Minding the Idea Factory: Intellectual Property in the Digital Age

Continued

Once content is ready for market, enterprises must have a detailed understanding of the business rights attaching to each content asset, the ability to manage the royalties arising from each use of the content, and a mastery of the ins and outs of distributed accounting. And in the new digital environment, business rights and royalty management has grown ever more complex as content and service providers vie for the opportunity to offer the right content, to the right customer, at the right time, and over an increasing array of platforms such as IPTV and mobile TV.

This near-gymnastic phase of IP asset management introduces a whole new level of complexity, involving royalty and distribution agreements, collection of revenues and distribution of royalties, and licensing of content in whole or in part—a veritable smorgasbord of choices to make, agreements to be respected, and possibilities to exploit. All with direct impact on the bottom line—that is, who owes you and whom you must pay.

Intellectually Challenged

These details are coming to define IP management for the media-and-entertainment industry; a recent Gartner report points to "the need for workflow and asset management systems that can cope with the rapid deployment of asset distribution opportunities yet retain the integrity and ownership/rights of the asset."

However, Lally sees organizations with significant intellectual property holdings falling short of this goal. "I could tell you horror stories," he says. "There are many, many businesses that have no idea what IP assets they've got or what they can do with them and no way to track how well their IP is currently performing, much less predict future performance."

Lally uses a hypothetical business case from the tangible world to make his point. It's unimaginable that a CEO of a major oil concern could run the company without an accurate accounting of the wells operated by the enterprise or make critical business decisions without the capacity to chart the profitability of a well over time or the revenue generated by oil fields leased to subcontractors. And without proof of ownership of the property being explored, the company would collapse. As outrageous as this sounds, this is the kind of situation many IP-dependent enterprises face today.

Intellectual Property Management 101

A basic equation defines intellectual property for media and entertainment: content + rights = assets. Although this may look simple, exploiting the equation to its fullest requires an astoundingly complex level of tracking, integration, and reporting: business rights management. For the media-and-entertainment industry in particular, maximizing IP profitability means creating an end-to-end content value chain for each content asset—from the birth of an idea to content creation and distribution; to management of rights and royalties; and to full integration with accounts receivable, accounts payable, and the general ledger. Add to that the need for the kind of reporting, auditing, and business intelligence that is central to pursuing agile IP strategies, and you can see why the software industry has had a difficult time crafting an enterprise-class solution.