A Licensing Contract defines relationships between Sellers and Buyers, from commercial rules to operations ones, regarding a list of Contents.
Licensing models
Content monetization is based on different kinds of Business models. Most usual in the entertainment industry are:
Free to Air - Terrestrial / Free to Air or standard linear broadcast TV. Ad-Supported or free access. Typically, free-to-access linear channels broadcast in clear (unencrypted) form;
Pay TV - Premium and/or subscription-based linear television services delivered to paying subscribers;
SVOD - Video on Demand service provided to paying subscribers, typically delivered over the Internet. For a fixed, recurring fee, subscribers may have unlimited streaming to a licensed catalog of content for the duration of their active subscription term;
AVOD - Video on Demand service provided to viewers free of charge, monetized by advertising, typically delivered over the Internet;
TVOD - "Transactional" Video on Demand, a digital rental for a specified viewing period (24 or 48 hours);
EST (Electronic Sell Through) - Buy/Download to Own, the ability of the purchaser to consume without limitation;
Transport - Screening directly to an audience in planes, trains, buses, taxis, cruise liners or any other means of transportation. Can be Linear or Video on Demand.
Choosing a business model
When Sellers/Buyers agree on a transaction, they create a Licensing deal, described by:
Title (ex: “deal with Game of thrones”);
A list of Contents;
Some Operational Conditions:
A list of territories (countries) they agree on (ex: France, UK, USA);
A start and end date/time of validity of the contract;
A list of devices (screens) allowed to use to watch the contents on (ex: tablet, tv, desktop);
Some Business Conditions (only one active per contract):
The business model to use: each model has different conditions described as follow:
FTA:
A flat rate: a fixed amount of money paid, once off, at contract signature;
Pay TV:
A flat rate (optional): a fixed amount of money paid, once off, at contract signature;
Revenue per subscriber: how much money should be paid back by Buyer for every subscriber to its service (a % of net income);
EST:
A flat rate (optional): a fixed amount of money paid, once off, at contract signature;
Revenue per transaction: how much money should be paid back by Buyer for every purchased made by end users;
Maximum of sell (Optional): max number of time (contract validity) a content can be sold);
TVOD:
A flat rate (optional): a fixed amount of money paid, once off, at contract signature;
Revenue per transaction: how much money should be paid back by Buyer for every purchase made by end-users;
Maximum of rerun (Optional): max number of time (contract validity) a content can be rent);
SVOD:
A flat rate (optional): a fixed amount of money paid, once off, at contract signature;
Revenue per minute viewed: how much money should be paid back by Buyer for every minute watched by end-users;
Or Revenue per viewer count: how much money should be paid back by Buyer for every unique viewing session (a session has a minimum duration of 5s, 30s or 60s to be counted in);
Maximum of rerun (Optional): max number of time (contract validity) content can be watched);
AVOD:
A flat rate (optional): a fixed amount of money paid, once off, at contract signature;
Or Revenue per Ad served: how much money should be paid back by Buyer for every advertisement served when content is streamed;
Or Revenue per minute viewed: how much money should be paid back by Buyer for every minute watched by the end user;
Or Revenue per viewer count: how much money should be paid back by Buyer for every unique viewing session (a session has a minimum duration of 5s, 30s or 60s to be counted in);
Minimum Guaranteed (optional): for each business model based on fixed results (number of viewing, rental, ads served, etc.) this extra condition can be added. It guarantees a minimum monthly fee whatever the performance-based revenues are.
If we set an MG of 500€ for an SVOD with counting views making only 375€ then 500€ will be billed. If revenue is 721€ then it’s bigger than the MG and the full amount of 721€ is billed.