Transforming Rights Management

for High Performance

Achieving growth through innovation:
rising to the challenge of managing
television content in the digital era
An Accenture point of view
Executive Summary
Rapid and pervasive change in the television industry’s technological, consumer and
competitive dynamics means broadcasters’ traditional approaches to acquiring and manag-
ing content rights are no longer fit for purpose. With financial pressures having intensified
in the downturn, it is increasingly vital for companies to exploit the full value of their
content. Yet the proliferation of platforms, channels and formats driven by the migration
to digital means rights management has never been more challenging—or more complex.

Against this background, broadcasters seeking to achieve sustained growth and high
performance have no choice but to innovate in rights management, as they have in other
parts of their value chain. This means adopting a “venture capital” approach to rights
acquisition, an “asset manager” approach to rights exploitation, and a product- and
rights-centric approach to financial performance management. Achieving all this requires
sweeping changes to strategy, organization, processes and systems. An ideal first step is
to implement an enterprise-wide capability model to provide and maintain a unified and
up-to-date view of all the organization’s rights assets—delivering the visibility and control
needed to manage rights effectively and maximize profitability.
Today’s industry context

In recent years, the context within which broadcasters manage content rights has
been transformed by ongoing change across three dimensions:

1
The sharp rise in financial
pressures on the industry,
reflecting both structural
change in industry dynamics
and the impact of the global
economic downturn.
2
The growing importance
3
Growth in the complexity
of exploiting the full of rights management
value of content to itself, as the digital
sustain high performance revolution continues to
in broadcasting. drive proliferation in
content availability,
channels, content formats
and modes of consumption.

Transforming Rights Management for High Performance 1

Dimension 1
Financial pressures

2 Transforming Rights Management for High Performance

1. Investors’ uncertainty over future growth
The broadcast industry has been
facing growing financial challenges,
compounded by investors’ declining
trust in the industry’s ability to sustain
future growth.
Accenture’s recent biannual Share-
holder Value Analysis (SVA) research
study, covering the financial perfor-
mance of 20 listed broadcasters
worldwide between June 2006 and
June 2008, reveals a marked fall in
Total Return to Shareholders (TRS).
2. The impact of the economic slowdown
The economic downturn has intensified
the financial pressure on broadcasters
by triggering a fall in advertising
investments. The decrease in “future
value” was the principal driver of the fall
in the broadcasting industry’s TRS up to
end of 2007, but the global slowdown
has now added further momentum to
the decline. In the present challenging
times, broadcasters’ combination of
declining revenues and relatively rigid
cost structures is putting them under
significant financial pressure, causing
industry analysts to issue a steady flow
of cautious recommendations on their
shares.
While the recession and intensifying
competition are dampening the growth
of both Free-to-Air (FTA) broadcasting
and Digital Pay TV, the latter of these
appears to be less impacted by the
Furthermore, an analysis of changes
in industry enterprise value reveals an
increasing weighting of the current
value—associated with profitability
from existing operations—over the
future value of many of these compa-
nies, meaning they are generating little
or no premium from their future
strategies.
These findings appear to reflect the
fact that the proliferation of sources
for video content, access platforms
and forms of consumption is continuing
crisis. Digital Pay TV will probably
emerge from this recession earlier than
FTA TV, and should continue to improve
its position relative to FTA TV going
forward, reflecting the following
factors:
Pay TV is more resilient to economic
downturn than FTA TV. Major FTA
companies typically have between 1,000
and 2,000 advertising clients, the
biggest of whom are quick to cut back
their ad spending in a downturn. In
contrast, Pay TV providers have millions
of subscribers for whom Pay TV
represents a relatively inexpensive
leisure item that they need all the more
when spending more time at home (as in
a recession). As a result, Pay TV benefits
from safer and more stable revenues
during times of crisis.
to drive audience fragmentation and
eating away at the audience base of
free-to-air linear TV. As a result,
traditional commercial broadcasters are
losing the scale effect that previously
made them the preferred communica-
tion vehicle for large advertisers—and
those advertisers are increasingly
turning to new digital platforms that
can provide more targeted audiences,
innovative advertising formats, clearer
measurability and premium engagement.
Pay TV families tend to watch less
programming on traditional terrestrial
channels. The larger the number of
channels available, the greater the
erosion of audience share for traditional
broadcasters—a trend evident to varying
degrees in the UK, France and Italy.
Pay TV providers tend to belong to
multinational groups and generally have
growing subscriber bases. Both of these
factors help them generate economies
of scale in rights procurement,
resulting in migration of content from
FTA TV to Pay TV. In the UK, for
example, BSkyB has won several popular
series from FTA since 2006, including
Lost from Channel 4 and 24 from BBC2.
Transforming Rights Management for High Performance 3
Existing and innovative technologies
will further improve the attractiveness
of Pay TV through an enhanced viewing
experience:
Higher video quality.
As well as benefiting from the incorpora-
tion of PVR functionalities into set-top
boxes, Pay TV is fast establishing itself as
the home of HD TV across Europe. Pay TV
is also best placed to exploit 3-D TV. In
January 2010, BSkyB conducted what it
claimed was the first 3-D broadcast of a
live sports event to a public audience.
Enhanced customer experience.
At present, Pay TV subscribers consume
a relatively narrow sliver of the content
effectively available to them. Going
forward, Pay TV providers will use
“personalised channels”—based on
individual tastes, behavior and con-
text—to broaden consumers’ access to
relevant content, and push TV viewing
beyond the traditional EPG-driven
experience. The next innovation in
4 Transforming Rights Management for High Performance
broadcast television might be the
presentation of content (linear and non
linear) in a personal and seamless
manner—a manner that encourages
viewers to be matched with content
based on their individual tastes,
behavior and mood. A visual recom-
mendation engine driven by consumers’
tastes, behavior and context would
drive operators to build more intimate
and personalized consumer relation-
ships. This represents a tremendous
opportunity to improve typical EPGs,
which look like static tables with
hundreds of lines filled in with short
titles and text and which are unable to
intercept consumers’ desires ultimately
driven by emotions. We believe digital
operators can provide viewers with
real-time relevant/emotional recom-
mendations and a tailored channel
based on taste, behavior and context:
“content which recommends content.”
The pay-off would be twofold: sustain-
ing revenues (through lower churn and
higher on-demand purchases) and
maximizing content ROI by promoting
niche and long-tail content.
In previous recessions, broadcasters
managed to cut costs without reducing
their program spend or changing their
proposition to viewers/customers. This
time, broadcasters’ responses must be
more radical, due to the much sharper
decline in advertising and the tougher
competitive landscape.
Alongside short-term actions such as
tactical cost reductions and disposing
of non-core assets, broadcasters need
to take steps to restore a fair balance
between the cost of content (primary
cost item) and its associated revenues.
This will require two skills that are still
relatively rare among the major
industry players: the capability
to measure precisely the economic
performance of content (reporting and
control); and the capability to manage
intellectual property rights outside the
traditional linear broadcasting context.
Transforming Rights Management for High Performance 5
Dimension 2
The growing importance of exploiting
the value of content

