When it comes to secondary rights, the UK is maintaining a culture of inequality, says the recent Missing Opportunities in Digital Britain report from Compact Media Group. Here, James Sellar, head of media and business development at Compact, explains further.
Secondary rights derived off a primary broadcast for the controlling party are now an established (and growing!) revenue stream. Like any revenue stream it needs to be carefully monitored to exploit to its full potential.
These rights have become one of the cornerstones for many companies to hold assets which they could monetize/capitalize on to expand their organizations. Despite this, the UK still lags behind many territories around the world – and in particular its European neighbors.
The issue of fair recompense for rights owners for the retransmission of Free-To-Air programming on cable and satellite operators is accepted pretty much throughout the EU. These revenues are particularly significant for those companies to help create programming for their domestic market. Compact’s Missing Opportunities in Digital Britain report estimates that €478m has been raised for the producers/distributors between 2002-06 – with the UK contributing exactly zero to the collective pot for rights holders.
It is important to note that UK companies (producers or distributors) do receive revenues from overseas yet the inequality in our own territory needs examination. Growing steadily over the years these monies now represent an important revenue stream for those with domestic and international aspirations.
Whether the industry decides that a similar mechanism to other territories is the way forward is open to debate – it is a particularly complicated issue given our current laws and the status quo. However, our call for an OFCOM review is timely and long overdue.
Similarly, there can be little doubt that the proliferation of PVR (personal video recorders) devices is soon to reach a tipping point within the next three years. The increase in the number of homes that subscribe to SKY+, Virgin cable services or BT Vision or those that have combined DVD Recorders (with hard disc) is well known. Technology firms have helped facilitate the demise of the DVD markets (in terms of revenue) for rights holders, yet their parent companies have flourished in direct contrast to the majority of rights holders over a similar period.
Our report shows that the revenues for “re-use” across 22 territories in Europe equated to €2.6 billion between 2004-08. Whilst the mechanism for the calculations and application varies between territories, the goal of the various collective management for these revenues does not – again with the notable exception of UK… the bête noire of the European community.
With considerable concerns over the economy still prescient – especially for those in the creative industries – the associated rights afforded to IP can provide the necessary protection for owners to weather an economic downturn in terms of decreased budgets and fewer commissions. Is it not time, especially against the backdrop of the Digital Economy Bill, for the UK to examine the wider rights landscape under an oft-promised OFCOM review for the benefit of creators and rights holders before it’s too late?
Compact Media Group is an international independent rights administrator and distributor of royalties.