55. The Structure, Function, and Operations of Intellectual Property Service Providers
A. Formation and Development (continued)
Size and Scale
The size and scale of a service provider’s operations can be gauged from several parameters. Two important indicators are size of repertoire (the collection of works represented by the service provider), and the number of rightsholders represented, although both these factors must be considered in the context of a particular industry. In the music sector, for example, the repertoires contain millions of works and represent the creative efforts of hundreds of thousands of rightsholders.4 However, only three service providers manage performing rights for the entire U.S. music industry, and each of them has had more than sixty years to build up their representation.
Newer service providers have smaller repertoires and fewer rightsholders because of their short time in the market. However, even new providers can grow very quickly by pursuing an aggressive acquisition strategy that targets rightsholders with a large volume of intellectual property. Corbis Corporation, for example, enlarged its repertoire overnight from one million to sixteen million images with its 1995 purchase of the Bettmann Archive. Resource consolidation can also result in rapid growth for new providers. Several stock photography and film service providers are taking advantage of electronic networks to consolidate their services (through mergers or collaborations) and offer them jointly over the Internet (e.g., Picture Network International (PNI) and FOOTAGE.net). These efforts result in "virtual content warehouses"5 with expanded repertoires containing intellectual property from several agencies.
Repertoire size and rightsholder numbers must also be viewed in the context of other issues such as the nature of the content being represented; the philosophy and mission of the service provider; the length of time in business; the number of competing organizations within an industry; and the way a provider has positioned itself in an industry. Providers with small repertoires and few rightsholders may have very high standards and selection criteria that reflect a level of quality or specialization not offered by a larger provider in the same industry. For example, SESAC, the smallest of the music industry service providers, reported having only 2,300 rightsholder members in 1997 (compared with 75,000 in ASCAP), but SESAC maintains that "smallness" is part of its strategy. SESAC has a selective membership process that emphasizes high-quality works, and the organization contends that its size allows it to offer more personalized services to rightsholders.6
Staffing information offers another indication of the size and scale of operations. Organizational charts and employee titles reveal much about the placement of resources and priorities. Older and larger providers typically have a "corporate" organizational profile, with Chief Executive and Operating Officers, Legal Counsel, Marketing, Member Services Departments, Licensing Divisions, etc. Smaller and newly emerging providers are more loosely structured, with each staff member performing a number of administrative and organizational duties. Providers that have emerged as a result of collaborations among several organizations may "borrow" staff from their collaborating partners.
The nature of an industry sometimes determines the types of professionals or specialists on staff. Providers of visual imagery have a cadre of researchers or photo editors to assist users in finding materials in their repertoires. Electronic journal projects are likely to involve publishers and librarians. Providers of graphic art have professional artists or designers on staff who both acquire and create content for the provider.
History and Startup Relationships