55. The Structure, Function, and Operations of Intellectual Property Service Providers
B. Methods of Operation (continued)
Other Operational Issues
1. Managing specific rights. Service providers rarely manage all the rights associated with an intellectual property; they focus instead on a bundle of rights determined by rightsholder and user needs, markets, and the objectives of the provider. The music collectives, for example, administer only the nondramatic performance rights of their members musical work because these are small rights with a large market that cannot be administered effectively by individual rightsholders. The grand rights for dramatic performances (which are rarer and more commercially lucrative) are licensed directly from the rights owner. Mechanical, synchronization, and electrical transcription rights require more individual negotiation, and thus are licensed either directly or through an intermediary agent.
The rights managed by some service providers are very narrowly defined. The Publication Rights Clearinghouse administers only the electronic reuse rights of its members works because the first-use rights are managed by publishers or literary agents. The Authors Registry, which is still in a formative phase, is structuring itself to manage reprographic, electronic, and multimedia rights, and other forms of reuse or extrause (i.e., beyond first use) rights for written works. Because service providers administer only a select group of rights, rightsholders may find they need to employ a strategy for intellectual property management that includes a number of service providers overseeing separate groups of rights, and perhaps some direct licensing between the rightsholder and user as well.
2. Markets and marketing. Access to markets and marketing strategies is one of the many reasons rightsholders partner with service providers. Providers have better knowledge of user markets and have systems in place for reaching those markets that rightsholders do not have the means to develop. But providers target only markets consistent with their organizational goals, which may or may not include markets that a rightsholder wishes to address. Stock photography agencies have traditionally focused on marketing their images to the publishing and advertising industries. Of late, the educational market is receiving considerable attention from journal publishers, resulting in projects like JSTOR and Project Muse (which provides networked access to journals), and from the museum community, resulting in initiatives such as AMICO and MDLC.
A key assumption held by rightsholders and intellectual property service providers is that markets are expanding at a tremendous rate because of electronic networks. Service providers are responding accordingly by using (and relying on) these networks to reach international audiences and enlarge their marketing channels. Those organizations that serviced the "trade only" are moving toward a more open policy of allowing anyone to access their repertoire databases. Contracts are being developed that allow for the legal use of images, music, and graphic arts on Web sites. The availability of new online markets is undoubtedly contributing to providers expansion of services and the move toward administering intellectual property from several different genres.
A providers goals and objectives most frequently drive its marketing strategy, but other variables (e.g., founding organizations, collaborators, tradition) have an impact as well. Image Directory is using the marketing powers of its parent company, Academic Press, to promote its product and services. Stock photography agencies and other image providers have traditionally used print catalogs of selected works from their repertoires as a marketing device. They are continuing this tradition in the electronic world by publishing these catalogs on CD-ROM rather than in print. More and more service providers are collaborating with other groups to market their materials jointly (e.g., Picture Network International, a large stock photography agency composed of smaller stock agencies) or to expand their marketing reach through relationships with their third-party distributors (which develop their own marketing for the service providers product).
The types of materials service providers use in their marketing strategy range from traditional brochures, pamphlets, and other print literature to more interactive Web sites and sample CD-ROMS. Community outreach workshops and a display presence at conferences are common ways for service providers to engage the interest of both rightsholder and user communities. Of late, service providers are offering free access to their repertoires for a limited time period as a way to introduce their offerings to rightsholders and users.
Marketing is important to all parties in an intellectual property management relationship, albeit for differing reasons. From a service providers perspective, it is the primary way to gain new and renewed business. For rightsholders who have entered into an agreement with a provider, marketing strategies affect how much their intellectual property is used and who uses it. For users, marketing provides information on a content source and the means for legally procuring it.
But marketing is an odd mix of education and promotion, which calls into question its reliability as an objective representation of information. Because marketing is so vital to all the key players in the intellectual property rights management arena, a service providers marketing strategy is an important factor for consideration. Rightsholders in particular must determine whether a providers marketing will generate the results they anticipate. A rightsholder must also decide whether the providers marketing strategy is compatible with their individual or institutional ethos. A strategy that aggressively pursues a direction with which the rightsholding organization is not comfortable is certain to bring on conflict and difficulties in the service provider/rightsholder relationship.
3. International administration. Foreign markets present an interesting problem for service providers. The impracticality of keeping abreast with every national and international copyright law, and the inability to administer their members rights in every country, has led providers to develop reciprocal agreements with similar agencies in foreign countries to manage their members rights in those countries. Works by artists represented by VAGA (the Visual Artists and Galleries Association), for example, are protected in France by ADAGP (Societé des Auteurs des Arts Graphiques), and vice versa.26 Uses are negotiated and royalties are collected and sent back to the "home" provider, which usually takes a commission or a percentage of the royalty for handling the transaction, as does the affiliate.
Some providers have an extensive network of agreements with foreign organizations (e.g., ASCAP has agreements with more than forty-five foreign affiliates). As electronic networks extend access to global audiences and render geographical boundaries irrelevant, and as copyright in the digital realm is debated and negotiated on an international stage, the nature and extent of these relationships are certain to change in response.
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5: The Structure, Function and Operation of Intellectual Property Service Providers |
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| A. Formation and Development | |
| Notes | |