How are royalties calculated?

It’s tricky enough to place a value on a piece of content at the commissioning stage, let alone setting a fair price for it to be syndicated or licensed for copying.

When it comes to secondary licensing – the business of agencies such as NLA media access – the calculations are complex. An organisation may come to them wanting to make copies from newspaper or magazine titles as diverse as Moneyfacts, Mining Today or Marie Claire. They may want occasional copies or frequent coverage – to be shared in a tiny office, or across a global network of employees.

How does the NLA set a price for its licences?

Neil O’Brien, Commercial Director, NLA media access explains:

“Pricing has to strike a balance between fairness – to users and publishers – and simplicity.  These often conflict, and where they do simplicity is the most important. Pricing has to be workable. The NLA’s approach is helped by the fact that most news copies are made as part of media monitoring services, which are regular and easy to measure.  We charge a basic fee for occasional copying based on headcount or turnover and number of titles, then add further fees for other copying based on a short survey to determine an annual figure”.

What’s so good about NLA pricing?

NLA charges relate very directly to the amount of copying, which everyone accepts is fair. The fact we measure copying by users and research houses very thoroughly and frequently means that we can share revenue fairly between publishers.

Pricing has to strike a balance between fairness – to users and publishers – and simplicity. 

How are royalties back to publishers calculated?

We’re not in the position where we’re able to track the individual views, sharing and distribution of articles – so to calculate returns to publishers, various methods are used. These typically comprise client record-keeping, questionnaires and media monitoring agency data.

NLA media access surveys all users annually to determine their fees, and also receives monthly reports from its media monitoring agency clients – more frequent than the norm. NLA believes this gives a more accurate and timely record for pricing and royalty sharing. The process is explained in more detail in the our Code of Conduct.

Why is this important?

It’s the best way – so far – of measuring which titles are being copied, and of ensuring publishers are paid fairly for their material. It’s important for both licensees and publishers that content usage is being accurately and transparently reported.

With licensees reassured that they’re paying a fair price for copying magazine content, they’ll value it appropriately. Publishers also get extra revenue.

If you’d like to know more about licensing magazine content – either as a publisher or as a copier (or perhaps both) – then get in touch with us [email protected]. We’d love to hear from you.