The Basics

Publishing Contracts: Basics Presented by Elaine English Attorney and Literary Agency Copyright 2009 Elaine P. English 2

Publishing Contracts: Basics Print Publishers (traditional model) v. Electronic Publishers (new model) 3

Publishing Contracts: Basics Major areas of distinction  Rights  Revenues  Term/termination 4

Publishing Contracts: Basics Rights 5

Publishing Contracts: Basics Copyright vests in the author of the work. 6

Publishing Contracts: Basics Exclusive rights vested in copyright owners:  To reproduce the work in copies  To prepare derivative works based upon the copyrighted work  To distribute copies of the work to the public  To perform the work publicly  To display the copyrighted work publicly 7

Publishing Contracts: Basics Book Publishing Rights Three major categories:  Primary  Secondary  Subsidiary 8

Publishing Contracts: Basics Primary The right to print the work in book form. 9

Publishing Contracts: Basics What’s book form? hardcover trade paper (softcover) mass market 10

Publishing Contracts: Basics Is the right to produce an electronic book edition a primary right? 11

Publishing Contracts: Basics Electronic Book Rights. The exclusive right to use and generally exploit non-dramatic reproduction of the verbatim text of the Work, without adaptation and without the addition of any sound or images (other than any images contained in the print edition of the Work) in readable digital format. 12

Publishing Contracts: Basics Digital formats:  Electronic download  Disk  CD/CD-ROM  E-book reader (various formats)  Or similar media of presentation whether now known or hereinafter invented. 13

Publishing Contracts: Basics Secondary Rights (print related) 14

Publishing Contracts: Basics Secondary Rights include:  Serial rights  Book club rights  Large print/Braille rights  Premium or special editions  Translations  Anthology/condensations/abridgements 15

Publishing Contracts: Basics Subsidiary Rights (derivative rights) 16

Publishing Contracts: Basics Subsidiary rights include:  Audio rights  Dramatic rights  Movie and film rights  TV and radio rights  Gaming rights  Cartoon/graphic rights  Electronic multi-media  Merchandising/commercial rights 17

Publishing Contracts: Basics 18

Publishing Contracts: Basics The lines are blurring. E-pubs now asking for Print on Demand (POD). Traditional publishers doing electronic ARCs. 19

Publishing Contracts: Basics Rights granted to publisher should be negotiable. Publisher wants easy access/control to whatever may be needed now or in the future. Author wants value for granting additional rights. 20

Publishing Contracts: Basics Revenues 21

Publishing Contracts: Basics Types of Publishing Revenues  Advance  Royalties  Proceeds from secondary/subsidiary rights 22

Publishing Contracts: Basics Advances Typically paid by all traditional (print) publishers Generally not paid by e-pubs 23

Publishing Contracts: Basics Advance = advance on royalties to be earned Paid in installments  On signing contract  On delivery of manuscript  On publication 24

Publishing Contracts: Basics Royalties Net v.List % of revenues% of list price received by Publisher, after discounts deducted 25

Publishing Contracts: Basics Typical traditional (list) royalties: 10 – 15% hardcover 7-1/2% trade paper 6-10% mass market 15% electronic* *Harlequin pays royalties on e-books like mass market editions 26

Publishing Contracts: Basics E-pub model for royalties: 35 to 40% of list price for e-books 27

Publishing Contracts: Basics Note: Some e-pubs pay royalties based upon net receipts when third-party distributors are involved. 28

Publishing Contracts: Basics Proceeds from secondary/subsidiary rights If Publisher exploits, then 5 – 15% of net If Publisher licensed, then shares all revenues 50/50 with author 29

Publishing Contracts: Basics WATCH OUT FOR: Lower royalties for direct sales to consumers Should NOT apply to sales from publisher’s websites 30

Publishing Contracts: Basics Timing of Payments Traditional pubs: 2x year (90 days after close of six months) E-pubs: monthly or quarterly 31

Publishing Contracts: Basics Returns/Reserves Most print books are sold to retailer/distributors on a returnable basis. Publishers withhold royalties (reserves) in anticipation of returns. 32

Publishing Contracts: Basics Should there be returns/reserves on e-books? 33

Publishing Contracts: Basics Print on Demand used to generate inventory for publishers subject to returns/reserves 34

Publishing Contracts: Basics Term/Termination 35

Publishing Contracts: Basics Term of traditional publishing contracts: term of copyright Term of e-publishing contracts: specific number of years (3,5,7) 36

Publishing Contracts: Basics Term of copyright: Author’s lifetime + 70 years 37

Publishing Contracts: Basics Possible to terminate if work is “out of print” 38

Publishing Contracts: Basics When is a book out of print? If e-book? If POD? Needs to be defined: sales/revenue criteria 39

Publishing Contracts: Basics What happens when contract is terminated?  Rights returned to author  Publisher’s right to sell off inventory  On-going licenses 40

Publishing Contracts: Basics Other Miscellaneous Issues 41

Publishing Contracts: Basics Preparation of Manuscript Cover Art Timing of Publication 42

Publishing Contracts: Basics Free copies/review copies Option Non-compete Bankruptcy 43