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Strip Mining the Authors

25 November 2011

Continuing a Thanksgiving weekend reprise of the most popular earlier posts.

Kristine Kathryn Rusch has written another important essay on the changing face of publishing. I’ll intersperse some excerpts with my comments, but this is one you’ll want to read in its entirety. There is, as always, a link at the bottom.

As will be abundantly clear from Kris’ examples, traditional publishers and the new agents-turned-publishers are making a brazen grab for as many rights from authors as possible while reducing the amount of money they will pay authors for their books. This is the new strip mining model for publishing.

Why are they doing this?

When the ship is sinking, some of the passengers start fighting over the lifeboats.

With each passing week, the handwriting on the wall becomes more and more distinct. What does the writing say?

Big Publishing, the agents who rely upon it and the traditional bookstores that provide its lifeblood are sinking. Just like the Titanic, they’re not disappearing in an instant. The band is still playing and fashionable people are doing business on the upper decks. The good ship Big Publishing will be bobbing in the waves for some time to come, but Amazon, ebooks and indie publishing have punched big holes in the hull. Those holes cannot be patched and the ship is going down.

Does this mean the end of publishing ships? No, but it means the demise of the grand ocean liners. The S.S. Amazon is an entirely different design, crafted for speed and efficiency and it doesn’t need many sailors schooled in the old ways.

While the band is playing and champagne flows, people make brave speeches about the timelessness of their trade. But, make no mistake, a battle is underway below-decks for spots on the lifeboats. If it’s necessary to toss authors over the side to make room, well, that’s just the nature of the business these days.

From Kris:

[A bestselling] writer, more than any other writer, is in danger of losing money and copyrights, of in fact going from making a lot of money to making little or no money at all. How can she lose money when she will probably maintain her bestseller status, her sales will probably go up, and her work will go into more markets than ever before?

Simple. Her contract terms will change and she might not even notice.

At some time hidden in the mists of time, an ancient rule of contracts was formulated: When a business partner is in financial trouble and wants a change in a long-standing agreement, watch your wallet. The more “routine” the change, the more dangerous it probably is.

Kris talks about e-rights:

Another clause to beware of in the e-rights clause of your new contract is this one:

“The Author hereby grants to the Publisher…the exclusive license to produce, publish, sell, distribute and further license any Electronic Version of the Work…. ‘Electronic Version’ means versions that include the Work…in a complete, condensed, adapted, or abridged version and in compilations for performance and display in any manner whether sequentially or non-sequentially and together with accompanying sounds and images, if any, transmissible by any electronic means, method or device (including but not limited to electronic and machine-readable media and online or satellite-based transmission or any other device or medium for electronic reproduction or transmission whether now or hereafter known or developed…)” [Emphasis mine.]

Yikes! Ick! No. Never, ever, ever, ever sign this clause. Think about this: movies are digitized—they are performance, and they are often distributed online. Not only does that clause allow someone to monkey with your work, abridging it, taking it out of order, adding things to it, making it into a performance piece, adding sound effects, but it also is a backwards way of granting television rights, video display rights, and any other performance right, so long as that performance can be distributed electronically.

And don’t believe that someone in your publishing house won’t use that clause down the road. The editor you trust may leave, the publishing company might change hands, and a clause that was designed for one thing will be used for something completely different.

Gold has been discovered in ebooks. Smart people are prospecting for more gold with enhanced ebooks. Video in ebooks is a definite possibility.

While a few people sprinkled in publishers’ management positions high and low may have seen a vision of what books could become and the effect that might have on publishers’ profits in their traditional lines a few years ago, nobody bothered to tell the gnomes who tended the standard-form contracts.

Kris has seen far more publishing contracts during her career than Passive Guy has, but the ones he’s examined that are more than a couple of years old are tight where paperbacks and hardcovers are concerned and they leak like a sieve everywhere else.

Back to Kris:

Watch out for your option clause. Try to avoid signing one at all. In the past, option clauses were like job security, but no longer. Option clauses have now become a way to tie a writer to a publishing house and to prevent her from working for anyone else. So strike your option clause if possible.

. . . .

Watch your warranty clause.  Now, many publishers are reverting to an old practice. They want writers to warrant that the writer will not write anything until this particular book under this particular contract is published.

This used to be a separate clause, and very easy to find.  It existed in a lot of contracts 20 years ago, then faded away.  Now it’s back with a vengeance.  It used to be that the writer guaranteed that the book she had just contracted for would be her next book and no other book would compete against it.

Now she’s guaranteeing that she will not write another book until this one is published.  And in many cases, the publisher enjoins her from writing anything.

This clause, which has been in every new book contract I have seen from traditional New York publishers in the past six months, is buried in the warranties.  Which are the boilerplate part of the contract, the part that includes bankruptcies and acts of God.  A lot of established writers stopped reading the legal gobbledygook in the boilerplate years ago, and have been snared by this clause.

Sometimes people fighting for lifeboats don’t act in rational ways. During the fight, the lifeboat may be damaged, supplies lost and passengers capable of providing valuable assistance to the survivors prevented from boarding.

