January 2004 

Questions

Our clients are continually asking us to license our training content to them. The clients want to deliver the training themselves, as many times and to as many students as they wish. Are there any pricing models/best practices that would help us to fairly price and license our content?

Answer

There are many variables that you need to consider in creating a licensing arrangement for your content. Does this fit with your business model? Do you feel you need to control how your content gets delivered? Is it so closely tied to your brand that you feel this is risky to "let it out of
the door? Pricing models vary greatly, but first and foremost you need to look at how this approach works with your current pricing structure. You need to set up an approach that aligns well with your delivery pricing model in a coherent way. You can price per participant (difficult to audit and monitor) or give them a per year with a target number of participants, or charge them a "lifetime" flat price (the most difficult to calculate and often the priciest). You can think about what the cost would be for them to develop such a program as well as what alternatives they might look at and those costs for more context.

DO include in your deal:

1. A written agreement- this is a transaction that involves your intellectual property and deserves a legal agreement. It can cost you some dollars to get legal advice or develop your own, but it will save you in the long run--they typically have a legal team that will watch out for their interests only. Make sure the contract is non transferable and that trainers may only use this materials in the context of this program, for this company etc. Also, define what state laws govern the contract? Often your state will be easier and less expensive for your attorney.

2. Quality Control- How will trainers be trained and monitored? Who will be using your material. Will they need updates? 

3. Copyrights- Clarify that your content must not be changed or modified without your approval. Your copyrights must always be on the content-be careful to read over any contracts carefully. Many boilerplate corporate contracts assume the corporation will own the content.

4. International- Clarify where this content will be delivered, if they have the right to translate it (if so you should request copies of all translations for your files) and how they will deal with trainer training if non-English speaking trainers will be part of the plan.

5. Details- Think through and clarify in writing what exactly is included in their right to use and what isn't, what they can produce and cannot produce. Perhaps you have a job aid that is used in this program that you sell and produce as a separate product. You will want to be very clear
about each and every detail associated with your training.

6. What happens if things go wrong-Clarify who is your main point of contact should issues arise around quality control copyright infringement etc. AND how that affects your contract.

7. Reporting and Audits- If this is a per participant deal, how often will you receive reports and how can you ensure the accuracy of those reports?

8. Payment- How frequently will you be compensated if this is a per participant deal.

In general, think through how comfortable you are with someone else delivering your content. What will you need to contractualize to feel good about the deal? Licensing can be a great way to create ongoing revenue, but you need to think it through before jumping in. Finally get a copy (and read) of Elaine's book, The Legal Guide to Consulting!

Ann Herrmann-Nehdi, CEO
Herrmann International
The Business of Thinking
ann@hbdi.com      http://www.hbdi.com/