Just What Is 'Content Licensing' ?

Guess what? Nobody knows exactly what the hell 'content licensing' is.

Like many things in the new, much uncharted, digital publishing universe ... the general concept is still in flux; but, getting it's focus little by little.

Content licensing implies monetizing written content in some way. And this is important for publishers to get right (after all it is money!). Exactly what is it, what and how to charge for it, how to police the contracted content for abuse, etc., etc., etc.

This insight from Stefanie Botelho in the Login section of FOLIO magazine:

Content Licensing: Making It Work for You

Publishers on creating an additional revenue stream, managing pricing and more

The term “content licensing” is an ambiguous one, especially among publishers. Some consider reprints and e-prints to be a full-fledged content licensing operation; while others leasing out logos and awards for third-party use count it as their content licensing service. Still others have moved custom publishing under the umbrella term of “content licensing”, with syndication often finding itself in this category as well.

Brian Kolb, vice president of Wright’s Media (which works with publishers like Forbes, LAPTOP Magazine and FOLIO: on content licensing deals) says, “We started doing this five years ago, which was the paradigm shift where many of the advertisers were gaining the content they wanted to use for free, like accolades, pull quotes, etc. In order to make up for the lost revenue from e-prints and reprints, we had publishers understand that shift and monetize the access they were giving away for free.”

For publishers who choose to monetize their property beyond advertising and subscriptions, vetting appropriate partners, managing the business and monitoring client contracts can equate to a full-time job. For what can seem like an overwhelming task, deciding which content to barter with may be the first step for companies considering a move into the content licensing business.

Offering the Best, Partnering with the Best

At Northstar Travel Media (NTM), VP of business development and licensing Sheila Rice says the publisher’s wealth of data drives its content licensing business. NTM’s central database includes 70,000 geographic places, 160,000 hotels, 54,000 hotel ratings, 900 convention centers, 30 million news alerts sent annually and a plethora of additional data (including visitor bureaus, cruise lines, ships and more).

“With the raw hotel data, I license it for public view and public use on large travel sites or OTA’s. My partners have the ability to choose the look and feel of how they present their data on their website because they have it in a raw format,” says Rice.

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Solving Every Publishers Paywall Problem

This post deals with monetizing publishers' online content and a super simple paywall system that allows this to happen quickly with ease!

From my Publishing/Writing: Insights, News, Intrigue Blog:

How about a super simple program that allows you to set up a flexible content monetizer (paywall) that allows readers to pay for one article for an hour or access archieves for a week or gain access to the entire site for a month or year!

That super simple program is Tiny Pass (A real Mighty Mouse!)

“For example, the Huffington Post could use Tiny Pass to make users pay $.05 to be able to read an article by Arianna Huffington for an hour or $.25 to read her entire archives for a week. Or it could charge $5 to gain access to the entire site for one month.”

More details at the Business Insider by Noah Davis:

This Startup Just Solved Every Publication’s Paywall Problem — And It Is Using The Huffington Post As Proof

Suppose you are a web publisher who wants to institute a pay wall. You could spend millions on developing one like The New York Times.Or you could call Tiny Pass.

The latest project from Hudson Media Ventures is a micropayment platform that allows publishers to indicate the content they want to charge users for, how much they want to charge, and how long the access will last. It then delivers said content after users simply and quickly pay for the privilege.

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What Is The Biggest Opportunity and Threat To Publishers?

And the answer is, according to Jason Fell of FOLIO magazine: new technology!

Yes, all the new e-readers and iPads, etc, have opened up all kinds of new opportunities and venues for publishers...but, like roses, they come with some thorns!

From Jason Fell today:

“I’m far more worried about 500 million people on Facebook than I am about 2 million people watching Fox.”

That’s what CNN U.S. president Jonathan Klein said Wednesday during the opening keynote of Bloomberg BusinessWeek’s two-day Media Summit, held here for the seventh year. An overarching topic of a number of the sessions was about the confluence of traditional publishing/advertising/distribution with emerging technologies. In his discussion with BusinessWeek editor Josh Tyrangiel, Klein, who led CNN to its most profitable year in 2009, said the company’s growth areas are online (including CNNMoney.com), mobile, U.S. cable, and said it is placing a “greater emphasis” in online video.