6 Transforming Rights Management for High Performance

Figure 1: Breakdown of TV broadcasting revenues and expenditure, 20071
1 European Commission – DG Information Society and Media. Study completed by Attentional Limited, Oliver &
Ohlbaum Associates, Rambøll Management and Headway International

Broadcast Revenue
78.1
80
Retailers
13.6 Platform
70 Revenue Share
Pay TV
26.7
Revenues
5 Transmission Costs
60

50 Other Profits, Administration

5.3 24.5
Revenues and Management

40

28.3 Advertising Film and Net

30 10.4 Rights Broadcasters
TV Imports
Acquisition Revenue
Spending Program
6.2 Sports Rights
20 Content
Expenditure
Commissions by
8.9 In House by Broadcasters
10 17.8 Licence Broadcasters
2.6 News
Fee
6.9 External
0

3. Cost of content borne by broadcasters

The costs associated with content
now represent a substantial part of
broadcasters’ total operating costs,
and account for the majority of their
investments and assets. As Figure 1
illustrates, research by the European
Commission shows that total TV
industry revenues in the 30 EU member
states in 2007 came to €78.1 billion,
of which only €64.5 billion flowed
to broadcasters. Approximately €35
billion of this money was invested in
content, with €16.6 billion spent on
acquiring rights and €18.4 billion on
original programming.
In summary, these figures show that
broadcasters generate less than €2 in
revenues for each €1 spent on content.
Is this 2:1 ratio sustainable? Using
football clubs and media and entertain-
ment conglomerates as a benchmark,
we find that in those football leagues
where the bulk of clubs’ revenues
come from TV rights paid by broad-
casters, the cost of players (analogous
to their “content”) is very close to
revenues, so the ratio is around 1:1.
In contrast, large entertainment
conglomerates run diversified business
models, where intellectual property is
exploited through multiple platforms
such as movies, home video, books
and internet. In these businesses, the
ratio is roughly 5:1. These comparisons
suggest that broadcasters need to
improve their ability to monetize their
intellectual property.
The value of content is fundamentally
determined by the rights associated
with it and the resulting revenue
opportunities for broadcasters.

