By Dennis Kneale
Long before the Internet began delivering infinite information, instantly, at our fingertips, The Wall Street Journal relied on one pulse-point for most incoming news—the Spot News Desk in New York. There an editor scrambled to keep up with incoming faxes and wire service reports, fearful of missing an important headline. Long after deadline, he would pore over reams of copy, “just checking to see if anything is likely to blow up in my face tomorrow morning.”
Rights management is like that—you hear about it only when something blows up in someone’s face. For example, an NBA game plays on your flat-screen at home but won’t show up on your iPad; or a TV program can’t air in some markets in Europe because of missing rights to an in-episode song; or a channel has permission to air a movie 30 times but uses it for only 25 plays. In all of those cases, rights management suddenly becomes visible—because something went wrong.
When things really go wrong, you end up with a dreaded story in The Hollywood Reporter, as when Netflix rolled out service across several countries in Europe without its hallmark House of Cards. That happened because Netflix didn’t have the right rights. The 1.6 million Netflix subscribers in the Netherlands won’t get House of Cards because those rights belong to Sky Deutschland. In France, 1.2 million Netflix subscribers must turn to CANAL+, which holds an exclusive lock on the first two seasons of the dark political soap. And although Netflix has begun renting out DVDs of Game of Thrones, Sky holds those rights in the Netherlands and Orange holds them in France. (You can read it and weep here: Why Netflix Subscribers in Europe Won’t Get ‘House of Cards’.)
It doesn’t have to be this way, guys. Myriad media companies are reaping upside rewards from codifying, digitizing, and overhauling their rights-management systems. By some sanguine (or wild-eyed) estimates, these companies are getting back $6 or $7 in revenue or other gains for every dollar invested in their new platforms—and some experts maintain that return is up to 20 bucks-per-dollar.
Chore, or Growth Platform?
“Luck happens when preparedness meets opportunity,” says Mukesh Sehgal, president and CEO of RSG Media, a rights firm he founded 30 years ago. “We work with leading clients, and, from the outside, they seem lucky. That luck came from being prepared, from knowing their rights at the most granular level, so that when the opportunity presented itself, they were ready to lead.”
Sehgal’s RSG Media sells a software platform and tools that enable cable channels and other media outfits to overhaul and automate much of their rights infrastructure. Most media companies seem reluctant to reveal details of their rights upgrade for competitive reasons.
One key case study: UK-based direct-satellite giant Sky, an RSG Media client, launched a premium online movie service for tablets and other mobile devices. It came together smoothly as a rapidly built add-on that might have posed a technical nightmare had it not been for state-of-the-art rights software.
Having stabilized at ten million subscribers across Europe, Sky isn’t expected to grow much more. So it aims to sell more services to the subscribers already in its orbit. Sky moved early to enable live programming to play on mobile devices and introduced Sky Go in 2011. Next, the company wanted to add a premium service to reinforce its image as an innovator and to blunt inroads made by Netflix and other over-the-top (OTT) players.
Enter Sky Go Extra, unveiled in early 2013. Instead of requiring users to access a live Net link to stream shows, as Netflix and others do, Sky Go Extra lets them download a movie to their tablets or laptops so they can watch it later, anywhere, anytime—without wireless Net access. Sky is the first (and only) service to offer this feature. Each subscriber can register up to four devices for $8.20 per month (on par with Netflix et al.).
Affording that unfettered freedom to its subscribers required Sky to line up extra mobile rights from all six major Hollywood studios, HBO, and other content owners. They were reluctant partners, fearing rampant download piracy, so Sky had to develop its own new technology to bullet-proof its network and make it impervious to freeloaders.
Meanwhile, the new service, backed by RSG’s RightsLogic platform, had to track which Sky customers were now also Sky Go Extra subscribers—and block access to those who weren’t. They also had to make sure a user could move seamlessly from his Xbox to his MacBook and back again, despite the different sets of rights triggered by that switch, and keep track of the hundreds of different rights accompanying every piece of video traversing its satellite network.
In return for all that hassle, Sky stoked higher revenue growth despite having no growth in its customer base. In two years, to mid-2014, a Cisco paper reports that “revenue generating units” (a way of veiling real revenue numbers) grew 25 percent, even though subscribers remained at 10 million. Sky Go Extra is a key reason for this increased revenue. Just 18 months after going live, the premium service had signed up 11.2 percent of all Sky customers, or 1.2 million homes, adding $10 million a month in extra revenue. Sky also uses Sky Go Extra as a free incentive to get more subscribers to sign up for the Sky Multiscreen service that charges an extra $18 a month for an additional set-top box. Multiscreen subscriptions are now up to 2.6 million, or almost 25 percent of Sky’s customer base.
Those upsides have been ancillary benefits to the real objective of Sky’s rights upgrade. “Where our project sprung from was a realization that as the broadcast world was diversifying and content was going on more devices, on demand, we needed an effective way to manage our rights information across all new platforms and services,” says Tim Taylor, Sky’s head of broadcast and media IT.
Taylor says a key factor was RSG’s ability to integrate its custom-tailored tools with Sky’s scheduling system and rights regime so that programs run automatically where and when they are supposed to run, on the fly. Other vendors started out in scheduling and moved into rights management, while RSG has “grown up from not a scheduling system but from creating a rights-management system in the first place, rather than evolving from another system,” Taylor says. “They were the best at what we wanted.”
That’s quite the plug … and the thing is, I didn’t even ask him for it.
Dennis Kneale, a former anchor at CNBC and Fox after two decades at The Wall Street Journal and Forbes, is a media strategist in New York.