We take a look at how publishers can make money licensing their content in the latest of a series exploring different ways to make journalism pay. Previous articles have looked at membership, philanthropy, crowdfunding, newsletter strategies for newsrooms and individual journalists and news aggregators.
While content licensing deals might not generate the impressive sums of money that can be earned through a solid subscription strategy or advertising, ensuring you’re paid for re-use of your content can be a a straightforward way to bring in a steady – and sometimes even growing – source of income.
Recent high-profile content licensing deals with tech platforms such as Google and Facebook have raised the profile of content licensing. But widely-used, long-standing, industry-led mechanisms that allow publishers to be paid when companies republish their news articles on their websites or text aggregators such as Lexis Nexis and Factiva have been around for many years.
“Despite the sums of money that we give to some publishers it is still not that well known within their business what that revenue line is,” says Matt Aspinall, head of publisher partnerships at content licensing and copyright services company, NLA Media Access. “There have been occasions where I’ve talked to publishers and this revenue line from us just gets lost in other bits and pieces within their P&L so it can be a challenge getting to the right stakeholder to promote the wider benefits of the NLA partnership.”
According to NLA which operates under the UK’s copyright law, the number of publishers signed up has grown from around 100 ten years ago to over 500 today. The company is co-owned by seven major UK publishers including Reach, News UK, Guardian and Telegraph.
The amount paid out to publishers has also steadily increased over the years. In 2020 the company which manages publishers’ agreements with over 200,000 businesses and companies and acts as a one-stop shop for relationship management with databases including LexisNexis, Factiva, ProQuest and Thomson Reuters, returned £39m to publishers.
NLA income, while for most publishers a small part of their overall income pie, is according to Aspinall one that has grown.
“Typically, over the years, we're one of the only revenue lines that tends to go up for publishers when there's been difficulties with ad revenue decline and circulation decline,” he says.
Ian Carter, editorial director of Iliffe Media says that licensing its content through Google, Facebook and NLA represents “very significant revenue” for the regional publisher.
“Editorial content revenue is growing quite fast and that is thanks to a couple of deals on the platforms plus an added focus on things like the NLA relationship,” says Carter.
While content licensing can take as little as just watching the money "land in the bank account", particularly for deals managed through licensing bodies, more active management makes licensing more profitable, says Carter.
"If you want to step back and do nothing you can do that and the money comes in but if you want to think about it a bit more carefully and look at what kind of topics are generating the most NLA revenue you can work a lot harder at it," he says.
“It's something that kind of flies under the radar a little bit but it's a good source of sustainable income and you work on it and maximise the money that comes into it.”
Although he says that the company is too early into its Google and Facebook relationships to know yet which content performs best on those platforms, stories involving big brands and tech companies tend to generate the most revenue for Iliffe through its NLA relationship.
But although licensing is part of the all important goal of diversifying revenue, there’s no getting away from the fact that for most publishers it is still relatively small fry. The Press Database and Licensing Network - a trade body for organisations that collect payments for news content from press cuttings agencies and other companies - estimates that licensing probably currently accounts for some 3 to 5% of a news publisher’s income.
Although publishers accounts tend not to list licensing as a separate line, revenues for most companies, non-subscription and non-advertising income sources account for a minority of all income. The Guardian Media Group whose account statements bundle up revenues from licensing with income from philanthropic donations and events in 2021 earned £25m through this combined revenue line - around 11% of total revenue. Telegraph Media Group’s reporting, which similarly consolidates licensing revenue into an 'other' budget line, similarly showed that last year this diverse pot accounted for 6% of revenue.
Licensing deals between publishers and tech platforms, while unlikely to take the sums earned from sharing content to eye-watering new heights for publishers, is however, one other way to make licensing pay.
Last year, after years of resistance to paying for content, Google announced its $1bn News showcase. Carter told Press Gazette that Iliffe’s deal with Google represents the biggest chunk of its licensing income.
Threatened with regulation Facebook has also signed deals with publishers in France, Australia and the UK. The Guardian is among the British newspapers that last year signed up o a programme in which Facebook pays a flat fee to license articles that appear on a dedicated news section on the social media site.
The platform deals however, fall far short of a fair licensing agreement, wrote Press Database and Licensing Network secretary, Andrew Hughes in Press Gazette. Using other global licensing agreements as a benchmark, the tech giants in his view should be paying news publishers at least $2bn a year. Google’s current deals pays thousands of publishers £333m a year between them.
Iliffe Media, which recently expanded its agreement with Google beyond its Kent titles, says that publishers need to make sure that licensing deals with the platforms are beneficial for the industry. While he says the publisher is content with its deals with the big platforms, smaller regional titles have either been cut out of deals entirely or have struggled to get a fair cut.
“What we need to do is make sure it's a beneficial arrangement. We're not interested in seeing it as some kind of payoff to keep us quiet. We need to make sure it works for us and Facebook and that's where the attention is now lying for us.
“If this is going to be a sustainable method of helping ensure journalism has a future it has to be open to all credible publishers.”
Iliffe which is also looking into licensing content to Microsoft, says that being open-minded is increasingly important for publishing businesses to thrive.
“It's increasingly important to be very open-minded and look at the landscape and accept that your revenue is going to come from multiple streams in the future. It's a world away from advertising and editorial. We have to think commercially and we have to make our journalists completely aware of the value of the stuff they’re generating.”