Choosing the Right Royalty Software: Subrights Management
Generally speaking, primary rights include only those rights the publisher specifically intends to use, normally including the book publication rights for the original hard or soft cover edition and paperback reprint rights.
On the other hand, subsidiary rights – those rights that are subsidiary to the right of publishing the literary work in book form – can constitute a valuable percentage of the revenue opportunity of a book. Subrights can include electronic rights, motion picture and television rights, audio book rights, audiovisual rights, merchandising rights and dramatic or performance rights, plus foreign translation rights, serialization rights, book club rights, and the rights for special editions.
Indeed, considering the global scope and multiplicity of platforms, publishing houses often have personnel dedicated specifically to this area. Managing subrights can require:
- Sending manuscripts, proposals, and books to foreign publishers and agents, audio houses, and paperback publishers
- Coordinating co-productions with other publishers and audio houses
- Working with book clubs and sales for special editions
- Maintaining relationships with other publishers
- Attending book fairs worldwide
- Managing subrights agreements
- Collection of Royalties
Many of these duties can be facilitated by a quality rights management system. Still, given how much potential revenue is represented by products within the subrights realm, integrating subrights management into your overall royalty accounting system is critical to staying competitive and being prepared for growth.
Not every royalty accounting software system can effectively accommodate all of the idiosyncrasies of subright management. Your own requirements for managing subrights within your overall royalty accounting structure will vary – some publishers will be focused on selling rights for foreign translations, while others may be focused strictly on merchandising tie-ins.
For our purposes, I’ve listed some of the general areas of functionality you will want to look for in any rights management system, to ensure it can support your control and sales of subrights. Your checklist of questions to ask about a system’s ability to manage subrights, whether standalone or part of a royalty management system, should include:
- Separation/Tracking of exclusive (e.g. rights) and non-exclusive (e.g. permission)
- Ability to manage rights by:
Country
Language
Type of Right
Frequency
- Ability to manage receipts of subright statements and royalty payments, and to:
Create dunning/chase letters
Create reports identifying past due and upcoming receipts
Track earnings against advances
Track taxes and commissions
- Ability to store detailed contract info
- Accommodation of unlimited rights (Country, Type, etc)
- Accommodation of unlimited contract complexity, including:
Escalators (aka sliding scales)
Varying payout criteria for any type of right
-Flat Rate per Unit
-Percentage of Sales
- Protection against selling rights for which you don’t own the rights
Accounting System Integration
- Ability to transmit subright transactions and accruals to virtually any general ledger (GL) system
- Ability to generate key reports that tie to GL
- Ability to transmit payments to AP
Subright Statements
- Ability to customize statements to any level of detail
In the most basic sense, your ideal subright management solution is a tool that enables you to manage your subsidiary rights agreements, and carefully monitor the receipt of payments from third party licensees – and that links directly into your rights management system.
Royalty software that includes all of the above listed functions will be able to directly link all royalty accounting aspects of your subrights agreements to your royalty software, and automatically calculate payouts to royalty recipients based on the rules in the contract. As stated earlier, a suite of subrights agreements can’t be managed by software alone, but by integrating the accounting functions of your subrights contracts, you can drastically boost efficiency and accuracy, thereby reducing costs.
