1. SPECIAL REPORT Adapt to the digital world The right perspective on digital content

2. Adapt to the digital world The right perspective on digital content Digital Natives: Predicting the Future of TME The Internet has irrevocably changed the landscape for digital rights management. With a rapidly growing market, telecom, media and entertainment (TME) industry players have to re-evaluate their business models to maximize opportunities for tapping new revenue streams. Find out how Capgemini can transform your management of digital rights and intellectual property to help you take advantage of the latest trends in acquiring, packaging and consuming digital media content. Detecting early indicators of change is a crucial skill for TME companies looking to stay successful and relevant. Younger generations, more technology-savvy than ever, hold the key for companies to predict where the market is heading. The World beyond Digital Rights Management Rapid advances in digital technology mean digitized content is readily available to most people. What does this mean for content owners and commercial stakeholders in terms of protecting intellectual property and commercial rights? In this book, Capgemini looks at the technology and architecture behind digital rights management that companies can use to better manage their approach. Best Practice in Intellectual Property Management Weighed down with large content assets and legacy solutions, many large and established content providers lack the flexibility to seize market opportunities. In particular, sub-optimal rights management is emerging as one of the major issues hindering them from further commercial success. Capgemini can show TME industry players how to capitalize on intellectual property management trends. The Intelligent Way to Manage Your Intellectual Property Many media organizations have difficulty coming to terms with the challenge of defining, implementing and sustaining an effective IP solution. Capgemini is working with industry players to enable them to turn intellectual property into valuable assets.

3. BEST PRACTICE IN INTELLECTUAL PROPERTY MANAGEMENT: trends and analysis 01

4. Grasping the opportunity in a changing market Successful businesses understand that proliferation and the effects of new and radical market change presents both risk uncertain shifts in user demand on their and opportunity. For those who can align business models and IP management. The themselves to new market demand the lack of certainty has impeded investment in rewards can be huge; for those that cant some companies, causing them to delay the effect can be catastrophic. During times spending until a clearer picture of the future of radical change the hallmarks of success market and its demands have emerged. are the ability to respond quickly and Others have tried to cover all the possible effectively, combined with the willingness to outcomes, and have seen both their costs experiment. These characteristics tend not and the complexity of their supporting to be associated with big companies, infrastructure increase, due to their tactical although large companies possess other investment strategies. The number one issue with attributes that give them advantages over regard to rights management is their smaller rivals not least the advantages The good news is that industry consensus clarity clarity as to what rights of scale. The challenge is therefore to act is now emerging about future business weve acquired and of the big, but to think small. models and the technical requirements of current inventory of rights. supporting them. Best practice, gained from John MacGuire, Head of Corporate 2008 sees the media and entertainment considerable hard-won experience, is now Systems, BBC Worldwide industry midway through such a period of available to guide companies on their journey radical change, as technological innovation and help maximise the effectiveness of their fundamentally alters the way in which technology investment. Whats more, IP content is consumed by customers and management has been identified as such a presents a wide range of new distribution pivotal issue for commercial success that it channels. now has board-level attention and support. The race to tap the huge potential revenue Change is not a new phenomenon in this streams on offer has started in earnest. industry. It has already weathered much technologically-stimulated transformation If you are considering how to improve your from the advent of printing to the birth of IP management, this report provides vital television, and everything in between. insight including: Todays major content players have survived Why IP management is vital to success in and prospered amidst the relentless the digital market highlighting the issues introduction of new types of media, new that all companies should be aware of. distribution channels and new technologies, Key trends in IP management analysing and have successfully responded to huge the most pressing priorities and concerns shifts in consumer demand. of content providers. The golden rules of successful IP Now, however, they face arguably their management revealing our top tips to biggest challenge and opportunity to date successfully exploit IP in the digital age, the transition to the digital market. And with gained from the combined experience of large content providers forecasting a thought leaders at Capgemini and SAP. significant uplift in revenues from digital Next steps a guide to how you can find content , 2008 may very well turn out to be out more about IP management in the a landmark year in this transition. digital age and participate in future networking opportunities and high-level No-one can afford to be complacent in this collaborative research. 1For example: Disneys CEO Robert Iger has challenging and fluid market. A lucky few forecast that his company will see digital revenues grow from $750 million to over are quietly confident. Most companies, $1 billion in 2008. Beth Comstock NBC however, have varying degrees of concern Universals president of Integrated Media stated in January 2008 that she expects her company about how they will cope with the inevitability to pass $1 billion in digital revenue by the end of change, the consequences of platform of the year. 02

