The licensing of IP — also Intellectual Property — through the Aggregion platform is a process of sharing the right of distributing, selling or using IP with a third party, governed by the conditions specified by the copyright holder. Most common types of IP are digital products such as video, ebooks, music, software, interactive SaaS platforms, games, and others. IP licensing is a B2B2C process: it begins between business participants before reaching the end customer. Within the Aggregion platform the licensing end-to-end chain is seamless: all participants operate within the same environment and thus the system can enforce licensing conditions for all participants, including the end users.
Our vision for Aggregion is ambitious, but simple: a universal license processing platform that allows all business participants (copyright holders, distributors, channels, and end customers) to seamlessly interact within a single trusted environment. The idea is similar to the Visa/Mastercard model, except Aggregion primary area of focus is on licenses, rights and rules, not money. Aggregion is developing the back-end capable of providing the technology, network and governance for any type of licensing transactions, and integrating any external systems via API as needed.
But why do enterprises need Aggregion? Can they not do this directly? They can, at least in theory. Just the same as any bank can have a direct relationship with about a hundred million of Points of Sale worldwide, both online and retail. In theory. In practice it is the Visa/Mastercard model that makes it possible for you, the consumer, to make purchases with your card, issued by any bank, at practically any store in the world. We will be doing the same thing for licensing, globally.
Unlike physical goods, the digital products are intangible: not sold to own, instead they are licensed — rented out — under specific conditions. And the trillion-dollar question is: how does a copyright holder control licensing of digital products through vast and rapidly changing stretches of business participants, their IT landscapes, sales channels, and end customers. The issue scales up in complexity for major copyright holders: consider, for instance, that The Walt Disney Company operates in 160+ countries.
The problem being solved is three-fold:
A typical global content distribution relies on paper-based processes and highly fragmented IT landscapes: multiple legacy or in-house IT systems, business applications, databases, Excel spreadsheets, and external systems. Multiple employees (as many as 10 within the copyright holder organizational unit of medium complexity) are involved in processing of a single license. Establishing a new distribution chain takes months. Up to 25% of operational costs can be attributed to inefficient licensing processes. The current process works, but, in the rapidly changing world, unnecessary complexity leads to loss of competitive edge.
Knowledge is power, and the fragmented world of traditional distribution provides little of it. In existing models, each sales channel prepares a report of some kind (mostly in Excel), in arbitrary format, level of detail, and time frame. Significant time is spent on manual consolidation into a single format and input of data into a myriad of Enterprise IT systems (Analytics, ERP, Financial, Line of Business). There are no real-time analytics or insight. Are the products selling well and the price should go up? Are they performing poorly, and discounts should be provided?
In the existing distribution model, copyright holders lose direct control of their content as soon as it’s shipped (physically, stored on hard drives) to the first distributor in the chain. In an extreme case, there is no way, other than legal action, for a copyright holder to revoke a licensing right when the terms are not being followed. Any change in licensing conditions launches an arduous backtracking process. There is no way to verify the sales performance or ensure the compliance of licensing conditions. All of these uncertainties make copyright holders extra careful in the selection of distributors and channels, thus limiting opportunities to reach new markets.
Main participants of a licensing chain will most likely fall into one of the following four categories:
Copyright holders own the right to products. They are usually companies (publishers, labels, etc) and not necessarily are the actual authors of the products. Copyright holders are licensors and have legal rights to license the products at their discretion.
Intermediaries are the B2B middleman companies between the copyright holders and channels. In many cases they are distributors, but not necessarily. In the legacy licensing models, especially one involving physical goods, intermediaries were indispensable as trusted partners and experts in local markets. As the Aggregion model resolves the issue of trust and transparency, it enables copyright holders to go directly to local markets using a common licensing standard, diminishing the importance of intermediaries.
Channels are the B2C outlets that reach end customers with products. An online store such as iTunes is a classic example, but, through Aggregion, channels may also include retail stores or telecom or airlines, or education institutions or hardware and device vendors, or any other business scenario or model. Channels are customer facing entities and are the last business participant in the chain before the end customer.
End customers, also end users, are on the receiving end of digital product licensing chain. The resulting smart contract is created between the copyright holder and the end customer, enforcing the content usage conditions on customer’s device.
In simple terms, a business scenario describes the specific case of the means and conditions upon which a digital product reaches end customer. For instance, it could be a scenario where subscribers of a telecom company receive free access to movies from a prominent film studio as part of a promotional campaign. Flexible architecture of Aggregion platform allows to design any types of scenarios and integrate any external systems as necessary. Some of the scenarios currently implemented through Aggregion platform can found at the Use Cases page.