Transforming Rights Management for High Performance 7

Monetization of these rights can be
grouped into four categories:
Mainstream Transmission
(advertising, license fees2, subscription
fees, pay-per-view fees)
• Therights to the first few
transmissions;
• Therights to subsequent repeats on
specific channels for a nominated
period of time;
• Therights to sell the program on
video.
4. The reaction of broadcasters to current business context
To increase profitability, broadcasters
need to improve their content return-
on-investment (content ROI). To do this,
they need to strengthen or acquire
new capabilities in content planning,
acquisition and exploitation, including:
• Innovation through experimentation: • Eliminating programs that fail to
“scouting” the content market to yield sufficient advertising returns.
identify content for acquisition
when it is still “early stage” (cheap,
but with high up-side potential);
• Atruly complete view of the
available rights, allowing for
comprehensive multi-platform forward, commercial broadcasters may
exploitation; and
• Detailedcontrol and management
of the performance of content.
8 Transforming Rights Management for High Performance
Internet and Other New Media
(digital advertising, subscription fees,
pay-per-view fees)
• Therights to show the program on
internet and other new forms of
access;
• The rights to use the program name
and excerpts for internet and mobile
clip services;
• Therights to use the program on an
on-demand service.
Trade
(carriage fees, licensing fees)
• The rights to sell on to other broad-
casters in the same national market
(often with a hold-back to allow the
original broadcaster a unique period
of use);
To date, broadcasters’ responses to
the current environment have largely
focused on the way content is used in
“mainstream transmission,” and have
mainly involving cutting programming
costs. Recent steps have included:
• Attempting to share the costs of In many cases, strategic management of
programs with other broadcasters.
For example, NBC is already sharing
its Friday Night Lights programming
with satellite operator DirecTV. Going
collaborate increasingly with players
in other markets to share the costs of
making new shows. Early examples
include CBS making two of its new
cop shows, Flash Point and The Bridge,
with Canada's CTV network, and NBC
picking up the 13-episode series
Merlin to run after its airing on the
BBC.
2 The annual fee (tax) paid by individuals owning a TV
• Therights to sell the program
internationally;
• Therights to exploit the format of
the program (production bible) in
the domestic market and overseas.
Commercial
(revenues from retail, licensing fees)
• The
rights to exploit content on
home-video;
• Therights to exploit the program
brand and characters in
merchandising and licensing deals.
These moves reflect broadcasters’
increasing focus on controlling and
improving the returns on their content
spend. However, most financial decisions
regarding content still result in cost-
cutting rather than transformation of
capital management to deliver superior
return.
programming costs is hampered by inad-
equate financial information. To address
this shortcoming, broadcasters need
more sophisticated financial controlling
models that treat programs as self-con-
tained investments rather than as cost
items, and programming grids as a port-
folio of investments rather than as a
cost structure. In practical terms, this
means that: 1) programming costs must
be assessed compared to generated rev-
enues (not only audience); 2) strategic
planning must be guided by ROI targets
at channel/bundle-of-channels level;
set to the public broadcaster of their country
Internet and other new distribution platforms
Broadcasters have started to
make more use of new video
distribution platforms including
IPTV, Web TV, mobile TV and
recently Over-the-Top TV (OTTV).
In the PC/WEB TV arena, U.S.
networks have progressed from
working with portals such as
AOL and Google Video to offer-
ing their own access portals. For
example Hulu.com, founded by
NBC and Newscorp in late 2007,
carries free, ad-supported
ABC shows plus NBC and Fox
programming.
To attract new customers and
counter free services such as
YouTube, broadcasters are also
starting to move into “Over-
the-top TV”—a way to access
both linear broadcast services
and also broadband on-demand
and catch-up services on the
TV set through “unmanaged”
broadband.
This expansion in distribution
platforms means broadcasters
need stronger end-to-end gover-
nance over rights. They must be
able to know what content can
be used on what new media;
automate the information man-
agement around complex rights
contracts based on multiple
reward models; track content
usage precisely; and negotiate all
the relevant components system-
atically within the overall rights.
There are several examples of
the difficulties that broadcasters
may face when dealing with
content distribution through
new media. Mexican broadcaster
Televisa and its U.S. licensee
Univision resorted to litigation
over which of them had the right
to post Televisa-made programs
on the internet. And when
mobile TV operators first entered
European markets, broadcasters
found it difficult to identify
which content from their linear
channels could be broadcasted
over mobile.