5. Why rights management is key to business success in the digital age The effects of a major content revolution are now being felt across the media and entertainment business. Technology has lowered the barriers to market, fuelling a boom in user-generated content (UGC) and enabling content creators to experiment with direct-to-market strategies. At the same time technology has created new opportunities for content, as well as a proliferation of new routes to market and a large range of innovative content applications. Promising new opportunities are being presented by social media and user- generated content, mobile rich media and digital advertising amongst others. Media and entertainment companies are positioning themselves to exploit the opportunity by aggressively pursuing a multi-platform distribution model for their content. However, to be successful this needs to be accompanied by a sophisticated and scalable solution to manage IP rights and As user demand builds, however, further A key priority for us is achieving track their exploitation across multiple delay in investing in adequate IP management metadata consistency. platforms. solutions will seriously impede companies ability to compete in new markets. This Pam Williams, Picture Workflow and is because the business is currently Metadata Manager, News International As technology lowers the barriers to market entry, agile and disruptive players are fragmented and manually-intensive, and appearing in both traditional and new legacy IP management solutions are markets. Hamstrung by the sheer weight of struggling to scale or extend their scope to their content assets and legacy solutions, cover new niches. Legacy systems were many large, established content providers designed for a different business paradigm are struggling to get to market quickly and when media and entertainment companies to fully exploit the opportunities presented. could exert considerable control over the Sub-optimal rights management is a major way content was formatted, distributed and headache for them and plays such an delivered. Moreover, the proliferation of important role in future commercial success multiple vertical solutions, and the use of that it is now high on the boardroom agenda. outdated technology (such as old, custom- built solutions, spreadsheets and databases), Over the last few years two main investment means that companies lack an integrated strategies have been employed by enterprise-wide view of their IP rights to established media and entertainment support their multi-channel distribution companies. Some have employed a wait- strategies. Failure to exert adequate control and-see approach, choosing to delay large- over rights management risks scale investment until there is more certainty disintermediation or companies falling around business models and channels to behind more agile competitors. market. Others have taken an opportunistic and tactical route to market, employing Figure 1 summarises the risks of getting IP siloed or bespoke solutions and management wrong, as well as the benefits experimenting with emerging opportunities. of getting it right. 03

6. Why rights management is key to business success in the digital age (cont.) Figure 1 Risks and opportunities from IP management Risks from poor IP management Opportunities and benefits from good IP management Opportunity cost high failure to fully exploit assets Increased visibility and clarity supports full exploitation of commercial potential Risk of disintermediation Increases value of proposition to content creators and other partners enabled by powerful online analytical capabilities Slower time to market Faster time to market Higher risk of human error Lower risk of human error technology supports human effort Cost of legacy can be high Opportunity to lower cost of legacy solutions Cost of manual effort high Opportunity to minimise human effort and place it where it adds most value Inability to scale Greatly enhanced scalability able to handle more assets, more finely cut rights and greater scope Inability to handle major new content types such as UGC, Flexible and agile solution can handle both emerging and future long-tail services and emerging channels content types and channels, and support product innovation Cost of content high due to increased due diligence costs Cost of content is lowered because rights information is clear and visible, reducing the cost of rights clearance Errors in royalty payment result in loss of revenue and loss Accurate, timely royalty payments attract the best content partners of partners and drive growth Flawed financial information breaches legal requirements such as Accurate, current and accessible data compliance with Sarbanes-Oxley Act supports compliance The risk of disintermediation is particularly which many companies currently struggle to acute. It has never been so easy for content produce due to siloed architectures and creators to go direct to market2. The unique manual steps in their rights and royalty selling point of large entertainment and management processes. media companies is that they offer the possibility of maximising the exploitation of Poor royalty management also risks content while minimising the effort to companies falling foul of financial reporting content creators. Being able to produce requirements such as the USs Sarbanes- valuable and up-to-date insight into content Oxley Act. The consequences of non- usage and royalty status, combined with compliance with Sarbanes-Oxley fall on an effective royalty management processes individual named director, increasing the that ensure content creators get paid in a pressure for companies to resolve their timely and accurate manner, are a valuable problems. Other legal risks resulting from part of a the market proposition of such poor IP management include copyright companies. The ability to do so means they infringement and unexercised options within are likely to attract and retain the best agreements. 22007 saw high-profile examples of content creators going directly to market. For example, content partners, thereby maximising their Radiohead released its seventh album In own commercial potential. Accurate Standardising on a modern IP management Rainbows as a digital download, allowing customer to choose how much they paid for it. payments, as well as the insightful analysis solution that is integrated with companies Although the band's management has not yielded by powerful online analytical tools, financial solutions can however, deliver the released official sales figures, their lead singer Thom Yorke has stated that the band's profits rely on the availability of comprehensive, robust, scalable and efficient solution that from the digital download of In Rainbows was accurate and up-to-date transactional data, will drive revenue growth in the digital age. more than from all their other albums combined. 04

