When Do You Get Your Rights Back? Never?

For a law student studying contracts law, this principle is axiomatic: You don’t give away your rights unless you get something of value in return. Sadly, though, writers historically have done that all too often. Because they hunger to be published, preferably by a large corporate publisher, they sign contracts with poor terms and pitifully low royalty rates. In the past, however, they at least knew that if the book went out of print, those publishing rights would revert to them.

Not any more.

When does an eBook go out of print? Never. When does a print book go out of print? If the publisher sets it up for print-on-demand, never. So today, writers face the possibility of granting licenses that will never revert.

The Authors Guild and other organizations have proposed various contract provisions to alleviate this situation, but the sad truth is the Authors Guild has little to no clout. The Big Five publishers are cogs within large corporations and large corporations do not give up anything of value if they can avoid it. Why would they?

Some have advocated contract clauses providing that if a book doesn’t sell a certain number of books, say, 200 copies a year, the rights revert. But a publisher can easily circumvent that. Make the book available online for 99 cents (or less) and it will cross that threshold. Some have advocated clauses providing that if an author doesn’t earn a minimal amount, say, $200 a year, the rights revert. But the publisher can easily circumvent that. Even if the publisher has to pay a small fee to an author, it might be willing to do so to hold onto the rights. Bottom line, I don’t think clauses based on sales or money are the solution.

Here’s what I recommend: whenever possible, limit the term of your licenses to a number of years. License the rights for five years, or ten years, long enough to make it worthwhile for the publisher. But when the term is over, the rights revert, or the publisher may request an extension based upon the same or better terms. Something like this:

The Author grants and assigns the Publisher the following rights (insert rights)The period of this license shall be for five years, at which point, the contract may be renewed on the same or better terms, provided both parties agree.

You may be thinking, no publisher would agree to that. But I’ve gotten it and I know other writers who have as well. If you’re a first-time writer dealing with a Big Five publisher, it may not happen. But you can still ask, or tell your agent to do so. And if you can’t get it, you might think twice about signing that contract. Are you getting enough value to justify giving those rights away forever?

And just so you know, Amazon Publishing traditionally offers contracts with term clauses.

Looking Back on 2015–and Ahead to 2016

Everyone is saying that the two biggest trends in publishing for 2015 were adult coloring books and the surge in audiobook sales. If you’ve been reading the Red Sneaker newsletter for long, though, you knew audiobooks were hot a long time ago–and since you write books with words, you may not care much about coloring books.

Here are some more useful predictions for 2016:

  1. Two Worlds, One Family. The articles declaring that “print is winning” or “ebooks have stalled” are based upon sales data from the big NYC publishers–excluding Amazon and independent publishing sales. If you look at the whole picture, ebooks are huge and getting huger. Penguin’s recent decision to fire dozens of employees is probably due to the failure of their ebook program. The Big Five fought for agency pricing, got it, and now that they’ve raised the prices on their ebooks, the books don’t sell as well. Is this a surprise? No. But bear this in mind: according to Author Earnings, 45% of all books sold by Amazon Kindle are independently published. In other words, there are now two parallel markets, both almost equal in size. One is traditional Big Pub, which dominates print. The other is nontraditional Indie Pub, which dominates ebooks, primarily with adult genre fiction.
  2. Children’s Publishing is Poised to Explode. Audiobooks will continue to grow, but what you may not know is that children’s publishing has provided the biggest growth sector for traditional publishers for the past 3-5 years. Last year, the US market children’s book market grew by 13%. The Big Five will expand on this, not only in book publishing, but also by seeking media and licensing deals based upon children’s books. If you’ve got an idea for a children’s book, this is the time to market it.
  3. Rights Management Becomes Critical. As the Big Five become more dependent upon big authors, licenses, and multimedia partnerships, they will attempt to retain every right possible. Too often, authors have been willing to sign away rights for the thrill of getting a book in print. This has always been a mistake and will become even more so in the future. Never sign away rights unless you’re getting something of value in return. Never sign away rights unless there’s a term limit clause or a fair provision for the eventual reversion of your rights.