Transforming Rights Management for High Performance 9
and 3) responsibilities must be clearly
linked to managers’ impact on financial
results. Given these needs, there are
still some critical capabilities that need
to be improved in traditional broad-
casting controlling models:
Performance metrics and reporting.
Planning and control departments
typically control the cost of programs
against their budgets.
Planning and control.
In many cases, high-level editorial
planning is not adequately supported
by analyzes to facilitate streamlined
capital allocation.
Performance management.
The way management responsibilities
and objectives are currently assigned
does not support a strong focus on
profitability at the program and
programming grid level.
10 Transforming Rights Management for High Performance
Several other elements also play a
critical role in enabling a strategic
approach to content ROI. These include:
Using program innovation
to fight off intensifying
competition for consumers’
attention and share of wallet.
In the UK, ITV Group's former executive
chairman Michael Grade commented:
“This business has a fantastic future
as long as we can go on producing
Britain's Got Talent, and as long as we
can go on producing programs which
attract millions of people.”3 All major
commercial broadcasters are seeking to
leverage preferred partnerships with
production houses as a way to access
profitable new ideas. Examples include
RTL with Freemantle, Mediaset with
Endemol and ARD with Studio Bavaria.
Most major broadcasters tend to
innovate primarily by acquiring formats
and ready-made programs once they
are already proven.
This approach is relatively safe but
increasingly costly. Following the
growing specialization of roles across
the industry value chain in recent years,
profitable innovation is coming more
and more from experimentation. In TV
rights acquisition, this means adopting
a “venture capitalist” approach: finding
promising early-stage opportunities
through a cycle of scan and filter—
analyze—negotiate—invest and launch.
Like VC’s, broadcasters should be
continuously on the look-out for new
and innovative projects that need an
established platform to realize their
potential. One example was the
deal between the BBC and Ragdoll
Productions, which brought Teletubbies
to the UK’s TV screens in 1997.
3 Press Association National Newswire, May 14, 2009.
Using content libraries
and long tail rights more
intensively.
Over the past three to five years,
broadcasters have expanded to other
distribution platforms (DVBH, IPTV)
and leveraged new Digital Terrestrial
frequencies (DTT). At the end of 2008,
there were 104 channels available over
DTT in the UK, Italy, France and Spain.
Of these, 27 were simulcast of ana-
logue transmissions, while 77 were new
to terrestrial transmission; and more
than a half of these 77 had been
launched by traditional free-to-air
players. Alongside new productions,
these new channels are fed by content
archives and rights to “long-tail”
content. Ideally, this proliferation of
channels fed by content libraries should
be facilitated by easy, effective and
continuously visibile rights availability.
However, in several broadcasters this
visibility is hampered by a lack of inte-
gration between scheduling and rights
management systems and—in some
cases—poor and/or rigid reporting pro-
cesses.
Despite these barriers, broadcasters are
learning how to leverage “mainstream
transmission” rights more profitably. In
the UK, for example, major commercial
TV channels have used new DTT
channels to recover audiences that
their analogue channels have lost to
pay TV.
However, some other opportunities to
monetise intellectual properties–such
as internet and other new distribution
platforms, and trade and commercial—
are not yet being exploited with the
same intensity.
Article by Kelly Macnamara and Holly Williams
 Trade and Commercial
The study for the European negotiate overseas rights. Yet
Commission that we quoted broadcasters spend one-third
earlier in this paper4 indicates of their program budget on
that broadcasters could boost fictional programming—a genre
revenues by exploiting new ways that they think has significant
of monetizing TV content rights. export potential. So why are
But it also suggests that most broadcasters not bothering to
broadcasters are not yet taking negotiate for overseas rights?
concerted action to do this. The
survey shows that 100% of In the same survey, around a
broadcasters expect to receive third of producers say they feel
first (and repeat) showing rights that the payment they receive
for domestic terrestrial TV and for rights is less than the value
new media when commissioning they could create themselves.
programs externally, but that This implies that producers
only 25 percent expect to believe broadcasters are failing
to monetize programming
productions as effectively as
possible.
Such findings indicate that
broadcasters’ approach to rights
management remains focused
on serving the distribution of
content through “mainstream”
channels. Rights acquisition is
still primarily seen as “procure-
ment,” rather than as a “profit
center” that identifies revenue
opportunities, proposes the
acquisition of rights for multi-
faceted exploitation, and serves
as a “growth platform” for other
divisions.