7. Current trends in rights management Capgemini and SAP have undertaken a programme of research into the current and future status of IP management in large media and entertainment companies in the UK. This includes hosting two high-level events on rights management and commissioning primary research on the challenges faced by media, entertainment and telecommunications companies. From our direct experience of working with a range of media and entertainment companies supported by the findings from our research programme, it is clear that a consensus is emerging amongst thought leaders in rights management concerning common challenges and how these can be addressed. Content companies perceive The biggest barriers to exploiting new 2008 to be a pivotal year during which opportunities in the digital marketplace critical decisions will be made concerning IP were cited as internal silos (67%) and lack management. In this section we present key of metadata standardisation (60%). findings from our research outlining the Master data management of rights and primary concerns and investment priorities content was identified as the most critical of a representative range of large UK area for improvement by 67% of content providers. respondents, with 60% saying that they expected substantial spending on this Key concerns area in 2008. Our research programme suggests that while companies believe the digital market Implications and key initiatives presents considerable new opportunities, The role of metadata is seen as particularly execution challenges are impeding their important. Participants in our IP management ability to fully exploit it. events highlighted the problems with 93% do not think their current method of capturing metadata. The consensus was rights management is sufficient to support that it was vital to capture metadata as early new and evolving business models. as possible in the content lifecycle, but Scalability issues are high on the agenda, participants expressed concern that in particular the ability to manage investment made in production is not tied to increasing numbers of contractual accuracy of rights information about the relationships 87% highlighted this as a content produced. The group acknowledged key concern. that process changes were required and 87% are concerned that they may not be suggested that production teams should be compliant regarding the misuse of their incentivised to ensure metadata is accurately content, of which 67% are concerned captured at the point of production. To be and 20% are very concerned. successful this requires training and 73% of respondents do not have a rights changes to roles and responsibilities to management system in place for user- ensure that production staff understand the generated content; although 70% of importance of metadata capture to the those that dont have one in place organisation as a whole, and the role this consider user-generated content within plays in the commercial exploitation of their rights management strategy. content. 05

8. Current trends in rights management (cont.) Rights are not future-proofed there will continue to be the need to retrospectively add in new models of exploitation. Mike Slemmings, Evolve Program Director, EMI Music Participants agreed on the vital role of Respondents to our research programme technology in successful IP management, also told us about their key investment but highlighted the vulnerability created initiatives. by poorly keyed in rights data. It was 67% say that significant IT budget will be suggested that the type of staff typically spent on content distribution; while 60% used to capture rights data the youngest, will be spending significant sums on least experienced, or temporary staff was master data management. fundamental in causing inaccuracy. This Of those concerned about managing issue is particularly relevant in the context of increasing numbers of contractual solution consolidation, as currently there is relationships, 69% say they will be significant keying in of data from legacy changing the systems they use to handle systems. rights or content, and 46% will be changing their processes and structure. Many companies have realised that the 31% will be building relationship with downside to efficiency initiatives designed to other companies to help manage the drive down the cost of capturing data is that load. the accuracy of the data captured declines. In the long run this leads to a range of problems, including higher costs resulting from the requirement to find and fix inaccuracies. Human error can also result in overpayment of royalties and non-compliance with legal requirements. Given the vital nature of rights data, companies are therefore well advised to consider the balance of efficiency versus accuracy when designing their rights management processes, and where possible to use process and technology to support accurate data capture and governance. 06

