Working as we all do in the 'soft' world of media, where our efforts are focused on the creation of stories, images and other forms of entertainment, and which do not result in the creation of 'hard' assets such as bricks and mortar, we should all be familiar with 'intellectual property' (IP).
IP rights capture the value of this creativity within organisations and are the bedrock of the entertainment and media industries. The successful exploitation of those assets depends not only on effective protection, but also crucially on an ability to realise their value by bringing to bear a wide combination of capabilities.
Given this background, it is worrying how many organisations feel that they are failing to exploit their IP rights. In the UK, a recent survey highlighted that less than half of the respondents were satisfied with their progress in this area. From my experience, the Asian story would be even worse. The entire industry is operating in an increasingly connected world, in which traditional distribution channels and organisational structures are breaking down. As a result, while opportunities for extracting value are still good, they are now emerging from a wide range of sources.
As well as creating new possibilities, this environment also throws up significant barriers to success. Piracy is the most obvious. Perhaps even more significantly in some markets, and in an industry context, is the fact that so many organisations from different sectors in the industry identify issues around their ability to work on an equitable basis with other parties - ranging from joint-venture partners to distributors to artists. A classic example of this was made very evident to me at the recent 3GSM Annual World Congress, where content owners were constantly critical of the telecoms sector over the latter's apparent failure to respect and understand the value of content in the context of the growing mobile content market. Perhaps it is as much the failure of the content owner to communicate effectively the message.
In that regard, another finding of the survey was the apparent absence of a close link between opportunities, barriers and skills. In short, many media companies are failing to invest in resources, either human or in terms of IT systems, to address the issues.
I thought it useful to summarise a 10-point checklist to assist media companies to better exploit value from their IP rights:
- Search for new revenue streams
- Work hard to extend the life cycle of the IP, so relaxing the pressure on the creation of new IP
- Avoid getting into marginal pricing with new distribution channels - it should not be regarded as 'jam' but instead as a core future revenue stream
- Negotiate on 'hard' information, not just gut instinct
- Learn the lessons from other sectors, eg the impact of new technology on music distribution has highlighted that value to the customer is intangible and, once lost, is hard to recover
- Look at new forms of valuing IP, eg.the use of multiples can add an external dimension to negotiations
- Align skills strategies with opportunities and barriers
- Develop your ability to build new relationships
- Incentivise people to make the right decisions
- Develop an IP culture within the organisation where the creation of IP is valued.
In conclusion, to survive and prosper, we have all got to get better at protecting and exploiting the IP that we create.