From Hugh Howey:
The economics of book publishing have shifted and will never be the same. Both the physical book, with print-on-demand, and the e-bo0k, with its infinite supply, have created a world where the written word is forever available for commercial transaction. Hundreds of years from now, anything written today will still be available for sale. At that point, of course, the works will be in the public domain. But what to do until then?
The current book contract in all its lovely boilerplate no longer makes sense in light of a work’s permanence. Such contracts are an outdated mechanism. New contracts are needed. Authors will still care about their works decades down the road in ways that publishers most likely won’t. Many publishers view backlist as competition to frontlist. Dusty tomes do battle with the shiny and new. If the purpose of publishing is to blow out the release and hit the grail of lists—The New York Times—then lowering the cost or in any way promoting a decades-old story can only harm this goal. The beloved author today becomes the pariah of tomorrow.
Reversion clauses are meant to protect the author’s interest by assuring the work will return to them once it has sufficiently withered on the vine. But these terms are ludicrous and growing more so. I’ve seen contracts where a work remains with the publisher so long as it sells 100 copies in two reporting periods. That’s 100 copies in a full calendar year. A publisher could order that many e-books for themselves at the last moment and retain rights to a work until the author dies, and then another 70 years after.
Again, these injustices meant little when a book had a three-month lifespan on a bookstore shelf before going out of print. The same terms are a slap across the face today.
. . . .
[A] Yellow Light reversion period . . . might go something like this (with added legalese, of course):
- If the work in question does not sell 1,000 copies in a single reporting period of six months, the author is granted the right to set the price of the work and to request and approve of a change in cover art. If the work does not sell 1,000 copies in the following reporting period of six months, the rights revert completely to the author.
. . . .
The point of the clause is to give the publisher a chance to revamp the work or invest in its promotion. Any publisher confident of its ability to increase sales should be willing to sign a contract containing such a clause.
Link to the rest at Hugh Howey and thanks to Sandra for the tip.
PG agrees with Hugh that standard reversion clauses (sometimes referred to as out-of-print clauses) are no longer appropriate for a much-changed book world.
PG will further criticize most of such clauses as designed to make sure a book never reverts unless the publisher wants it to do so. Many of these clauses are anything but simple and require much more than the failure to sell a minimum number of copies to trigger reversion.
Additionally, in a world of 99-cent ebooks, the number of copies sold doesn’t necessarily translate into a meaningful royalty check for an author.
PG first wrote about about a Minimum Wage for Authors reversion clause about three years ago and that post generated a lot of comments. Here’s a reprise of his former post:
The purpose of a traditional reversion of rights clause in a publishing contract is to return all rights to a book to the author when sales of the book have tailed off or, for whatever reason, the publisher is no longer interested in publishing the book.
Often, reversion of rights is connected to an ambiguous Out of Print clause. Under some contracts, a book goes out of print when the publisher declares it to be out of print. Under others, a book goes out of print when the number of printed copies in the publisher’s inventory drops below a specified number. Under one OOP clause PG heard about recently, if the publisher had fewer than 100 printed copies of the book and the author was willing to purchase those copies, the book would go out of print.
A reversion of rights clause without a definite trigger is nothing but an invitation for an author to go begging to his publisher from time to time.
Again, to protect the relationship of the author with the publisher, following isn’t the exact reversion of rights language in any contract PG helped with, but it will give you some ideas about how such a provision might be constructed. All capitalized words or terms are Defined Terms described elsewhere in the Publishing Agreement.
The major components of the provision are:
- It can’t be exercised until royalties earned equal or exceed 150% of the advance. So the demonstration provisions didn’t become too complex, I didn’t include termination provisions for situations where royalties earned were less than 150% because the equities between author and publisher differ if the advance isn’t earned out.
- If any semi-annual royalty report provides for payment of less than $3,000, the author can give notice of intent to cause rights to revert
- The publisher can pay the difference between actual royalties and $3,000 and continue the contract. This gives the publisher a second shot at promoting sales of the book.
