What is content licensing?
Content licensing is the distribution of media assets by content sellers to any third party, with conditions of how the assets may be used outlined in a legally-binding contract. Modern content licensing agreements have become increasingly complex with myriad distributors and revenue models.
Content licensing agreements
Content licensing partnerships between content sellers (licensors) and content distributors (licensees) are defined by content licensing agreements, with the terms of an agreement stipulating how, where, and how long the content can be distributed, as well as what compensation the distributor will receive. Types of digital content that can be licensed include movies or television shows, songs, audiobooks, podcasts, and more.
Compensation varies widely for licensing agreements for content intended for commercial use. Pricing depends on factors such as the quality of the content, viewer demand for the content, markets and platforms where it’s available, whether it’s exclusive or available for syndication by multiple distributors, and market conditions.
Content sellers who license their assets to linear media companies grant the distributor rights to offer the agreed-upon content to traditional broadcast, cable, and satellite TV subscribers in a certain region for a specified period of time. In return, the seller receives royalty fees, usually a monthly dollar amount for each of the distributor’s subscribers.
Content sellers who license their assets to OTT media companies leverage revenue strategies that are funded by monthly subscriptions, advertising, and one-time fees. SVOD service providers who are looking to acquire new media content for their streaming platforms commonly negotiate fixed license fee agreements (with an upfront fee for exclusive rights to distribute media assets in a specific region) with content sellers. AVOD providers and TVOD providers commonly negotiate revenue-sharing agreements (where the licensee pays the licensor a percentage share of revenue generated by the media assets on the licensee’s platform, sometimes with a guaranteed minimum) with content sellers.
The difference between content licensing and copyright
Content licensing is a specific type of copyright licensing. Copyright is the legal term defining who owns certain intellectual property (IP). Intellectual property law allows individuals to own the rights to monetize their own artistic works, including types of content such as movies and TV shows.
Content licensing agreements can be applied to copyrighted content assets to give permission for certain uses. Licensing agreements involve the copyright holder, which may be the copyright owner (generally the content creator), or a full-service licensing agency (which acts as a representative for the content seller). The copyright holder outlines conditions for usage of the intellectual property, including requirements for attribution, whether and how the content can be used in advertisements, social media channels, and more.
Is buying content the same as licensing content?
Buying content can refer to both content licensing and hiring in-house content creators, such as TV or film producers to create a show or movie. While content creators own the content they produce and the intellectual property rights associated with it, licensing content does not mean the licensee owns the content, simply that they have the right to re-use and distribute it.
The benefits of content licensing
Content licensing enables small media companies to compete with large organizations with deeper pockets. While content creation is costly, effective content curation – the process of finding, selecting, and licensing content that is relevant to a distributor’s audience – can optimize content value and maximize budgets. Content licensing leverages high-quality content that’s already available, saving time and money, generating traffic referrals from other platforms, and creating more touchpoints to engage specific viewers while also scaling content strategy to reach larger audience segments.
The challenges of content licensing
The reward for successful content licensing strategy is high. Still, the licensing ecosystem is increasingly complex, with complicated agreement terms, too much data to manage, and business tools that are out of date. Once initial content licensing negotiations are complete, teams are responsible for continuously tracking content performance, managing distributor compliance and payments, re-negotiating terms, and enforcing intellectual property rights and contractual obligations.
Due to the volume of content in circulation today, along with a growing number of streaming platforms and revenue models, standardized content licensing templates cannot account for increasingly complicated agreement terms. At the same time, manual processes historically used to manage content licenses have become slow and inefficient, resulting in overwhelming workloads that are prone to human error. To optimize media assets, content sellers and distributors are turning to data-driven software solutions to handle licensing challenges so they can focus on finding and negotiating the best deals.
Manage content licensing with Revedia
SymphonyAI Media provides AI-driven data intelligence that helps media and entertainment companies manage content licensing agreements and maximize revenue from their video assets. Content licensing and distribution teams use our Revedia platform to automate content licensing workflows, accurately measure content revenue and performance, audit distributor compliance, and ultimately negotiate smarter licensing deals.