4 European Commission—DG Information Society and Media.

Study completed by Attentional Limited, Oliver & Ohlbaum
Associates, Rambøll Management and Headway International

Transforming Rights Management for High Performance 11

Dimension 3
Growing challenges and complexities
around rights
Broadcasters are reacting to the increasing competition for audiences and the
growing cost of “eye-capturing” programs by seeking to maximize the usage and
monetization of their own content. However, the much more complex issues
surrounding the exploitation of intellectual property rights are pushing broadcasters
out of their “comfort zones.” Two principal challenges are slowing down and
complicating the transition from “pure broadcaster” to “integrated multi-media
company”: (1) revenue models for new and unconventional ways of rights
exploitation are still uncertain; and (2) existing rights management capabilities limit
any extended use of intellectual property.

12 Transforming Rights Management for High Performance

5. Uncertainty over revenue models
Experimentation and a bold positioning
in new media are now imperative for
broadcasters seeking to be a leader in
rights exploitation.
As Accenture’s Global Consumer
Broadcast Survey 2009 shows, consum-
ers are rapidly adopting new consump-
tion habits enabled by emerging tech-
nology. Recent growth in the usage of
Hulu, for example, has been explosive.
The key is turning this change in audi-
ence behavior into steady and substan-
tial revenue flows. Our research also
indicates that consumers are increas-
ingly willing to pay for the content
they want and that 80% are prepared
to watch ads—especially “pre-roll”
advertising—in return for access to
programs.
6. Current rights management capabilities are a limiting factor
To become leaders in rights manage-
ment, broadcasters should target
and coordinate a range of initiatives
around intellectual property. To do this
effectively, they need to develop rights
management functions that operate as
true business partners rather than as
procurement and/or sales offices. They
also need a number of key capabilities
that are being hampered by existing
organizational models. These include
the ability to:
• Builda “horizontal view” of TV
rights—particularly critical for
broadcasters operating multimedia
businesses
• Execute coordinated acquisition — Develop JVs to profitably deliver
strategies (across business units and products and activities across all
between rights procurement and media including live shows.
rights sales functions)
Nevertheless, three major doubts still
surround the revenue potential of pre-
roll advertising. The first is the size of
available inventory—a single slot at the
beginning of a program offers less
capacity than traditional breaks during
it. Second, advertisers are still strongly
focused on “paid search,” often regard
the internet as a medium for tactical
campaigns rather than strategic com-
munication. Third, the potential for
linking advertisement pricing to perfor-
mance seems limited.
If in the short- to medium-term, online
distribution is unlikely to help broad-
casters capture the bulk of advertising
revenues shifting from traditional
media to the internet, and multi-
channel packages on DTT will provide
only partial protection from the
erosion of audience and advertising by
Pay TV, they must find other ways to
revitalize their growth.
• Systematicallyexploit opportunities • Continuouslyscout for new program
for content monetization, beyond ideas beyond conventional showcases.
transmission on mainstream and
interactive media, such as:
— Trade portfolios of branded
channels to other TV distributors
(PAY TVs) abroad
— Invest into independently produced flexibility to manage today’s rights
programming
— Showcase, sell and distribute
most successful television
programs to broadcasters from
across the globe
— License editions of most popular
titles to publishers
One possible approach is to invest in
strong commercial arms to create,
acquire, develop and exploit media
content and brands across the largest
possible geographic area and through
the widest possible array of platforms.
But this approach is far from wide-
spread. Less than 7% of total TV reve-
nues in Europe in 2007 came from
ready-made program sales by broad-
casters and commercial exploitation. In
contrast, the multiplication of business
platforms is a key value driver for
media companies. For example, The
Walt Disney Company acquired Marvel
Entertainment with the aim of using
its most bankable characters and
storylines across its various outlets.
At a more operational level, existing
rights management systems and
processes are often ill-equipped to
provide a comprehensive view of
available rights. They also lack the
acquisition contracts, with complexities
such as broadcast over different
platforms and/or channels and
multiple sales models.
Transforming Rights Management for High Performance 13
14 Transforming Rights Management for High Performance
Rights Management transformation in action: Bayerischer Rundfunk
Bayerischer Rundfunk (BR) is the
public service broadcaster for
the state of Bavaria in Germany,
operating five radio stations,
a regional television station,
videotext service, an educational
programming channel called
BR-Alpha and online services. To
reduce costs, increase revenues,
boost responsiveness to market
changes and support regulatory
compliance, BR decided to
transform its legacy platform-
orientated approach to rights
and royalties management into
a comprehensive integrated
model, capable of dealing with
rights and royalties in a unified,
consistent way across its televi-
sion, radio and online formats.
Accenture supported BR in
redesigning and implementing a
new strategic and operational
model for its rights and royalties
management across TV, radio
and online. Accenture’s initial
analysis enabled us to formulate
a set of key operating recom-
mendations. These included
an overarching framework and
strategic parameters for inte-
grated, enterprise-wide rights
and royalties management;
comprehensive organizational
management structures;
redesigned functions and
processes and the supporting IT
applications. By implementing
all these components, Accenture
enabled BR to realize the cost,
revenue, agility and compliance
Transforming Rights Management for High Performance 15
benefits of consistent, joined-up
management of rights and
royalties across its various
platforms.
BR’s Corporate Counsel, Prof.
Dr. Albrecht Hesse, commented:
“The cooperation working with
the Accenture team was exem-
plary. Their targeted approach,
thorough methods to prepare
for this issue and the derived
recommendations delivered
valuable and marketable results
to Bayerischer Rundfunk with
regard to the acquisition of
rights, the optimization of the
organizational structure and
process improvements.”
16 Transforming Rights Management for High Performance Transforming Rights Management for High Performance 19
High-Performance Rights Lifecycle
Management
The video content industry is migrating away from its traditional industrial
logic—the world of “television products” characterized by vertical integration
and physical assets—toward a more service-oriented approach. This shift
requires a new mindset, one based on horizontal integration and intangible
assets (content property rights), with a constant and rigorous focus on
enhancing the “consumer experience.”

As companies strive to address the
underlying shift from the industrial to
knowledge economy, the leading play-
ers will be differentiated by their capa-
bilities in managing intellectual prop-
erty. To achieve this, we believe broad-
casters need to build an integrated,
high-performance rights management
lifecycle.
There are two logical macro-phases in
the lifecycle of TV rights. The first runs
from program conception through to
mainstream broadcast. The second
deals with large-scale utilization of a
program together with its format and
characters. To these two phases, we
can add a third: financial performance
management and control, which
enables the broadcaster to understand
whether the first two phases are work-
ing effectively and make changes to
improve end-to-end performance if
necessary.
To achieve high performance in rights Each of these three pillars corresponds
management, a broadcaster needs to a phase of the high performance
toencompass and integrate all three rights lifecyle. We will now look at
phases in a seamless capability from each of these phases in detail.
acquisition, through exploitation, to
financial performance management,
and then feeding back into acquisition
and exploitation. To underpin such a
lifecycle, we believe a broadcaster
should deploy a model with three
key pillars:
• A“venture capitalist” model to
acquisition, providing funds to
promising content ventures in return
for ideas and early-stage concepts;
• An “asset manager” model to
exploitation, focused on developing
management and utilization strate-
gies that span the full spectrum of
content employment; and
• A“product/rights–centric” model
for financial performance
management.

