Ultimate Guide to Licensing Revenue Management for Linear Media Distribution
BLOGMar 30, 2022
Licensing revenue management comes with a complex set of challenges for content owners who license their assets to traditional cable, broadcast, and over-the-air distributors. And while the emergence of new distribution models like vMVPD and FAST, along with the widening landscape of content distributors operating in these (and other) models, is creating new revenue opportunities for content owners, it’s also increasing the complexity of revenue management in ways that current tools and processes can’t handle.
For content owners that depend on legacy systems and time-consuming manual processes to manage licensing revenue, this new environment has created revenue management challenges in areas like data normalization, distributor visibility and agreement compliance. To meet these challenges, content owners should embrace AI-driven software solutions that can streamline, automate, and add value to licensing revenue management for linear media distribution.
In this ultimate guide to licensing revenue management for linear media distribution, we’ll explain:
- What is licensing revenue management for linear media distribution?
- How do content owners manage revenue today?
- How are new distribution models transforming revenue management for content owners?
- How can AI-driven software solutions help with licensing revenue management?
- How should content owners choose a software solution for licensing revenue management?
- How does Revedia help content owners manage distribution agreements and maximize revenue?
What is Licensing Revenue Management for Linear Media Distribution?
This guide is for content owners who license content assets to linear media distributors.
Content owners often include TV producers, TV production studios, content creators, and even content distributors who acquire and sub-distribute content assets. A linear media distributor is a company that contracts with a content owner to distribute a content asset on one or more linear media services, usually in exchange for a percentage of revenues generated by the asset.
A linear media service can be defined as a media service that follows a programming schedule set by the provider. In contrast, a non-linear media service (think YouTube, Netflix, Disney Plus etc.) allows the viewer to choose what program to watch. Linear media services include traditional Multichannel Video Programming Distributors (MVPDs) and Pay TV networks, as well as modern Virtual MVPDs (vMVPDS) and FAST service providers (more on these later).
A distribution agreement is a contract between a content owner and a linear media distributor. Distribution Agreements are complex and varied, but the general model grants linear media distributors the right to distribute content in certain media markets or on a certain platform(s). Licensing fees are then paid to the content owner, either as a flat up-front fee, a royalty, or as a percentage of generated revenue.
For content owners, licensing revenue management is the essential practice of tracking and managing the revenue generated through distribution agreements. This includes activities like:
- Aggregating data from multiple distributors to measure content performance,
- Reporting on the financial performance of content assets,
- Accurately valuing content,
- Auditing distributors for compliance with distribution agreement terms,
- Forecasting future revenue, and
- Optimizing licensing negotiations.
Diverse Distribution Models are Transforming Licensing Revenue Management
Historically, linear media distribution has been the exclusive domain of MVPDs and premium television channel (PayTV) providers. But over the past decade, we’ve seen the emergence of new linear media distribution models like vMVPD and FAST.
Here’s a quick rundown of these four distribution models and the differences between them:
An MVPD is a television service provider that broadcasts linear content from multiple different television channels. Traditional broadcasters and cable television providers like Comcast (Xfinity) and Charter (Spectrum) are MVPDs, as are satellite television providers like AT&T (DirecTV) and Dish Network (Dish).
A vMVPD is an Over The Top (OTT) streaming service that delivers linear content from multiple different television channels. Popular vMVPD service providers include Hulu (Hulu Live), YouTube (YouTube TV) and Sling (Sling Blue + Sling Orange). Today’s vMVPD service providers offer packages of 50-100 channels at a lower price point than traditional cable television service.
PayTV is a category for premium broadcast television networks that aren’t included with MVPD packages, but can be purchased through MVPDs for an additional subscription fee. Showtime, Epix, and HBO are all examples of premium PayTV networks.
FAST is an acronym for Free Ad-supported Streaming TV. FAST service providers offer an OTT linear media experience that’s free for viewers, generating revenue from advertisements instead of subscription payments. FAST service providers include Paramount Streaming (Pluto TV), Roku (The Roku Channel) and Samsung (Samsung TV Plus).
The Current State of Licensing Revenue Management for Linear Media Distribution
Most content owners today depend on legacy tools and tedious manual processes to keep track of their linear distribution agreements and manage licensing revenue.
Distribution agreements are typically stored on a drive, usually hidden behind a VPN and within a labyrinth of file folders – though some content owners are using 3rd-party document management software to house and secure their agreements. When it comes to storing performance and financial data used for revenue forecasting, solutions range from high-performance MS Excel Spreadsheets, to custom-built, in-house applications and even some 3rd-party financial management solutions. Legacy solutions like these offer little in terms of automation or workflow optimization, leaving content owners to manage licensing revenue through complex, time-consuming, and error-prone manual processes. Below, we highlight some of the key challenges that content owners face when they depend on legacy tools and manual processes for licensing revenue management.