- If the publisher doesn’t cure the shortfall or a subsequent royalty report provides for less than $3,000 in royalties, the author can terminate the contract and publisher can’t stop this from happening
Here’s the language
Reversion of Rights
A. If, after the Royalties earned by Author under this Agreement total 150% or more of the Author Advance paid by Publisher hereunder, the Royalties for the Work are less than $3,000 on a semi-annual Statement of Royalties, and Author owes Publisher no other unpaid sums under this Agreement, Author may give Publisher written notice that Author desires to exercise the Reversion of Rights to the Work under this Paragraph.
B. After receiving such written notification, if Publisher desires to continue to exercise its rights to the Work under all the terms and conditions of this Agreement and Publisher is not in material default under any provision of this Agreement, Publisher may, within 30 days of receipt of such notice from Author, pay to Author the difference between the actual Royalties paid with respect to the Work on the preceding Statement of Royalties and the sum of $3,000. If Publisher makes said payment in a timely manner, this Agreement shall continue until later terminated under this Paragraph or another Paragraph of this Agreement.
1. By way of illustration and not limitation, if Publisher pays Author the sum of $2,000 with a Statement of Royalties and Author gives notice as provided above, Publisher may cause this Agreement to continue by paying Author the additional sum of $1,000 within 30 days of said notice.
A. Publisher fails to make the payment described in sub-paragraph B. above or
B. Publisher has made one such payment and, thereafter Royalties for the Work are less than $3,000 on any subsequent semi-annual Statement of Royalties and Author has given a second written notification of intention to exercise Reversion of Rights as provided in sub-paragraph A. above,
all rights to the Work shall revert to Author on the Effective Date set forth hereafter, and Publisher shall have no further rights to the Work, subject only to the provisions of sub-paragraph F. hereof.
D. The Effective Date upon which all rights to the Work revert to Author shall be 30 days following receipt of the last notice from Author as provided in sub-paragraphs A. and/or C. above.
E. On and after the Effective Date, Author may exercise all of the rights of the owner of the copyright to the Work free and clear of any claim whatsoever by Publisher.
F. For a period of one year following the Effective Date, Publisher shall have the right to liquidate any remaining inventory of hard copy books in its possession on the Effective Date, subject to its obligation to pay Royalties to Author therefor and all other obligations of Publisher under this Agreement. In the event that Publisher has any remaining hard copy books in its possession on the first anniversary of the Effective Date, Publisher shall cause such books to be destroyed at Publisher’s expense.
G. Any other provision of this Agreement notwithstanding, after receipt of any notice from Author under sub-paragraphs A. and/or C. above, Publisher shall not enter into any agreement with any third party assigning, transferring, selling or licensing any rights to the Work in whole or in part without the express written consent of Author to the specific transaction and any such purported assignment, transfer, sale and/or license without the express written consent of Author shall be void ab initio.
Looking back at this language, PG was going out of his way explicitly cover all the bases and use it as an opportunity to help authors to understand not only what a Minimum Wage reversion clause might look like, but also understand how to read a typical publishing contract reversion clause. It would certainly be possible to squeeze the concept into a shorter provision. For simplicity purposes, referring only to a specific minimum dollar amount for royalties and eliminating any reference to a percentage of the advance would be one way of shortening and simplifying the language.
As mentioned earlier, several experienced authors commented favorably about the Minimum Wage concept when PG first posted about it.
However, PG has not seen or been informed that any traditional publisher has picked up on the idea. During the intervening years, if anything, many reversion clauses have become even more complex and purposely impenetrable.
If an author signs a typical traditional publishing contract today without major revisions to the reversion or out-of-print clause, he/she is probably going to be bound by that contract, regardless of book sales, for the life of the copyright to the book, which is the rest of the author’s life plus 70 years in the U.S.
Obligatory Disclaimer: PG hasn’t put a disclaimer into a post for a long time, but because he has included some specific contract language, he thinks it’s a good idea.
Passive Guy is an attorney, but he does not provide legal advice on this blog. He is most definitely not your attorney unless you and he both sign a retainer agreement. Only then will he give you legal advice and it will be delivered privately, not in a blog post.
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