Five myths about royalty management that hold your publishing business back

Have you considered how royalty management is a strategic asset for your business? If you haven’t, it may be that you’re succumbing to some long lived myths about royalty management – myths that in fact hold back your publishing business.

We see how these myths sometimes lead to less strategic investment in digital royalty and rights solutions. Ultimately, lack of investment in this area prevents publishers from scaling their business operations without significantly increasing administrative costs, or worse – they end up delivering poorer quality, they risk their reputation, and are unable to negotiate agreements and keep up with the market or with compliance demands.

Let’s dive in and see if you recognise some of these myths from your own publishing business. We would love to talk to you and show you how we can get you started or move you further along with digitalisation and automation of your publishing business.

Myth 1: Royalty management is primarily about accounting

Not quite. Royalty management significantly influences business decisions and author satisfaction. In a publishing business, no matter what size, royalty management should be a corner stone.

While accounting is a significant part of royalty management, it is also about maintaining author relations. It is about contractual compliance, strategic financial planning, data management, rights administration, and reporting.

If you are not on top of royalty agreements and settlements, you lose credibility in your market – and what’s more, an efficient royalty solution gives you the freedom to negotiate good agreements and vastly improves your chances of success.

Myth 2: Manual systems are adequate for small publishers

We find this not to be true. Even small publishers can benefit significantly from automated royalty management systems. The myth that manual tracking, spreadsheets, or homegrown tools are sufficient leads to errors and inefficiencies for many publishers.

Automated systems not only reduce the likelihood of errors but also save time and improve accuracy, even for publishers with fewer titles.

Myth 3: Royalty software is too expensive

There is a misconception that royalty management software is prohibitively expensive and only viable for large publishers. In reality, scalable solutions are available for budgets of all sizes. You can choose a basic version to get you started and then expand it as you grow.

Investing in robust and future-proof royalty software means long-term savings and efficiency gains, and makes it easier to uphold compliance and fulfil regulative requirements.

Myth 4: Royalties are only about cutting a percentage split

Royalties are much more complex than just paying authors a percentage of the sales. Royalty management involves multiple formats (print, e-books, audiobooks, etc.), sub-licensing agreements, other revenue streams such as merchandise, or handling multiple sales channels.

Understanding and managing these diverse income sources under different contractual terms are crucial operational tasks in publishing. It is very important to get it right if you want to keep your good reputation in the market, develop your publishing business, and increase your profits.

Myth 5: Royalty tools are set-and-forget systems

A common misunderstanding is that a royalty management tool requires little or no ongoing monitoring. This is one of the reasons why many smaller publishers try to build their own tool.

The reality is that the landscape of publishing evolves fast. It is influenced by new agreement types, the emergence of new digital platforms, new sales channels, changes in copyright laws, and shifts in market trends.

This dynamic environment calls for a robust and adaptable royalty management system. Regular updates and active management are crucial for accommodating new contract terms, entering new markets, and adding new revenue streams. Without proactive monitoring, publishers risk making errors that may lead to financial discrepancies and strained author relationships.

If you want inspiration for royalty management and automation of your business operations, take a look at our Royalty & Rights Professional Edition. One size does not fit all. With Schilling Professional Edition you can choose how much in a royalty management system you need to satisfy your specific business requirements.