution in all or select channels in which your publishing or distribution business participates. In this six part series on content licensing strategy, I focus almost entirely on the tactics and tools needed to build out a licensing strategy based upon working with many partners. This installment, focused on the context and opportunity for an exclusive distribution deal, is a counterpoint to the tactics I have presented in the first three parts. Exclusives are rare opportunities and frequently not in the best interest of the publisher or the channel partner extending the exclusive offer. With this caveat stated, let’s move to a discussion of the three “must haves” for a publisher to be in a position to seek an exclusive and then consider mistakes to avoid that will dilute the potential of an exclusive once entered.
The Three “Must Haves” to Demand an Exclusive in Higher Education Library Distribution
1. Brand Power:
Your brand must be perceived as a leader by the key reviewers of your content in the university: the subject selector librarian, the faculty that teach with your content and the patrons/students that consume your content. While brand power is a given for high-profile media businesses like Sony Picture Classics, The Harvard Business Review or The Met Opera, brand power does not necessarily mean your company needs to be a household name. Rather, your business and brand must be recognized as authoritative and a leader within your publishing niche, for example nursing training or ballet skills.
2. Publishing Volume and Predictability:
A distribution partner willing to engage in the lengthy discussions and financial considerations that underpin an exclusive distribution partnership will require a predictable and significant volume of new content flowing in annually and across the length of the exclusive. This consideration will be discipline-specific and informed by the range of topics published. For example, a publisher of nursing training videos may consider 25 new and updated titles a year to be significant whereas a major journal and book publisher such as Taylor and Francis will publish hundreds if not thousands of titles in a year.
3. Unequivocal Comprehensiveness:
This point will be contested and debated by both publishers and the partners that seek and offer exclusive deals. In my experience as both a publisher and in running the video and ebook aggregation platforms at Alexander Street and ProQuest, a non-comprehensive exclusive was very difficult to articulate to our library customers. What do I mean by comprehensive? Most simply put a comprehensive exclusive must be easy to communicate and understand from the customer’s perspective. For example, the entire back-list/back-file from 2010 to 2020 available in digital streaming. And another example, all new books published from 2021 to 2025 in available access models in the partner platform. When an exclusive becomes diluted, even in a well-defined manner, it becomes challenging to communicate to the customer and thus becomes suspect. This point provides a useful segue to our next section.
Mistakes to Avoid That Dilute the Potential of an Exclusive:
Do not enter an exclusive partnership with options and outs in mind. Most exclusives will come with a minimum guarantee paid annually, or an exceptional royalty rate or an advance upon signing. This is your assurance that your partner is “all in” on making the relationship successful and you as the publisher should be of similar mind. When both publisher and channel partner are fully committed, the quality of the joint-marketing and sales support and training will be topnotch. A comprehensive and predictable exclusive, simply communicated to the customer, will yield benefits over time that need trust and confidence to unfold. If, as a publisher, you enter into an agreement with carefully worded – or not so carefully worded – caveats in mind to exploit post agreement the negative impact will be significant. Unfortunately, I have seen this scenario play out on multiple occasions with publishers making short-term gains at the expense of a long-term partnership.
Do not enter an exclusive without significant guarantees from the channel partner. As noted above, this may be an advance, a minimum revenue guarantee or an exceptionally high royalty rate, or some combination of these. You can ask for guaranteed marketing investments and sales training conducted by your publishing team with your new partner’s sales team. If you feel that the initial exclusive offer is too small you can negotiate accelerators across the term of the exclusive. The larger point is as a publisher you must fully commit to the exclusive. In exchange for your full commitment you should secure significant monetary gains and the opportunity to ensure your content and brand are appropriately and correctly communicated to the customer.
Lastly, do not withhold information about substantive unexpected changes in your publishing program and output. Your channel partner works with hundreds if not thousands of publishers and understands well the vagaries of original content creation. By keeping the channels of communication clear, honest and open you give your partner the opportunity to communicate with the customer well in advance of scenarios such as publishing volume decline, rights losses and other such changes to expectations.
Exclusives are rare and special opportunities for both the publisher and the channel partner. The opportunity to build a long-term relationship that can span decades is real. It is my hope that this installment in the licensing strategy series will help publishers assess the exclusive opportunity, negotiation and relationship. In the next installment in this series I will turn to the articulation of a specific licensing strategy: what content and when, which business models and which partners to maximize return and usage in the higher education library channel.
If you want to work together on your licensing strategy, contact me directly.
Read more about: Licensing