9. The golden rules of successful rights management in the digital environment Capgemini and SAP have unrivalled expertise users will adopt rather than undermine your in designing and implementing processes IP management solution. Maximising end and solutions for state of the art IP user buy-in involves ensuring that end users management. While there is no single recipe are consulted during interface design and for success, some key pieces of advice hold that the solution reflects the way in which true across a wide range of projects. they work. Likewise automating a poor business process will simply result in a faster Embrace change but no more effective process. Before The media and entertainment industry is implementing a new solution it is wise to surfing a wave of change that isnt going to consider whether your current business run out of momentum any time soon. processes could be tweaked or overhauled Accepting the inevitability of change means to deliver better results. This can be achieved that you can plan for the consequences by by performing a rights management health building flexibility into your IT solutions and check that incorporates both processes and Ensuring that rights are agility into your business processes. solutions and produces a roadmap for improvement. expressed in a consistent and Automation is essential to lower costs unambiguous manner in all and achieve scalability Avoid the big bang, try managed contracts is of vital importance. Automation is vital to cope with the evolution Mike Slemmings, Evolve Program increasing numbers of assets that need to It may be tempting to attempt a big bang Director, EMI Music be managed, as well as the increasing solution to your problems rather than risk granularity and scope of associated IP rights, falling behind your competitors. The good and the sheer volume of transactions. news is that its no longer necessary to Automation offers the potential to increase an employ such a high-risk, high-cost strategy. organisations ability to fully exploit the rights Flexible IP management solutions can it holds, while decreasing the cost of accommodate future changes and additions managing them and reducing the effects of for example, allowing you to add or change human error. However, it is important to workflows enabling you to start with the recognise that human effort is still needed at area(s) that most urgently need to change certain vital points in the process. Rights and that will deliver the greatest business clearance, for example, will always require benefit. Delivering a more defined project sound commercial judgement and rights increases your chances of success and of data will still need to be keyed in. It is proving ROI, allowing you to get to the therefore vital that human intervention is benefits of your new solution faster. By concentrated where it can deliver the most establishing common processes you can business value or where there is no then build on this foundation to add lines of alternative. Technology can help maximise business incrementally. the effectiveness of human activities in a range of ways for example, implementing An enterprise-wide view maximises workflow technology ensures decisions are commercial benefits made in a timely fashion and according to Clarity over rights held, and enterprise-wide business processes. visibility of these rights, is key to maximising their commercial potential and minimising A successful solution will encompass costs. Many content providers are currently people, process and technology managing rights across a number of Overall success ultimately depends on the disparate databases and solutions and successful fusion of people, processes and need to consider how they can tie existing technology. End user buy-in is essential to systems together in order to provide an the success of any IT system. By investing enterprise-wide view. time and effort into a good user interface, for example, you increase the likelihood that end 07

10. The golden rules of successful rights management in the digital environment (cont.) There are two main methods to achieving lack of a common product hierarchy makes it this: migrating IP data to a new or very difficult for an organisation to tell whether consolidated solution, or achieving a they have the rights at a component level to consolidated view while maintaining legacy do what they want with the content. By solutions and datasets. In the short term, agreeing a common product hierarchy at the being able to achieve a consolidated view start, organisations benefit from a secure without the necessity to migrate data will foundation onto which they can add lines of deliver immediate benefit. This may be the business incrementally. preferred long term solution, or may be a stepping stone to a physically consolidated While a range of industry standards are dataset and/or solution. In the longer run a available to support standardisation efforts3, consolidated, enterprise-wide solution is the proliferation of standards means that highly desirable as it yields a number of collaboration between supply chain important benefits, including the ability to participants has a vital role to play. Using a drive down costs, while increasing efficiency standard approach within a supply chain and performance. means companies dont have to do everything themselves, but instead can pass Standardisation and collaboration part of the responsibility to partners and will drive down costs and speed clients. This can take the form of establishing time-to-market a common language about products and Standardisation and common processes are rights across the industry, for example, or essential to success now, as well as agreeing a standard set of product and supporting future evolution and business component definitions. This type of agility. While geographical differences will collaboration offers huge commercial remain due to the effects of different advantages by driving down costs and legislative regimes, standardisation is useful speeding up time to market, benefiting all 3 These include metadata standards such as at many levels - both within an organisation participants. ODRL and MPEG21, and identifier standards as well as across a supply chain. For example, such as ISRC, ISWC, CAE Number and ISAN. Next steps Want to find out more? Capgemini and SAP can help you in a number of ways: > Join our mailing list to ensure you get the latest > Request a one-to-one briefing or IP management rights management research healthcheck to benchmark your IP management strategy and discover the next vital steps your organisation should take louise@mcdonaldbutler.exvm.com kate.jones@capgemini.com 08