Transforming Rights Management for High Performance 17

Phase 1
Rights acquisition:
broadcasters as content
venture capitalists
The first challenge reflects the
growing need for broadcasters to gain
competitive advantages over old and
new competitors through premium
content—the primary value proposition
to consumers.
However, investing in premium
movie acquisition is unlikely to be
an effective strategy, considering the
high expenditure required and the
decreasing profitability caused by
thematic Pay TV channels.
In 2008, David Hollis, senior acquisition
executive at UK broadcaster ITV,
commented: “There are so many plat-
forms that films are available on before
they come to terrestrial television that
it's no great secret that the potency of
so-called first-run films on terrestrial
18 Transforming Rights Management for High Performance
TV has diminished. The days of the 20
million (audience) for a Christmas film
are gone.”
Recent developments elsewhere
support Mr Hollis’s view. In Spain,
free-to-air broadcaster Telecinco no
longer buys any film, as Ghislain
Barrois, head of acquisitions, explains:
“The efficiency of films on free-to-air
TV in Spain has collapsed. We now rely
on other products, such as TV series.”5
So, fresh, content approaches and
initiatives are needed. In our view,
broadcasters can deliver and sustain
this innovation by transforming their
approach to rights acquisition to
become content “venture capitalists.”
Under this new mindset, broadcasters
should be able to: a) represent the first
port of call for producers looking to
develop new program ideas; b) jointly
build up program prototypes; c) trial
and improve these prototypes within a
safe “area”; and d) realize the “up-side”
through broadcast on flagship channels.
5 www.screendaily.com/mipcom-focus-is-tv-tuning-back-
into-film/4041335.article
These objectives can be turned into
reality by creating one or more slim,
agile “corporate venturing” units.
This would require slim unit/s made
of professionals with strong editorial
background and industry knowledge
who can actively engage in experi-
mentation outside organizational
boundaries. The units would provide
limited constraints from established
editorial policies and time schedules,
regular access to an international
network of trusted sources and other
business contacts, systematic organiza-
tion of summits where producers pitch
directly to the broadcaster in face-to-
face meetings, including variants know
as "Speed Venturing," dedicated perfor-
mance management models (metrics,
timelines and processes), easy access to
secondary channels where to experi-
ment and consolidate program proto-
types.
Just as the core skill of a venture
capitalist is the ability to identify novel
technologies or businesses with the
Escalating complexity around rights acquisition
The complexity of content selection has been transformed by the
advent of today’s fast-changing multi-platform environment. Buying
a program now means negotiating across every platform (analogue,
DTT and satellite), across multiple territories and languages (original
language, English, etc) and across various access types (free, PPV, PAY
TV, etc). Ancillary rights (promotion rights, DVD, merchandising, etc.)
must also be negotiated and agreed upon.

potential to generate high commercial
returns at an early stage, broadcasters
seeking to boost the profitability of
their program schedules must invest
early in low-cost, high-return potential
programs. Besides delivering cost
reduction benefits, this will ensure that
the broadcaster provides competitive
and innovative programs—boosting its
reputation in the market.
Funding for this “venture-style” con-
tent acquisition can be obtained from
upfront advertising sales, and possibly
by partnering with advertisers as
investors at the development stage.
Phase 2
Rights exploitation:
broadcasters as portfolio
asset managers
The second challenge reflects broad-
casters’ growing need to make the
most of their investments in content.
They must face escalating complexity
in terms of the nature of participation,
residual and royalty contracts and the
expanding number and variety of per-
mutations of multi-dimensional rights,
restrictions and licences. Extracting
maximum value from intellectual prop-
erty entails wider utilization of program
formats and characters as well as pro-
grams themselves. “Phase 2” of the TV
rights lifecycle—effective exploitation of
all associated opportunities—has
historically been regarded as “residual
business” by traditional broadcasters,
but is now becoming an essential part
of effective rights management.
The key challenges in rights exploitation
lie in transforming conventional “rights
departments” into “asset managers.”
Under this new mindset, rights manage-
ment functions take over successful
programs and administer them on a
portfolio basis—monitoring content
markets, determining optimal rights
employment in coordination with
programming functions, and shaping
sales agreements and content remuner-
ation schemes, which are measured
on a yearly basis against “return-on-
investment” metrics.
As with financial asset managers, the
key for broadcasters seeking to maxi-
mize total return to shareholders (TRS)
is to run commercial activities that
return additional profits to re-invest in
premium programming and/or distribute
as dividends. Broadcasters should
empower specific departments to
manage a wide range of business initia-
tives against explicit financial targets.
To operate effectively as portfolio asset
managers, critical changes are required:
• TVcontent asset managers should
be “selling without boundaries,” at
the maximum possible intensity on
any content employment option. The
work of “rights managers” should
range from the production of local
versions of broadcasters’ formats
overseas, to international program-
ming sales and distribution, across a
comprehensive array of channels and
platforms.

