With THE ARTS+, Frankfurter Buchmesse launched a fair and networking hub for the “Cultural Industry 4.0” last year, offering the first marketplace for all cultural intellectual property and a showroom for the shapers of tomorrow’s cultural and creative scene. In a workshop called “The Future of IP Exploitation: Surviving the Digital Jungle”, Rob Ambrose, Head of Strategy and Business development for FADEL discussed how new technology is fundamentally changing the way creative industries manage content and reach audiences. The ideas and concepts debated by a group of creatives, technologists as well as publishing, copyright and legal experts form the basis of a white paper that is now available for free download. Jenny Kühne, Manager Rights & Licensing at Frankfurter Buchmesse, talked to Rob Ambrose about challenges, growth potential and how IP-Holders can future proof their businesses.

Rob Rambrose © FADEL

Frankfurter Buchmesse: Last year at THE ARTS+, you led a workshop called “The Future of IP Exploitation: Surviving the Digital Jungle.” In your opinion, where do you see the most significant challenges in the next five years?

The most significant challenge — and opportunity — is the rise of platforms connecting content creators directly to consumers, often bypassing traditional gatekeepers like publishers and broadcasters. There are platforms for video (YouTube of course), self-publishing (Amazon), long-form magazine writing (Medium.com), short-form fiction (Wattpad), music (Bandcamp), stock photography and graphics, even professional training (LinkedIn’s Lynda.com).

For creators, these platforms offer new markets, new sources of income, and perhaps more democratic access to consumers for those who might not otherwise get signed. But it means creators need to manage their own funding (no advances) and need to be business and legally-savvy to understand what rights they’re signing away. Many of the attendees at our workshop welcomed the chance to reach a bigger audience — but had significant, and valid, concerns that one gatekeeper is simply being supplanted by another. And with many platforms, that new gatekeeper is a technology company, not really connected with the creative process.

New platforms can provide access to great data about how content is being used and consumed. A challenge for many content creators is that they must now also become good at data analysis — interpreting lots of raw data to know how best to reach a particular audience, and to understand what they want to consume, and how.

Changing business models are another great challenge — in particular the extent to which different creative industries move from a “buying” model to a “renting” subscription model. We’ve already seen this shift in music (Spotify) and TV and film content (Netflix). Authors and artists may be next to experience this change — and publishers need to be ready with new business models that replace high-value sales with a steady stream of micro-transactions.

Frankfurter Buchmesse: Where do you see the greatest potential for growth?

The huge benefit of platforms and subscription models is the removal of traditional shelf-space limitations (retail space, TV station airtime), opening up the market to an unlimited volume of content. Anything can be made available to consumers. This will undoubtedly grow the market — for example the music industry is finally seeing a return to revenue growth as a result of streaming income. But subscription platforms can spread that revenue more thinly among artists, and possibly more unevenly, so not everyone may benefit.

Another opportunity from digital platforms is the chance to exploit IP in new formats and new products — expanding the overall market. While Silicon-Valley technology companies are great at inventing new consumer-facing content products, the one thing they don’t create is the content itself. The owners of the best content will find their IP increasingly sought after — with some potential for growing demand raising the overall value of the content market. I say “some” potential, because in TV content, production companies aren’t yet seeing an uptick in prices because of platforms like Netflix and Amazon Prime. Rather, the primary content commissioners (TV networks) are often paying less, because they know the secondary market of streaming platforms will make up the difference.

Frankfurter Buchmesse: What does this actually mean for IP holders?

It means enabling new ways of licensing content. Moving away from traditional models of paying an advance and earning that out with sales-volume-based royalties. Moving to compensation based on other measures. For example content creators may be paid not just on the number of sales, streams or downloads — but on the effectiveness of their content and how well it’s received and rated by users.

One thing that’s certain: content creators can no longer afford “just” to be artistic. Those who are exploiting new markets and platforms must learn to control their own mini licensing enterprise — managing business, legal, financial and analytical aspects as well as the creative process.

Frankfurter Buchmesse: Do you have any tips for them? How can their future-proof their businesses?

Most important of all is to manage IP rights and licensing in the most flexible way possible — you never know what’s around the corner. IP holders should be ready to license their content in emerging niches to create new revenue streams. No-one can be certain what the most important new platforms will be — though technologies like artificial intelligence (AI) and voice control are gaining momentum. These create new ways for consumers to use content, and new platform owners hungry for great content.

A flexible approach to IP licensing ensures content owners can access these new sources of income without cannibalizing their existing markets. Authors, artists and other content creators should take control of their IP and actively manage how it’s exploited. For example, instead of handing over a big bunch of unspecified “sub rights” to a publisher, an author should think about how best to slice and dice those rights. The TV distribution business, for example, is very skilled at this process.

Frankfurter Buchmesse: Analysts predict that virtual reality will start to go mainstream in the next few years. According to market research firm SuperData’s December analysis, by 2020, global revenue from VR ‘media entertainment’ content will total $2.8 billion. It’s this category of ‘media entertainment’ where publishers can get in on the action, in a major way. How should IP holders prepare for this development?

It will depend entirely on consumer uptake — and that depends on having the right devices, the right experiences, and the right content. VR is most likely to impact specific sectors — like gaming, some sports, and several commercial applications like real estate. Content IP owners in these segments should certainly be preparing — especially as new VR platforms are appearing every day and want differentiated content.

For publishers, it really depends on the content. It’s hard to see much of an impact in fiction. But you can imagine some compelling scientific and educational VR platforms, so Sci-Edu publishers should include VR into their content deals today — and authors and artists should ensure their own deals give them a fair slice if and when VR becomes a huge hit.

Frankfurter Buchmesse: Rob, thank you for your time.

Rob Ambrose (@rambrose) moderated the workshop at THE ARTS+ and has written this white paper based on the discussion. Rob is a consultant, industry analyst, journalist and technologist with 30 years’ hands-on experience in the media and entertainment business. He helps media companies and vendors keep pace with the fast-changing digital content market and consumer demands by implementing effective technology solutions and transforming business operations.

Rob has expert knowledge of media business systems. He leads strategy and business development for FADEL, a global provider of enterprise-class intellectual property rights and royalty management software. He’s also focused on the transformative impact of new technologies like AI and voice control, VR and cloud on the media technology landscape.

This interview was originally published in the Frankfurter Buchmesse newsletter.

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Jenny Küehne, Manager Rights & Licensing at Frankfurter Buchmesse and International Sales Manager at IPR.