Licensing Revenue Management Challenges for Content Owners
For content owners dependent on legacy tools and systems, agreement compliance is a resource-intensive process that
involves manually inspecting contracts to validate distributor partner performance and reconcile payments. Agreement compliance is an essential activity, but manual verification becomes increasingly time-consuming as the number of distributors and complexity of agreements increases.
With the emergence of new linear media distribution models, revenue share calculations have become more sophisticated and complex than they were in the past. Revenue share and royalty calculations have become a prime target for automation, as they are becoming increasingly time-consuming and tedious to complete manually.
Finance, compliance, and content licensing teams need a single source of truth for content performance, distribution, and revenue data. But with data, agreements, and processes spread across multiple systems, teams are siloed and collaboration grinds to a halt.
Legacy solutions for licensing revenue management require content owners to manually aggregate, track, analyze, and reconcile non-standardized data from multiple distributors to accurately recognize revenue and report on content performance. This process is time-consuming and error-prone, making it difficult for content owners to accurately value their content and optimize licensing negotiations.
To perform data analytics and extract insights, content owners need clean and consistent data. With data coming from multiple different sources, obstacles like mixed ingest and storage standards, incomplete data sets, and outdated data can degrade the quality of analytical insights.
Software Helps Content Owners Streamline and Optimize Revenue Management
Content owners that license to linear platforms can overcome barriers to efficiency and adapt to the changing marketplace by adopting modern, purpose-built software solutions for licensing revenue management. While legacy tools and systems depend on manual processes that are time-consuming and prone to error, revenue management software empowers content owners with a single source of truth for distribution agreements and data, automated processes and workflows for mission-critical tasks like data normalization and performance validation, and AI-driven insights into content performance and distributor revenue. By replacing legacy tools with revenue management software, content owners can increase their revenue, optimize distribution and negotiation strategies, and improve cash flow while spending significantly less time on repetitive tasks.
Choosing the Right Solution for Licensing Revenue Management
When it comes to choosing the right software for licensing revenue management, content owners should focus their investigation on purpose-built platforms with comprehensive feature-sets that support the revenue management process.
Here’s what to look for:
Modern revenue management tools allow content owners to automate mission-critical workflows, cutting down on repetitive and resource-intensive manual tasks. Modern solutions can automate revenue share and royalty calculations, detect and alert on payment anomalies and manual errors, and automate the process of verifying revenue data.
Data normalization is an ongoing obstacle to quality analytics for content owners who store their licensing revenue data in Excel spreadsheets and rely on manual processes for data aggregation, cleaning, and standardization. Modern revenue management solutions can programmatically ingest licensing revenue data from diverse and disparate sources, then automatically normalize the data with no manual data entry. Streamlining data normalization saves time and increases the quality of the overall data ecosystem, resulting in higher quality insights that help content owners maximize revenue.
Your revenue management solution for linear media distribution should provide a centralized repository and single source of truth for storing and managing distribution agreements. Features like searchable contracts, logical mapping between agreements and distributors, renewal date tracking, and multivariate segmentation give content owners the ability to enforce distributor compliance, accurately recognize revenue, detect revenue leakage, and stay on top of negotiations..
When you’re validating performance reports and aggregating data by hand, reporting on the financial performance of your content portfolio can take days or weeks. Modern revenue management software shortens the reporting process to just minutes, giving users consistent access to clean data and the ability to sort and filter, generate common reports, or create dynamic visualizations at the touch of a button.
The data you receive from distribution partners is extremely valuable, and should be safeguarded appropriately to avoid unintentional exposure to the public. Look for a licensing revenue management solution with enterprise security features like data encryption, secure cloud-based storage, and granular role-based access controls (RBAC).
Maximize Revenue from Your Content with Revedia Linear
Symphony Media AI is the industry-leader in AI-driven software solutions for licensing revenue management. Our Revedia Linear platform combines workflow and process automation with AI-driven insights, giving content owners the ability to efficiently track content performance and manage revenue across traditional and emerging linear distribution platforms.
With Revedia, content owners can review and manage distributor audits, programmatically ingest data to accurately measure content revenue and performance, manage agreement compliance, and forecast future revenue more accurately than ever before.
Want to learn more?
Check out our Revedia Revenue Management solution brief for linear distributors and discover the innovative tool that’s changing how content owners manage revenue, analyze distributor data, and monetize their assets.