Transforming Rights Management for High Performance 19

Figure 2: An integrated operational framework for rights management

High-level Organization Perspective

Potential Interactions
Company
Internal
Financial Integrated Marketing Archives Production:
View
Management Planning & TV, Print, Radio,
Scheduling Online

Rights & Royalties Management (RM)

Strategic Operational Copyright

RM RM Department

Acquire Administrate Use Commercialize

Company
External
View Funding Producers Licensers Content Distributors
Entities Acquirers

• Organizations should evolve from central function, with interfaces opportunities will require a solid
a traditional vertical operating model to multiple internal and external financial background, industry skills
to a horizontal one, grounded on an parties starting with acquisition on the outlet markets and a mind-
“enterprise-wide capability” across of rights and ending with rights set focused on ROI rather than just
all business lines. This model, which trading. compliance with budgets.
views rights and royalties as a
• Rights management entities should
“service” rather than a business silo, To implement these fundamental
be true industry operators, acting as
is characterized by: changes, a broadcaster will also need
business partners to the TV company
to evolve its IT application map toward
— a unique front-end, managing rela- they belong to. They may also provide
a rights management solution that
tionships with external partners, for additional budget for the broadcast-
both supports the new functionalities
the in/out rights negotiation and er’s productions by negotiating
required—rights dimensions, new
legal disputes, and with internal various commercial rights to the
business models, licensing—and also
departments, for administrative broadcaster’s programs, and, in some
provides a single point of access for
(e.g. cost/revenue accountability) cases, third-party programs as well.
rights data management, integrated
and operational (e.g. content
• To achieve this step-change in the with other key systems such as ERP and
availability, purging, end-user
way intellectual property is mone- MAM. An intelligent front-end must
qualification) matters;
tized, people dealing with content support the ability to manage content
— a unique operational entity, rights will need different skills than acquisition and licensing over different
monitoring/controlling rights and in the past. Rights executives have media platforms, thus increasing visibil-
royalties usage, and analyzing their traditionally had strong content ity and control over content availability
profitability in order to help busi- procurement and negotiation and dealing with increasing rights com-
ness units employing content over expertise. While negotiating skills plexity (i.e. dimensions, revenues mod-
different editorial products. Under will remain important on the sales els, regulatory compliance, proliferation
this unified and integrated frame side, rights executives seeking to of platforms and formats, etc.).
work (see Figure 2), Rights Manage- identify and exploit more multi-
ment (RM) Department serves as a faceted content employment

20 Transforming Rights Management for High Performance

Phase 3
Financial performance
& control: rights at the
core of the analysis
The costs associated with content now
represent a substantial part of total
operating costs and account for the
majority of broadcasters’ investments
and assets. It follows that rights should
represent the primary focus for man-
agement control activities, including
setting standards, measuring actual
performance and taking corrective
action. This approach calls for the
optimization of three capabilities:
Performance metrics and reporting.
It is quite rare to find a P&L at
program or programming grid level to
measure actual profitability and enable
more informed investment decisions.
Instead, profitability analyses are usu-
ally focused on whole channel perfor-
mance. However, only management
control analysis at a program level can
enable effective improvements, such as
rescheduling programs on the basis of
their profitability.
Planning and control.
Decisions on programs for the coming
season are typically based on the
analysis of audience data related to
the previous one. There is also limited
use of comprehensive analyses on a
four-quadrant matrix outlining where
to concentrate resources (“high
audience—high margin”) and where to
divert funds from (‘“low audience—low
margin,”) as well as highlighting trade-
off situations (“high audience—low
margin,” “low audience—high margin”).
Performance management.
Typically, the ad sales director is
responsible for overall channel (or bun-
dle of channels) advertising revenues;
the production director for compliance
with the production budget; the head
of programming for channel’s total
audience; executive producers for the
Transforming Rights Management for High Performance 21
audience and total cost of their
respective programs; and the head of
the rights department for compliance
with the acquisition plan and budget.
Such a configuration of managerial
goals results in a lack of joint responsi-
bility and hampers quick and effective
responses to under performance
in the programming value chain.
While the concepts outlined above
represent a true paradigm shift, imme-
diate steps can be taken to capture
benefits in more conventional business
frameworks. Accenture believes that
today’s broadcasters should build an
enterprise-wide capability model that
can provide and maintain a unified and
up-to-date view of all the organiza-
tion’s rights assets. This is the only way
to manage the complexities of today’s
evolving rights environment, while
achieving the visibility and control to
manage rights effectively and maximize
profitability.
Accenture’s recommendations for
broadcasters
Accenture’s wealth of experience working with major players in the broadcast
industry has enabled us to develop proven, practical solutions and approaches
to transform rights management.
To position themselves for long-term
high performance and growth, we
recommend that broadcasters should
progress from their legacy models, and
build an enterprise-wide capability
model that can support unified and up-
to-date visibility and managementof all
rights assets across the organization.
This transformation requires radical
innovation in each of the following
areas:
22 Transforming Rights Management for High Performance
1. Company strategy
Acknowledging that rights manage-
ment is one of the elements at the core
of a media company’s business strategy
requires treating rights as a “core
asset” rather than one of the largest
“cost items.” This means including
rights in the corporate business plan-
ning, budgeting and reporting process-
es, acquiring new skills in asset evalua-
tion and lifecycle management, and
introducing new performance manage-
ment systems for inventory manage-
ment and exploitation centered around
long-term return on investment;
2. Organization and
operating model
A new strategic focus also requires
large adjustments to organizational
and operating models. Broadcasters
need to evolve from the legacy vertical
operating model to a service horizontal
approach, based on common capabili-
ties shared across the entire rights
management lifecycle. This enables the
business to deploy three key assets:
• A business unit dedicated to the
screening and evaluation of new
formats, working closely with the
acquisition/licensing department to
increase investment in low-cost/high
profitability TV shows.
• A unique front-end for managing
relationships, both with external
partners on in/out rights negotiation
and legal disputes, and also with
internal departments on operational
matters.
• A unified and centralized view of
usage of rights and royalties,
enabling profitability to be analyzed
more accurately at the program level,
thereby helping the organization
allot content between different
editorial offers.
1
 In previous recessions, broadcasters managed to cut costs without reducing
their program spend or changing their proposition to viewers/customers. This
time, broadcasters’ responses must be more radical, due to the much sharper
decline in advertising and the tougher competitive landscape.

