Why Architects Are Entitled to Royalties, and The Cost of Corporate Piracy - Part 1

As the firm owner and architect of record, you designed it and documented it. You are the author and it is legally your intellectual property. Like any other author, artist, or song writer, you may have been contracted to produce it, but you still own the copyrights.

Construction data companies are independently re-publishing and reselling your intellectual property without your written consent or any compensation to you. It would appear we’re okay with that. I’m going to try and make the case that we shouldn't be.

Recording artists refused to put up with Napster, and you shouldn't put up with major corporations that behave like Napster. With all the subscribers that pay these data services to gain access to your construction documents and the information they contain; they can and should pay you a few points for republishing your intellectual property.

They refer to themselves as “news agencies” and “reporters.” Are they just trying to scoop the competition? What’s their news? What’s their “breaking story”? It’s that you’ll be putting a project out to bid, and it will be so many square feet, used for something, it’s made of-this-and that, has a budget of so many dollars, will be located somewhere, that you are the architect, and this is your contact information.

Fair enough, I suppose you could call that news. A “reporter” called you wanting a scoop and you gave it to them. But is that the real story? I don’t think so. That's like the opening 10 seconds of the evening news. It’s little more than a headline, a prologue, or a teaser to help sell the actual story.

The actual story is told between the pages of your drawings and specifications. You are the writer, author, and owner of that story, not them, and not your client. They are hyping the basic project data/information as news to promote the sale of your story – the one you wrote. They do it because there is lots of profit in its sale, derived in many forms. They are collecting and keeping all the proceeds from the sale of your intellectual property to their subscribers and clients.

Based on the early leads you provided to them, big name Building Product Manufacturers dispatch sales reps to your office in the hope of influencing you.

Duplicating and republishing your intellectual property either in printed or digital form for downloads, without compensation, or your written permission, is in my view an act of intellectual piracy and copyright infringement. As such it is also your missed opportunity to receive payments I believe you’re entitled to as its author.  To learn about our Royalty payments follow this link

To be fair, like any publisher, they should receive something to cover their marketing expenses (the headlines gathered from you and published), distribution costs (the physical and online planrooms they operate), their many other expenses, and they should be allowed to turn a profit like any business. But this is only after you have elected to provide to them the right to republish your instruments of service. That should always be done in the form of a “terms-of-use” agreement. And you should at least have some say in those terms.

Sound like an unnecessary headache? Maybe trying to meet your monthly payroll is an unnecessary headache. You need to fully grasp the value of the decisions you make that affect a trillion dollar industry. Nearly half of that is directly related to the sale of building products. 8% of that is directly related to the marketing of building products. In other words roughly $40 billion dollars is spent annually in an effort to convince you, and others like you, to either stick-to or rewrite your stories. In this age of trillion dollar deficits, $40 billion doesn't sound like much. But it buys a lot of sandwiches and pays for some very inefficient marketing.

Because of the inefficiency it introduces to the entire supply chain, the cost is actually much greater than $40 billion. The $40 billion BPMs and their suppliers spend on marketing to you doesn’t include a lot of hidden costs. Your wasted time for example. It includes the sandwiches and bottled water they feed you. It includes the salary and commissions of sales reps dispatched to sway you in your decisions. And it includes the billions spent with those “news agencies” that are pirating your copyrighted instruments of service.

In Part 2 I'll cover the potential golden lining for you and your clients

Go to the ARCxl Planroom to learn more about our royalty payments

New: "ARCxl The App" and 2 low cost subscriptions

Effective today the ARCxl app became available through the Autodesk Exchange Apps store.  Though appearing in the store last week a minor issue prevented downloading.  That appears to have been corrected.  The app is free, and like the website comes with limited access to the library.  Access can be increased with new and lower cost subscriptions.

What does the app do?  If you are using Revit 2013 and install the app, an ARCxl tab opens a panel that provides more convenient access to the library and the ARCxl Planroom.  The planroom will be described in more detail following its actual launch in mid-October 2012.  The ARCxl app simply offers a choice of buttons that open a default browser on a user selected page.  Use the ARCxl website or an app button for navigating.

Get the app for Revit 2013!

Perhaps the most important thing is that it makes users more efficient by serving as a reminder to download a detail for modification instead of starting from scratch.

Minor efficiency gains produce major profits

In this post I’d like to use some basic math to demonstrate my point – that reducing your project production cost by just 5% increases project profit by 50%.  With that understanding it becomes easily apparent that modest changes can have a very dramatic effect on a firm’s overall bottom line or ultimate survival.  Surprisingly or not, our profit is not something Autodesk puts much emphasis on.  Instead they boast that despite a tough economy their 2011 revenue was a record 2.2 billion representing an increase of 14% over 2010 (also a very good year).

Louis Kahn died of a heart attack in a men's restroom in Pennsylvania Station. He went unidentified for three days and despite his long career, he was deeply in debt when he died.

As an architect and having been in the field for more than 25 years, it’s no secret architects consider themselves artists more than they do “bean-counters.” There is a tendency to look down on the accounting department or even the firm Principal that reminds staff of the need to watch the project budget.  Among most architects the emphasis is on doing our best work while believing in at least one of the following diametrically opposed myths:

1. If we do our best work we will be financially rewarded for it.
2. Or, believing that if we produce good work, living in relative poverty is the inevitable price we pay as an artist.

