Note to Publishers on Exclusive Licensing

Here are some facts about the Media Monitoring and Evaluation (MME) marketplace: All MME companies are currently accessing your content. These companies cannot stay in business without your content. The majority of the more than 300 MMEs worldwide do not support U.S. copyright. They pay no royalties to U.S. publishers.

Given that such is the case, you will want to license your content through reputable MMEs or aggregators that will work to convert the market. And you will want to receive maximum compensation in the form of royalties.

Now, there are currently certain MMEs and aggregators seeking exclusive rights to your content. Their purpose is to gain market advantage, not to maximize your royalty revenue. There are four basic reasons this is bad for your business:

Number 1: Limiting the licensing of your content will limit usage and resultant revenue from the market. It would be nearly impossible for any licensee to warrant enough revenue for an exclusive to reflect the full potential of your content in the market.

Number 2: One grantee would not have the resources and market expertise to be able to uncover unlicensed use. Even if such was discovered, the grantee would not have legal standing and thus you would have to commit resources to police the unauthorized use. From experience, I can tell you the reality is quite different from the sales pitch. I have seen and reported to you over the past seven years many, many incidences of infringing activity and there has been little or no sustained resource allocation to address it.

Number 3: By signing an exclusive agreement, you would be penalizing compliant MMEs, which are in the vast minority and instead deserve your support. The majority of MMEs are currently avoiding the cost of compliance and will continue to do so. They will continue to find workarounds to access your content without you even being aware of their actions.

Number 4: This relates to potential liability stemming from the Sherman Act, Part 2. Simply put, if by granting an exclusive to an MME or aggregator you deny access to your content by a competitor of the grantee, you are exerting market force or enabling it if the MME or aggregator creates unreasonable barriers for its competitors to access the content.

In short: Giving any MME or aggregator an exclusive sharply reduces your revenue potential (although it may seem like a good deal at the outset), dramatically subverts enforcement of copyright compliance in the marketplace and opens you up to antitrust liability.

Onward,

Dan Schaible