11. the way we do it The intelligent way to manage your Intellectual Property Intellectual Property (IP) honestly claim that they have the management remains high on vision and the capabilities to meet the agenda for most media the IP needs of the future market. organisations in the UK, The problem is that sorting out the whether their focus is on systems and processes that support acquiring, producing, selling or Intellectual Property is seen as a distributing content. The tough nut to crack. models may be different but the pressures and issues are the Some organisations, however, are same. getting it right. Working with Yet while the strategic intent is Capgemini, they are seizing the there, many companies are giving opportunity to turn their IP into up on the idea of implementing valuable assets. Capgemini has rights management solutions at proven experience of delivering least for the moment. solutions supporting the rapidly changing media and entertainment Most of those organisations are sector, helping to shape IP struggling to get to grips with the management best practice for challenge of defining, implementing competitive advantage. and sustaining an effective IP solution and few of them would

12. Keeping up with the pace of platforms. The uncomfortable truth Effective IP management will change is that content will be released on a be the foundation for fully So whats preventing the wide-scale platform, if not legitimately by the exploiting future opportunities adoption of IP management content owner, then illegitimately in traditional and digital solutions? The root of the problem by someone else. Day and date appears to be the rapid rate at which release is becoming the norm and spaces. new products and media are release windows are shrinking. The arriving. same is true of territories a new season of a hit US series must be Intuitively, most people think that launched simultaneously in the UK. improving the way IP is managed in an organisation feels like the right The release of content to new media thing to do. However, implementing platforms has a higher manual an IP solution seems to be an overhead than for existing linear exercise in hitting a moving target. platforms. In a recent test a major UK broadcaster recently asked its Content owners recognise that their legal team to figure out what new existing markets are collapsing media rights were cleared in a well decline in sales of CDs; decline in known production. The task took circulation figures for newspapers; two weeks using current methods decline in audience figures for linear and systems. Its no surprise then television channels; decline in that rights clearances form a major listener figures for radio. part of the pre-launch programme for the Kangaroo video-on-demand To counter these shifts and to platform. capitalise on emerging opportunities, publishers, The current siloed approach to IP broadcasters and other content management is not sustainable in owners are starting to embrace the long run. Digital products and digital and drive incremental distribution channel proliferation revenues by testing new digital are exacerbating traditional IP distribution channels and revenue challenges. models. No-one really knows where the market is going so there is no Clearly the target is moving, but are choice other than to back every you running hard just to stand still? horse, whether thats getting content out through catch-up services, The unfortunate outcome of all this through digital aggregators like continual change can be an iTunes, or via digital communities over-reaction that sees analysts and such as Facebook. business reps endlessly cataloguing specific requirements for every With the advent of every new option possible outcome. But this hugely theres a scramble to package inflates the cost, undermines the content into new forms to take business case and creates a advantage of the opportunity. perception of an unwieldy behemoth Getting the content prepped is the of a system that drives a wedge easy part determining whether the between IT and business. The rights exist to do so is far harder. result? Key stakeholders refuse to support the programme. Beyond that there is the pressure to beat piracy there is no time to carefully manage releases to new