My point is that neither is necessarily true.  Not that there isn’t a relationship between good work and good business, but that there are other factors at stake.  These factors should be exploited to help ensure survival, improve profit and also allow for better design.  We all know architects that defy either of these two widely held beliefs.

Here is the simple and perhaps obvious math to satisfy the original premise:  Traditionally architecture firms strive for a profit margin that ranges from 10 to 15% on any given project.  In the current economy many firms are satisfied to break even and survive in order to outlast the recession.  For the sake of this example let’s assume the project target profit margin is 10% and that it would ordinarily be met.  In order to achieve this profit, total cost of producing the project, from initial marketing through completion of construction administration, should be 90% of the architectural portion of project fees including all office overhead divided among other projects.

In the extreme example above, 10% of total project production cost is saved during the CD phase, effectively doubling profit from 10 to 20%.

Now looking at 100% of the architect's total project cost through the 5 (or 6) phases of a project, if 1% could be saved from each of these phases you would add 5% to your 10% profit margin, or viewed another way increase your profit margin by 50%.  Alternatively any combination of savings from phases in even small amounts could do the same assuming in all cases you don't exceed the budget of the other phases - frequently a problem.  Any savings helps to offset loses or make a project that would otherwise break-even or lose money, a potentially profitable project.

If you are using Revit you have probably found that you are saving man hours during the CA phase with fewer Change Orders etc, and are very possibly saving in other phases as well.  New users will find that the learning curve causes a net loss in productivity and may see no benefits during CA with their earliest use of Revit.  If this is the case, don’t give up now, you're almost there and a recession is the best time to take on the challenge of learning anything new.

The guiding principal behind ARCxl is to participate in improving the profitability or survival of architecture firms also believing that we will be rewarded for the effort.  Our first venture has been to provide non-proprietary Revit detail (and CAD) content that we share among architects to assist in improving efficiency.  The content provided by manufactures is understandably intended to steer architects towards their products but does nothing to improve that architect's bottom line.  Historically architects have done very little to share resources among themselves, frequently repeating the same tasks over and over.  Even within a single office a staff member will redraw a detail rather than search through an office library.  While nothing can prevent the mismanagement of time, we believe that it is possible to offer alternatives to those that would like to.

It is quite possible that among some project types that include typical details, the ARCxl detail library will save 5% of total project cost during the construction document phase thus increasing project profit by 50%.  In an economy that provides little opportunity for profit, here's one you should take advantage of.

Further, using the same simple math, it should be apparent that offering similar opportunities for modest gains in other phases could effectively lead to doubling or even tripling traditional profit margins.  The only question is, how many architects are willing to suspend their belief in myth 1 and 2 (identified above) to participate in a collective effort that makes us all more competitive here and abroad?

ARCxl is looking for Beta testers located within North America for our next efficiency improvement project.  To participate you must be a verifiable registered architect and Principal of an architecture firm.  If you are interested, from North America phone me at:  One, eight hundred, five three three - zero two nine seven.

Sales Representatives are Now Directly Accessible

As ARCxl.com has continued to experiment and evolve, our goal has remained providing opportunities to improve efficiency and productivity to architects, architecture firms and others in the construction industry that utilize our services.  Building Product Manufacturer's (BPM's) have long used advertising methods to build their brand and provide access to their corporate websites, ARCxl has been one of them.  But we are always asking ourselves what can we do to improve at making architecture more profitable?

It occurred to us that with so many other online directories already available, maybe we could offer something completely unique and more useful.  As helpful as a website can be, a professional consultant can be much more helpful.

Many times after going only to a product website for a selection, I've eventually ended up speaking to a product consultant and learned that the product I thought I wanted to spec was not the best for the application.  Therefore I may have wasted many hours or even days working with an incorrect assumption that could have been avoided having a single conversation with the right person.

In a World that seems continually becoming less personal, what can ARCxl do to help architects, builders and product consultants, create better working relationships that reduce wasted time?  We have now replaced impersonal website hyperlinks with digital business cards.

These cards do two things.  First they help you recognize your local representatives at trade events and second they put their contact information at your fingertips.  After a relationship has begun, and consultant recommendations made, then it makes sense to go directly to the appropriate web pages looking for the correct information, rather than engage in a goose chase skimming over multiple manufacture sites - often never finding what you're looking for.

You will only be introduced to those sales consultants that represent products in your area.  Using simple I.P. address technology, representatives outside your area are filtered out.  Just as with our former product ads, when you are looking at details that include particular products, representatives of those products are the ones that will appear.  This filtering will only begin to take effect once the number of representatives in your area start to crowd each other out.

New ARCxl Low Cost Subscriptions

We continue to respond to user input and modify ARCxl.com to suit your needs.  With that in mind we now offer both free details/components and new low cost library subscriptions.  The only difference is in the number of downloads available during a 24 hour period.  As a free service we continue to provide up to 3 free completed details and 20 individual components per day.  As a business we offer increased daily detail download access for those willing to pay a small annual fee for the convenience of using our massive library.

This allows users to sample the details before buying a subscription, or if struggling in a tight economy - continue to get some free production help.  Those busy enough to require more access simply make a modest payment and receive the increased access you'd like for the coming year.

For those that have been asking for the subscriptions we now offer, we regret the delay.  As stated frequently, without your complaints and comments we can't improve - so please do.

Email link: Comments and/or Complaints