But while evolving technologies are offering CNN some of its biggest opportunities, Klein said they also are facilitating its biggest threats. “The competition I’m really afraid of are social networking sites, not only because of the sheer numbers of people who engage in Facebooking and Tweeting,” he said. “It used to be that Internet prime time was daytime, but now you come home and you engage in the world of Facebook, and so that’s just an alternative that threatens to pull people away from us. On top of that, if you think about it, the people you’re friends with on Facebook or the people you follow on Twitter are trusted sources of information.”

The conversation surrounding the merging of content with new technologies, and the inherent difficulties associated with it, continued during a morning workshop. One panelist, Spin magazine founder Bob Guccione Jr., said that while “print is not dead,” the wave of new tech coupled with the economic fallout has weeded out the industry’s most “inferior and inadequate” publications. “There are a lot of boring, generic, afraid, unimaginative, unopinionated magazines and the market is telling us that we don’t need them,” he said. “And e-reader devices have not yet scratched the surface of ‘saving print.’ They’re not the future of magazines. Magazines are the future of magazines. The people who make them need to find better new ways to captivate their audiences, or they will fail.”

But one way some publishers are hoping to “captivate” audiences is by producing content for the new crop of e-reader devices. Bob Nell, director of business development of Sony’s digital reading business division, said a lot of the necessary details, like revenue sharing models and content control, are still being hashed out. “Should the publisher control the iterations of their magazine across different platforms and control pricing, etc.? That’s all playing out,” he said. “Generally, I think the publishers should manage all of that.”

The Advertising vs. Pay Wall Conundrum

What would a conversation about the collision of traditional publishing and new technologies be without talk about ways to monetize it? Panelists kicked off an afternoon workshop called “Models for Change: Experimenting with Subscriptions, Pay Walls, Display and Search Advertising, Syndication, Live Events and Brand Extension Opportunities,” by dredging up Wired editor Chris Anderson’s well-known “freemium” concept—offering basic content/services online for free while charging a fee for premium features. “Unless the price of creating content becomes free, just because content is online doesn’t mean it should be free,” argued CNNMoney.com senior vice president of sales Liberty Carras. “When value becomes established, content is something that should be charged for.”

While developing multiple content platforms and diversifying revenue streams is a top priority for publishers like Conde Nast, Julie Michalowski, the company’s vice president of business development for its consumer marketing division, said the publisher is not considering erecting any pay walls. “What we want to continue to do is to build digital relationships so that we can have a multi-channel relationship with our consumers that includes print and includes other ways that they want to access us,” Michalowski said. The trick, she said, is for publishers to find a balance between “discoverability and profitability.”

Marc Ruxin, executive vice president and chief innovation officer at McCann WorldGroup San Francisco, said publishers and advertisers need to develop new ways to make online advertising effective for both parties. One example he noted was allowing the consumer to determine the types of ads they want to see on the sites they frequent.

“Content has been subsidized by advertising since day one, but display advertising doesn’t cut it now,” he said. “New models need to emerge to continue to support content creation.”

Getting Paid for Digital Content--Where Do We Go From Here?

Trying to figure the optimum pricing model for digital content is just in the infancy phase. Matt Kinsman of FOLIO magazine writes this:

Investors want to see paid content models while publishers express their doubts, and some dotcoms say the advertising model isn’t done yet—provided publishers can tap into marketing and promotion budgets.

Future revenue models for publishers dominated the discussion today at the DeSilva + Phillips Dealmakers Summit 2010, where publishers and investors debated where the revenue growth will come from.

Managing directors of two of the largest investment firms said content-driven businesses—including magazines—remain attractive opportunities, but monetizing that content is a priority.

“We believe in content but we’re struggling to monetize it,” said Jeff Horing, managing director of Insight Venture Partners. “It’s not really an issue for the next five years but it could be a problem five years from now when we try to sell the business and project what it will be worth to a buyer.”

Content that can’t be had elsewhere—either through original reporting or unique ways of aggregating—are attractive investments, said Richard Zannino, managing director of CCMP Capital Advisors (which owns Hanley Wood).

