10 Tips for Crafting an Equitable and Secure Publishing Contract: A Rebuttal
Thursday, March 3, 2016
This post is in response to the January 2016 IBPA Independent article 10 Tips for Crafting an Equitable and Secure Publishing Contract. IBPA welcomes your feedback in the comments section at the bottom of the post.
by Georgia McBride, Month9Books --
I have been told by literary agents and authors alike that I have one of the most author-friendly publishing agreements around. It is something I am rather proud of. During the course of business over the last four years, I have sought a more equitable contract for ALL parties, and not one that favors either the author or the publisher. This is the meaning of equity.
So when I read IBPA’s informative article written by the head of The Authors Guild, I raised an eyebrow at how skewed in favor of the author the advice was. I asked if I could offer a friendly, but equally informative, rebuttal on the points made in the article, and IBPA happily agreed.
The below is my opinion based on having negotiated more than 215 publishing agreements, 22 rights reversion and separation agreements, 12 audiobook agreements, 4 film/option agreements, and 4 foreign rights agreements since March 2012.
1. Publishing is a Partnership; Let Your Royalty Rates Reflect That
While this is very true, the publisher is often the partner who bears the most meaningful and significant responsibility for the fiscal health and success of the partnership including investing funds and resources, selling, packaging, marketing, etc. I often liken the writer to a person who owns a great piece of intellectual property and who needs a business partner to help her or him protect it, perfect it, make it market ready, and ultimately distribute and sell it. However, publishers have traditionally taken most of the financial risk upfront by investing in advances (often times before a book is even delivered), editing, marketing, permissions, sales, promotion, packaging, etc. all in the hope that the book will earn that investment back and then some. Cry me a river, you say? Writers may go on to write for other publishers or even themselves, but the publisher’s brand must be able to effectively continue to sell books to trade and consumers regardless. Additionally, since statistics show most books published will not sell more than five hundred copies in their lifetime, publishers end up taking a huge loss on their investments. I would like to see a more equitable agreement that’s fair on BOTH sides.
2 and 3. Let Authors Get Their Rights Back When the Book’s No Longer Selling AND Don’t Acquire Rights You Have No Intent of Exploiting
I agree with this 100%. If you are not willing or able to offer a continued and rigorous investment in backlist, there is no reason to hold onto rights that could easily revert to the author. That said, there are things to consider when reverting rights including:
It is never a good idea to hold onto or even acquire rights simply on the off chance that the book might be successful and someone might call you about it. If you are not actively capable of or willing to exploit rights, then do not acquire these rights. Leave the author free to do as he or she pleases.
- Will you ever see your investment recouped?
- Are you willing to take a loss on the book?
- Is there anything you can do right now to infuse life into the book (examine the cover, marketing copy, marketing strategy)?
- Would both you and the author be better served by releasing the book?
- Has the author lost faith in your ability to be supportive?
- Has the author lost faith in the book?
4. Narrowly Tailor Your Non-compete Clauses
I agree 100% with this statement with the following caveat: An author needs to understand what having too many new books in the market at one time -- competing books -– can do to their sales. With very few exceptions, the author ends up creating a situation where they are, in essence, competing against themselves for the same reader, in addition to competing against all the other like-content out there. Why ask your readers to choose between your books?
5. Get Rid of the Option Clause
I can’t agree with this statement as it seems to only be fair to the author. The goal of the clause isn’t to keep writers from publishing. In fact, it is quite the contrary. It is to give the publisher –- that equitable partner -– a chance to publish the author’s next work. I reject the notion that the author should ONLY be limited to publishing with one publisher at a time, and support the creation of a new deal for the option book.
6. Pay Authors Promptly
I don’t know anyone who would disagree with this statement. However, the type of publisher you are, as well as the kind of distribution you have, will affect how often -- and when -- you can pay authors. If you publish and distribute through only a few channels like Amazon and Barnes & Noble online, it will be relatively easy to pay authors quickly. If, like me, your books are distributed via a large distributor whose sales are not reported until months after they’ve occurred, and payments and reserves are held, you could possibly have authors who have sold thousands of books without having received timely payment despite the publisher being contractually obliged to pay the author by a certain time. This can create a challenge for a publisher's cash flow, so make sure you have alternate revenue streams to draw from.
7. Don’t Slice and Dice Authors’ Advances
Once again, this is something that publishers need to be mindful of. Paying advances all at once can have a negative impact on cash flow. In addition, dividing advances means that an author who fails to deliver the work on time, or ever, does not have the full advance. Let’s be honest, everyone starts with the best of intentions when a book is acquired. But there is an ugly truth publishers aren’t allowed to talk about – and that is, sometimes you pay an author an advance and they take their time in delivering the work. Sometimes life happens. I get it. But this small press publisher has been on the receiving end of books that were never delivered despite the author having been paid thousands of dollars in advance. This has happened more than once. So, dividing advances is as much about preserving cash flow as it is about protecting the publisher and motivating the author to finish the book and deliver it. Some agents will argue the agent or agency is the guarantee the author will deliver. But at the end of the day, unless the agent is going to step in and deliver the book, the author must bear sole responsibility for compliance.
8. The Acceptability of a Manuscript Shouldn’t Be a Matter of Whim
I am particularly disturbed by this notion that publishers make business and fiscal decisions “on a whim.” I cannot speak for others, but I have to assume that most publishers want what’s best for the book and the business. And, if there is evidence that a book won’t sell due to a change in reader appetite or market conditions -- or a new editor isn’t 100% behind it, or it is no longer financially viable -- the publisher should let the book go and do so without making the author wait an unreasonable amount of time to publish it elsewhere.
9. Don’t Foist Legal Risk onto Your Authors
No publisher can afford to put its entire net worth on the line, and this is certainly true of authors, as well. So an equitable amount of risk should be burdened by both parties. I believe it is the author’s responsibility to know whether her or his work could possibly raise questions of infringement or accusations of plagiarism prior to offering it to the publisher. This hardly foists the majority of the risk on the author. Failure to make this a priority by the author is irresponsible. A legal action against an author and their book could potentially jeopardize the health and well-being of the entire publishing company, including its other authors. Most small publishers operating today would be put out of business by an action of this sort.
10. When Selling Directly to Readers, Give Authors a Higher Royalty Rate
In my business, it costs more to sell to a reader directly than it does via a distributor. When selling direct, my cost of acquisition is a lot higher and isn’t split between other books. And, while I do not currently practice this change in royalty rate, I can certainly understand why a publisher might employ it.
I appreciate the opportunity to offer a publisher’s view of what an equitable agreement could look like. Ideally, as the industry changes, authors and agents will see and accept the publisher's point of view, as well, and adjust their expectations in order to ensure everyone involved has an equal opportunity to succeed. After all, we publish books because we love them and want to share them with the world, not to make authors miserable and cheat them out of what is rightfully theirs. A working writer who is earning money is a happy writer. That is what I believe we all strive for. We can get there, but it will take some meaningful compromise.