13. the way we do it Agility is the goal definitions outweigh the initial hard Some of the IP management The message is that you cant design work. solutions on the market the solution for every eventuality; interface to industry sources instead you need to focus on making Put in place a common product of information, significantly the business agile and the system hierarchy at the start to provide a flexible. foundation onto which you can add improving the speed and lines of business incrementally. accuracy of metadata To move forward Capgemini capture. recommends a number of actions: Music clearances Many organisations when they take Choose a product that lets you add on an IP project put music in a box or change workflows as your labelled too-difficult, well do that business changes. Dont try and later. Thats a mistake, because not design all the workflows from day facing up to music rights impairs one; pick the parts of the business the ability to do everything else. that will benefit most and start Some musical clearances will always there. remain manual, but for the vast majority of cases its reasonably Automate what you can, but straightforward to automate accept that clearances are clearance based on the restrictions fundamentally about commercial you have in your blanket judgement. Make sure the solution agreements with the various you have in place supports work collecting societies. That said, some lists or messaging, so that when the musical clearances are always going right answer is not available from to involve negotiation with labels the system the appropriate and publishers; the key there is individual can be involved as part making sure the workflows involve of the workflow. the music licensing executives in an efficient way early in the process. Pay attention to the product hierarchy: not having a single User experience product hierarchy across all lines of Poor user interface design is another business will impair the ability of key factor that alienates licensing the organisation to answer the execs or creatives from many of the question what can I sell? Without IP management solutions on the that hierarchy it becomes impossible market, either because they perceive to tell whether you have the rights its going to turn their job into a at a component level to do what you data-entry role or that it just want with the content. doesnt reflect the way they work. Look out for this years new releases Support cross department working from the major vendors. At least one by getting the different silos to agree of the big names now offers a user a common language that addresses interface that can be configured to the issue of products and match the way your business works. components being defined slightly differently across the organisation. This isnt easy: often the different lines of business are simply reflecting the terminology of the wider industry that they face off to, but the benefits of some common

14. Partner-up and work smart Some of the niche products on the As the number of platforms grows and To give licensing executives the best market succeed by linking producers the pace of the media business resource for finding and exploiting and broadcasters into the same system. accelerates, the current fragmented content, the IP solution must be able Product metadata is gradually built up means of managing IP will prove to deliver depth and completeness to during commissioning and production unsustainable. Those leading players the product information. so that the description of the product in this sector working with Capgemini is complete by the time of the first to implement the foundations of a The downside of this is the burden it broadcast. good IP management solution are places on metadata capture. It goes already in a stronger position than without saying that metadata should Conclusion those that have given up. They will be be captured at the earliest possible Whilst having good product and rights able to spot opportunities and adapt point in the lifecycle and by the right metadata is crucial to the success of to them more quickly and efficiently people. This is as much about process any IP management solution, the cost than those who have retained their old changes as it is a feature of the system: and complexity of maintaining it could manual silo approach. update roles and responsibilities to undermine your business case and encourage people to think about the prevent the solution ever getting off benefits for the whole of the the ground. The good news is that organisation if they take there are smart and efficient answers. responsibility for capturing and maintaining metadata properly view metadata as a corporate asset. ensure that there is governance in place for the processes and the data across the old silos. undertake ongoing training to ensure these attitudes are embedded across Capgemini, one of the world's foremost Through commitment to mutual success providers of Consulting, Technology and and the achievment of tangible value, we the organisation. Outsourcing services, has a unique way help businesses implement growth of working with its clients, called the strategies, leverage technology, and The overhead of maintaining the Collaborative Business Experience. thrive through the power of metadata in the system has a tendency collaboration. to suppress the business appetite for Backed by over three decades of industry and service experience, the Collaborative Capgemini employs approximately an IP management solution. In truth Business Experience is designed to help 83,500 people worldwide and reported much of that information is already our clients achieve better, faster, more 2007 global revenues of 8.7 billion euros. available in the systems of suppliers, sustainable results through seamless partners or other industry players. By access to our network of world-leading More information about our services, linking with those organisations you technology partners and collaboration offices and research is available at can share asset metadata: information -focused methods and tools. www.uk.capgemini.com about talent is out there in Equity databases; information about Mark Friend Stuart Gordon producers and directors is held at Head of Telco, Media and Entertainment Lead Media Consultant, Technology PACT and DPRS; information about mark.friend@capgemini.com Consulting music tracks is available via Phone + 44 (0) 870 366 0801 stuart.gordon@capgemini.com Phone + 44 (0) 870 904 6196 web-services from MCPS-PRS. Intellectual Property TME APR08JC 2008 Capgemini. No part of this document may be modified, deleted or expanded by any process or means without prior written permission from Capgemini