And despite the contraction among both industries, magazines remain a more attractive opportunity than newspapers. “We would not invest in newspapers,” said Zannino. “With magazines, maybe. It depends on the market. Newspapers have a fundamental issue where they don’t deliver as much value as their alternatives. With magazines, that fundamental issue doesn’t exist as long as they’re targeted to an attractive niche market.”

Others said magazines are essential within their broader organization. Washington D.C. insider Politico is a “reverse publisher” in which much of the magazine is created from Web content. “We see about a 50/50 split in print and online revenue,” said editor-in-chief John Harris. “It’s kind of a parlor game to say, ‘well if we have print it’s more expensive.’ Yes we have more costs but it also lets us have more reporters, which helps us draw an attractive audience for advertisers. I’m not fixated on any platform print or online. One of our most successful products is Mike Allen’s Daily Playbook—nobody reads it on the Web site, they read it on e-mail.”

Bloomberg chief content officer Norman Pearlstine explained what BusinessWeek offers. “Think of BusinessWeek as part of the whole Bloomberg ecosystem,” he said. “It starts with a terminal where people pay $20,000 per year, which offers access to news and data. BusinessWeek offers access to the executive suite they don’t get with just the terminal.”

Pay Walls a Non-Starter?

Harris, Pearlstine and Huffington Post CEO Eric Hippeau expressed their doubts about the viability of pay walls.

“I think it’s hard to make it work,” said Pearlstine. “In our experience, you can charge a lot of money for specialized information for an audience with a need for it—it doesn’t have to be business and finance. But for more general interest, the value just isn’t there.”

Politico won’t charge for the content it currently produces, said Harris. “We’re successful with our ad model and putting stuff behind a pay wall would diminish that,” he added. “Our editorial model is about the conversation of the day, and a pay wall runs against that.”

Hippeau said that while the Wall Street Journal was an example of a successful paid model with $100 million in revenue a few years ago, you haven’t heard much about it since. “The history of the pay wall is not a good one,” he added. “With magazines, you promise your advertisers a rate base and then spend a lot of money to acquire that rate base and keep it up. It’s hard to do.”

Making Online Advertising Work

While nearly all conference participants seemed to agree that banner and online display advertising don’t hold much promise, some said it could work if it’s part of a more in-depth package.

“I would be scared to invest in creating content if the only way to get your money back is banner ads,” said Matthew Bromberg, CEO of online startup Major League Gaming, which has a model combining subscriptions and advertising. “However, our players pay to play and we do multi-year sponsorships and branded content.”

Others see online publishing evolving much like traditional publishing. “I think the online publishing model will follow the magazine model by targeting attractive niches” said Tyler Goldman, CEO of BuzzMedia. “Right now, the Internet is still so immature that everything is driven by the product. But ultimately, users don’t want to be their own programmers. People are still going to the same three or four sites every day.”

But that means creating more comprehensive marketing programs. “We can’t think of just creating content for consumers and slapping an ad on it,” said Goldman, who added that marketers need to connect with the market, rather than just pitch to it. “There isn’t really an issue with demarcation between content and advertising,” he said. “It’s not about advertorials; it’s about creating programs around brand message. The publisher who can figure out both sides will have a lot of success.”

According to Bromberg, publishers shouldn’t be afraid to ask more of marketers. “People don’t require enough from buyers,” he said. “An advertiser will come in and say, ‘We want to move the needle.’ OK, to do that, you need to be on our site for a year and build a connection with our audience. Then we can do something.”

Hippeau said Huffington Post is finding opportunity in a merger between classic CPM-based advertising and social media, including a program around the upcoming Olympics where marketers like HBC are sponsoring blogs and Twitter feeds for a fixed fee. “This isn’t advertising but promotion and marketing,” he said. “The money being spent on Facebook is not coming from advertising budgets.”

A Content Commerce/Hybrid?

Others are looking to a combination of commerce and content. “Online content monetization through traditional advertising is tough but content monetization with e-commerce is very interesting,” said Horing. “Today, if I have new content for moms, it’s easier to white brand a store with that than that trying to make money off something like Procter & Gamble advertising—there’s too many middleman trying to get margin on that.”

“I think the traditional media focus should be on commerce,” Pearlstine agreed. “There are a lot of eyeballs and uniques and we’re seeing it in Germany with publishers like Springer.”