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By Dennis Kneale
Fifty. Billion. Dollars. That is how much extra revenue content companies could be collecting every year but leave on the table because of lapses in how they manage content rights. That is equal to the total annual revenue of Walt Disney Co. (#57 on the Fortune 500), and almost $10 billion a year more than the revenue of Time Warner and CBS combined.
This hidden fortune, elusive even to some of the biggest entertainment companies in the world, may be even larger than $50 billion a year, say the rights experts at RSG Media. They studied the global $600 billion-a-year market for common practices and missed opportunities and conservatively peg untapped revenue at up to 10% of the market, so let’s say 8% or so for good measure.
This digital pile of uncollected revenue comes to light as investors fret over the breakup of cable subscription packages and as channels have started offering Net-only services “over the top” without going through the local cable systems that had been their partners. They include HBO Now, an ESPN NBA feed, CNN, CBS, Univision, Showtime and CNBC, and more OTT entrants are imminent.
Internet disruption is coming soon to the TV business, and even the strongest media giants will need every trickle of revenue they can collect. Yet the industry gets only a grade of ‘B’ in rights-management, says Greg Fioravanti, a vice president at Discovery Communications. “Rights management on its face is pretty simple, it’s really about managing your inventory and reducing your risk, and doing it in the most effective way,” he says.
“These companies have archives of old content just collecting dust,” says David Hoffman, a vice president at RSG Media, which makes rights-tracking tools and is the sponsor of this series on the problems and promise of rights management. “We’re like treasure hunters, we help [content companies] mine the gold that’s hidden in the basement,” he says.
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