I have two companies that have interest in licensing my business's content (training materials). I want to offer exclusive and non-exclusive pricing options, maintenance fees (for annual updates), and I will specify types of use (to avoid channel conflict).
But I am struggling with pricing. Also, I know enough to know that there are probably considerations I am totally missing.
I'd love to hear from anyone who has experience licensing content--what were important points in the contract? How did you set the price? Any regrets?
Also, of the 2 companies, one has potential to become a more strategic partner going forward.
From experience, I have leaned that one can really cut off interest by setting the price too high, on the other hand, one can get stuck with lower prices than you should have if you start too low. Therefore, I would try to negociate pricing with the least interesting customer (for you), first. This way you will develop some crucial experience with how they perceive the pricing before you talk to the (potentially) strategic partner.
When in a similar situation, I was told by a professional - 'start high, you can always negotiate lower. You can't negotiate a higher price after you gave a lower one'. If your buyer automatically accepts your first price, make it higher for the next.
Generally speaking, a high starting place in negotiation leads to a higher ultimate price. Though I think David's answer is a good practical approach. However, as far as negotiating terms, I would promptly hire a business lawyer.
The answers to your questions are going to be evaluated on a case-by-case basis. For example, allowing one company's employees to view your materials one time is a different model from allowing the company's employees ACCESS to some kind of repository where you keep the training materials. Even more complex is where a party, for example the strategic partner, might license your content to promote it to the general public. What are you training people to do? What are the liabilities involved? And who's responsible if there's a problem? What if someone steals your content, and puts it up on a third party site? Who enforces the copyright?
And have you registered the copyright?
I'm scratching the surface here. But I think you see my point. Do you have a lawyer?
Start by understanding their business. With two interested parties, you have an opportunity to get a couple of views.
My pricing mantra is this:
The right price is the highest effective priceIn this case, that's going to be (for each prospective partner) a price that allows them to make money by doing what they do well (presumably disseminating, or re-selling third party content) while maximising your reward as the originator.
You're thinking in the right terms as you consider the role of practical or contractual exclusivity etc. For me, I would always start by looking at pricing for non-exclusive use. That improves your chances of a 'same side of the table' conversation.
E.g. "We only work with exclusive content" - well, now it's all about arm-wrestling the price
If you start with pricing that you can show works for all parties non-exclusively, then that additional value for the partner is something you can negotiate in exchange for some blend of