In this series on content licensing strategy, I will walk you through the six steps necessary to be confident you have fully leveraged partner distribution through the Higher Education library channel. The principles and recommendations will apply to assessing and participating in other channels, such as the consumer channel, the corporate library channel or the public library channel.
Maximizing the revenue return from your paid content, or usage of your open content in licensed distribution channels, begins with a deep understanding of your complete catalog’s historical performance and the potential of future publishing output. In this first installment I will focus on the critical steps necessary to assess your catalog’s potential in licensing. To foreshadow future installments, here are the six steps I will cover to develop a complete licensing strategy:
Six Steps to a Winning Licensing Strategy
- Assess your catalog – published and forthcoming – to identify degrees of opportunity
- Establish a complete picture of all available channel partners
- Understand all available business models represented by channel partners
- Determine if your catalog and brand can demand an exclusive with a distribution partner
- Define your strategy: what content and when, which business models and which partners
- Build a template to track and measure performance across partners and business models
Step 1: Assess your catalog – published and forthcoming – to identify degrees of opportunity
At first pass this step may sound obvious or easy, but I have repeatedly seen publishers and licensing distribution leaders, especially those with vast catalogs, move too quickly to bucket all or much of their catalog into a single business model with no windowing (timing of release of titles across various models) for distribution. And categories, such as front-list or back-list, while historically useful internal organizational tools, often miss the mark in bucketing relative opportunity.
To achieve optimal revenue/usage from your full catalog I suggest establishing three categories: 1. new releases with high potential, 2. low potential/longtail and 3. medium to high potential.
Benchmarking Low Potential/Longtail and Medium-to-High Potential Content
The benchmarks for low potential/longtail and medium-to-high potential will vary by publisher but will always be relative to one another. For example, a small publisher/distributor of anthropological ethnographic film might view 20 sales per year of a single film as medium to high potential (given the relative size of the audience in the academic discipline), while a publisher of a book on servant leadership would consider 500 copies a year as a threshold for medium to high potential given the opportunity in business schools and leadership programs across the university. The critical point is to engage in extended analysis of your full available catalog to define low versus medium/high potential from the perspective of the market size and the long-term performance of the catalog. I strongly advocate for this approach over front-list/back-list thinking as strong performers very often maintain strength of sales and usage for many years. This perspective informs the thinking behind the long tail concept, which functions independent of publication date:
There is still a place for front-list/back-list planning (inventory management for example), but not in evaluating the long-term revenue and usage potential of content where multiple digital access/business models are available with widely varying royalty rates.
Identifying New, High-Potential Releases
Upon completion of the low to medium/high potential analysis, the performance of various content categories and silos within the catalog will reveal the likely potential for future releases. For example, you might find titles published on a particular topic have a very strong first six months of sales followed by a rapid tail off, whereas titles published on another topic have a slow but steady sales profile over many years following launch. Identifying new releases with high potential is, of course, not easy, but it’s one of the critical skills publishing and distribution leaders must cultivate and, frankly, be measured by as these are the releases that drive so much relative success for publishers small and large.
The motion picture industry has a long-established practice of windowing content from theatrical release, through Blu-Ray and streaming title sales, through release on their own platforms for subscription access and on through the available alternative business models with channel partners, each typically generating less topline revenue and successively lower margin. Publishers of content relevant to Higher Education libraries must aim to identify those new releases each year that can fit into an industry-appropriate windowing model; more on this point when we get to entry number five in this series: Define your strategy: what content and when, which business models and which partners
Review your Catalog’s Revenue Generation: All Channels, All Partners, All Business Models
Completing this first step will require a comprehensive review of your catalog’s revenue generation across all channels, channel partners and across all currently deployed business models in each channel. Each publisher/distributor will need to establish the period of analysis, but I generally recommend the past 10 years. Based on the discipline/field/topic of publication and the size of the expected market, you will define what constitutes a low versus a medium/high performing benchmark for the existing catalog. This analysis will, in turn, support the identification of those new releases with high potential, which will be critical to underwriting the success of the broader publishing and distribution enterprise. With this analysis and framework-for-the-future in place, we can move to step two: Establish a complete picture of all available channel partners, coming soon in a follow-on blog post. I invite you to subscribe here to get a simple notification when new posts publish.
If you want to work together on your licensing strategy, contact me directly.
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