3. Processes • Content lifecycle management— • Vertical solutions that are highly

focusing both on internal usage and specialized in managing rights and
Broadcasters need to reengineer external commercialisation. royalties, but are not intrinsically
their rights management processes end- integrated with the planning and
to-end, to ensure efficiency and effec- scheduling function.
tiveness over three main steps: 4. Supporting IT systems
• Horizontal BIMS (broadcast informa-
• Content screening, pre-selection and A solution must be implemented that
tion management systems) solutions
definition of acquisition policy— can support any required new function-
that provide an in built integration
including make-or-buy decisions, alities—rights dimensions, new business
with the scheduling and traffic
identifying program genres for models, licensing—and also act as a
solutions.
acquisition, performing market central hub for managing rights, tightly
analysis, and negotiating content integrated with areas including planning
rights cost, usage and payment and scheduling, resource planning,
terms. media asset management, Corporate
Performance Management, and
• Rights acquisition—including analysis Enterprise Resource Planning. There are
and interpretation of agreement two possible approaches to integration
terms, research with legal and sales with the planning and scheduling func-
teams, recording restrictions and tion:
expiration dates, and different types
and combinations of rights.

18 Transforming Rights Management for High Performance

Transforming Rights Management for High Performance 23
How Accenture can help
Accenture can help broadcasters innovate for growth and transform their
management of rights and royalties for future high performance by bringing
to bear two main components:
Experienced, dedicated
media and entertainment
business and technology
team
Accenture’s broadcasting practice
has built up extensive experience in
managing complex rights management
transformation programs for major
broadcasters. In recent years, Accenture
has helped many industry clients such
as Bayerischer Rundfunk(see case study)
to re-design their strategic and
operational model for rights and
royalties management, and to design and
implement solutions capable of exploit-
ing multi-media market opportunities.
24 Transforming Rights Management for High Performance
20 Transforming Rights Management for High Performance
As a result, Accenture has developed a
series of capability and processes frame-
works to work as “accelerators” in
designing the future “to-be” reference
model. Accenture Innovation Center
for Broadband (ABIC) provides a large
set of accelerators that can “jump-start”
any media or broadcasting project (see
information panel). These accelerators
include case histories and high-level
business case information, materials on
due diligence and process frameworks
and flows, proof of concept documenta-
tion, and business blueprints.
Strong relationships with
key solution-providers in
rights management, and
extensive knowledge of
the available products
and systems
Accenture can provide in-depth knowl-
edge of all the available top-tier prod-
ucts, and of integration issues between
rights management and other areas.
Our team also has the proven ability
to translate functional and technical
challenges into solution deliverables, and
to manage complex and multi-vendor
implementation and integration projects.
Alongside Accenture’s experience of
partnering with clients on rights
management capabilities, we can also
show—as part of the digital TV offering—
a demo at ABIC of the end-to-end
digital supply chain for managing
content and delivering it over linear
channels under an “N-screens” solution.
Accenture Innovation Center for Broadband (ABIC)
ABIC, located in Rome, is a unique facility where all Accenture’s digital
TV offerings are available and accessible to broadcasters, providing
the opportunity to try out new technologies in a simulated “real life”
environment. ABIC collaborates with Accenture Technology Labs world-
wide on research, innovation and demo activities.The assets developed
at ABIC are based on best-of-breed solutions, and help to make
Accenture’s Digital TV offering unique in the marketplace.

Transforming Rights Management for High Performance 25

This document is an informed point
of view based on research, opinion
and experience, and should not be
considered as professional advice with
respect to your business.
Copyright © 2010 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
Time for action
In Accenture’s view, now is the
time for broadcasters to innovate
for growth, by transforming their
management of rights for the digital
era—thereby accelerating their
progress towards high performance.
To hear more about how Accenture
can help your business raise its
management of content rights to
a whole new level, please contact:
Time for action
Francesco Venturini
Global Broadcast Industry Lead
comms.and.high.tech@accenture.com
Egidio di Alberto
egidio.di.alberto@accenture.com
Management Consulting CHT
Sara Montani
sara.montani@accenture.com
Technology Consulting CHT
About Accenture
Accenture is a global management
consulting, technology services and
outsourcing company, with more than
176,000 people serving clients in
more than 120 countries. Combining
unparalleled experience, comprehen-
sive capabilities across all industries
and business functions, and extensive
research on the world’s most success-
ful companies, Accenture collaborates
with clients to help them become
high-performance businesses and
governments. The company generated
net revenues of US$21.58 billion for
the fiscal year ended Aug. 31, 2009.
Its home page is www.accenture.com.