Information IP is what you know or do. It’s a niche market business that’s defined by what type of knowledge you are offering.
Most information IP is protected under a copyright. In some cases, it’s a trade secret or know-how that’s protected as confidential information. Other types of information IP are intangible services, such as consulting or seminars. Your information is valuable is it solves a big problem or helps customers do something faster, cheaper or better. It’s a flexible IP that can be licensed in many different formats and uses.
There are several categories of information IP:
- Learning information focuses on teaching about something, such as business, finance or entertainment.
- Performance information focus on improving something, such as sales or productivity.
- How-to information focuses on how something is used or done to produce or improve something else, such as software to create video games.
- Sensation information focuses on experiences of the senses, such as the taste of restaurant foods, or the excitement of an amusement park rides.
The first step is to make sure you’ve evaluated all the different ways you can license out the rights. You can divide the rights in a number of different ways. These include different formats (e.g. e-books, CDs, or DVD), sales channels (e.g. direct to customer, on-line retailers), and territories or markets (e.g. domestic or international).
You next step is to decide the best licensing strategy. There are three options, but keep mind that one size doesn’t fit all. You can use one or more of these strategies simultaneously with multiple licensing partners:
- Resale License gives you the right to sell information but not to reproduce it — in other words, to take orders. In this case, the IP owner typically fills all the orders and provides the customer support. This is more of a revenue sharing license, where the licensee, as a re-seller, receives 50% of the sales price. One example is market research reports, which are often sold through online re-sellers such as MarketResearch.com and Research and Markets.com.
- Reprint or Reproduction license gives the license holder the right to reprint or reproduce the information. These terms are used interchangeably, and you often find this type of license for on-line articles and for audio products. Royalty fees may be based on buying a master copy of the information and / or a percentage of revenues from copies sold. A good example is magazine publishers who re-purpose their content for sale after it publishes, through reprints and licensing agreements. Content licensing companies, such as the Copyright Clearance Center (CCC), Wrights Reprints, and YGS Group offer turnkey content reprint licensing programs for all types of publishers and information providers.
- Master License gives you all rights to reprint and sell the information. Royalties are a combination of fixed fees and a percentage of royalties from sales. The master license provides you several ways to make money including reselling the basic resale rights, selling reprints, and repackaging the information to offer it in different formats or bundling it with other information products.
Don’t make the mistake of overlooking non traditional formats or applications. Some of these include licensing it as part of another program, compilation or continuity series, translated into different languages, or offered as a premium to sell other products. One of my clients converted parts of their consulting services into training courses, and licensed them directly to his clients for their own internal training programs.
Licensing is a shortcut to increasing revenues from your information IP. It’s faster than trying to build your own sales channels, and you can leverage more revenue sources than selling a single information product or service.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid’s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges, and startup events. He’s a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.