M+E Connections

Rights and Royalty Management: The Intersection of Data and Movie Success

By Richard Whittington, SVP, Media and Entertainment, SAP, and Amos Biegun, Global Head, Rights and Royalties, Vistex –

This is the first in a series of exclusive industry insights from SAP

From studio consolidation to growing variation of revenue streams, the film entertainment industry is far from the traditional beeline between theatrical releases and revenue. If studios can get a handle on their rights and royalty management practices now, they can take advantage of one of the most transformational opportunities in their recent history.

For an industry used to sure bets reaching blockbuster status, this past decade has turned any movie into a precarious investment. Big-name actors and actresses are no longer a guarantee for box office success – and neither are sequels and remakes of past box-office hits.

But don’t be fooled: the problem is not the scripts, directors, nor even the actors. Moviegoers are playing by an entirely different set of rules, where films serve as a revenue-generating platform for merchandise sales, episodic shows, and streaming access long after they leave theaters.

While this new reality is nowhere as straightforward as the early days of cinema, it’s still possible to accurately determine which movie investments will be profitable. The secret? Good data, underpinned by state-of-the-art analytics, such as machine learning and predictive models.

Redefining how movies make money with rights and royalty data

The movie business, for the most part, is built on the idea that today’s “big thing” needs to stay “the big thing” for as long as possible.

However, as media channels continue to grow in number, expand in reach, and diversify in access, this line of thinking is no longer relevant. Now, it’s a matter of finding films and timing their release in ways that will maximize their revenue potential outside of the theater-going experience.

This is where rights and royalty management technology come into play. Solutions, such as SAP S/4HANA for rights and royalty management by Vistex, offer a unique approach to managing intellectual property rights, contracts, royalties information, and copyright use – as well as storing transactional data.

And all this insight is available within a digital core providing a single source of real-time truth and turning insights into actions.

For example, if captured correctly, rights and royalty management data can help improve the confidence and speed of making decisions on movies during the greenlight and distribution process. Studio executives can gain the predictive insight they need to make the right decisions and optimize a movie’s profitability.

Setting the right foundation for a new era of growth 

For most traditional media companies, technology infrastructure has grown up around siloed n businesses. In contrast, new entrants are often architected as digital-first businesses with advanced analytics embedded.

Recently, one of our customers asked me, “How do I make this transformation when I have more than 100 years of legacy to manage?” While this is certainly a valid question, it’s clear that a foundation based on a digital core for managing the business is a key step. Direct-to-consumer (D2C) business models require more focus on the customer experience (CX). Businesses must market and test new offerings within very short time frames, and support a financial background that can react in days — not weeks, months, or even years.

For example, studios using SAP S/4HANA for rights and royalty management can maximize the return on their intellectual property, regardless of format or business unit. The digital framework, known as the Intelligent Enterprise, provides digitalized best practices for automating, validating, and facilitating the processes that make the difference between profitability and loss.

More importantly, information from every interaction and transaction is processed immediately to accurately analyze royalties and rights performance through digital capabilities such as:

–Predictive analytics and machine learning: Immediately identify white spaces in content asset licensing and determine how to monetize content assets as soon as possible.

— Enterprise-wide collaborative connectivity: Gain timely and accurate visibility to better manage rights availability and restrictions as well as royalty obligations.

— Real-time Big Data processing and analytics: Calculate potential revenue from each sales category, while considering usage fees, residuals, copyright terms, as well as guild rules and contracted agreements.

Transformations are not meant to be tranquil – and that certainly includes the movie industry. But with the right insights from your intelligent enterprise, including rights and royalties management data, you can rest assured that your studio is building a future of revenue and long-term growth.

Find out how SAP S4/HANA for rights and royalty management by Vistex can help your movie studio create franchises that turn moviegoers into lifelong fans and films into cultural phenomena.