When he read Kris’ description of these provisions, Passive Guy was reminded about one of the fundamental rules of making contracts with important long-term partners: Don’t screw your partner in the contract even if you have an opportunity to do so. When your partner realizes you screwed her as she inevitably will, she’ll spend all her time and energy working on ways to get out of the contract instead of doing whatever it was that you wanted her to do when you signed the contract.

What about the clause that hog-tied the author to the publisher? PG’s already thought of a half-dozen likely ways to evade the clause. He can’t help it, that’s just the way his mind works. However, he’ll keep those under his hat for the moment because he hasn’t seen the language in the contract.

Something else also came to mind, however. As described, the hog-tying clause potentially precludes a professional author from earning a living by writing for a competing publisher. When you think of it that way, it sounds a lot like a non-compete clause.

Non-compete agreements are common in the tech world. When you go to work for a tech company or become a contractor for a tech company, you’ll be required to sign a non-compete agreement that prevents you from taking everything you learned while you worked on the Apple ebook project and taking it with you when you’re hired for the Microsoft ebook project.

As with everything else, however, non-compete agreements were abused by some employers and today a dense combination of state laws and court decisions have placed substantial limits on how much a company can restrict the post-employment work of a former employee.

One of the fundamental limitations on non-compete agreements is a public policy that people should be free to work and support themselves in their chosen profession and should also be free to move from job to job. Limitations on that freedom included in non-compete agreements must be narrowly-tailored with time limitations to protect the vital interests of the company, not punish ex-employees or former contractors for quitting.

Back to the bigger picture for a moment, hiding material limitations on an author’s freedom in obscure warranty clauses as Kris describes is an unethical business practice.

Depending upon how it’s done and what extra-contractual representations are made to the author, we may be moving into fraud territory.

This practice exploits the great mismatch in resources and negotiating power between a large publisher and an individual author. Passive Guy has no problems with bare-knuckles contract drafting and negotiations when both sides have access to good-quality legal advice, but this is over the line. It demonstrates disrespect for an author and an intention to fleece the author for the financial advantage of the publisher.

This is antithetical to a relationship of mutual respect between professional colleagues. This is destructive exploitation – strip mining – of an author’s life work.

Such behavior by a publisher gives rise to an additional inevitable question. If the publisher is willing to engage in borderline fraudulent practices in its contract with an author, what additional types of fraudulent practices may it engage in? Even hidden clauses in a contract are far easier to discover than under-reporting of sales and underpayment of royalties.

So, how do we deal with hidden gotchas in a publishing contract?

Next week, Passive Guy will unveil yet another lovely contract provision for authors. Check back to learn about the Smoke ‘Em Out Clause.

And most definitely read the entire post by Kristine Kathryn Rusch. This one can make or save you some big money.

Link to the 44 comments to the original post. Feel free to comment here if you like.

Big Publishing, Contracts, Ebooks, Legal Stuff

14 Comments to “Strip Mining the Authors”

  1. “When your partner realizes you screwed her as she inevitably will, she’ll spend all her time and energy working on ways to get out of the contract instead of doing whatever it was that you wanted her to do when you signed the contract.”

    This is so true. I had a 3 year contract with a manager/agent who treated me terribly. During the 3rd year I was in talks with NBC and Proctor & Gamble to work on something for them. I couldn’t get out of the management deal so I sat out the last year, vowing to make no money for Scott S****t no matter what. The day the management contract ended my new contract started.

    I was one client among many so that didn’t hurt S****t. What happens when they continue to act like this and it’s one client among the few left? Their wisdom and foresight is astonishing. And not in a good way.

    • And when an author is spending time thinking about how to get out of a contract, he/she isn’t thinking about writing something great, Barbara.

      • I spent the time doing a bible for P&G’s daytime serial Texas.
        They passed but NBC picked me up and I got a job as headwriter for The Doctors. I don’t know how great any of that year’s writing was but I couldn’t have written my novel Sweeps without the experience in television and I’m very proud of that book so it was all good in the end.

  2. And how many of the people who pretend to protect writers are warning us about this? I mean certain organizations. Instead they tend to defend the very practices!

    Writers who want to protect themselves (and for sure no one else is going to) had better read your blog and Kris’s.

    Thanks, PG.

  3. I’m pleased this is helpful, JR.

    • PV is always interesting and often insightful, PG, but never more so than when you and KKR are tag-teaming. I don’t know if it’d be better or worse if you made the alliance formal.

      Regards,
      Ric

  4. One thought about your metaphor:

    The writers ARE the lifeboats. I know it feels like the writers are being thrown overboard, but writers are what they’re clinging to. (And in their zealous grab to control us, they are pulling us apart and sinking us….)

  5. Thank you for the post. I’ve always thought it odd that clauses such as the one mentioned have not been torn apart as a non-compete clause. At least, after reading this, it no longer feels like I’m some odd creature imagining the extent of its restrictiveness for no good reason… Hmmmm, I believe the band is going to play louder than ever now to drown out the sounds of all that scuffling for lifeboats:)

  6. Thank you for this post. There seems to be many industries that are the same when it comes to “non-compete” clauses, and other things contained within a contract/agreement. I write documents & produce other paperwork for mining industry clients, and write poetry & children’s books etc. for my own pleasure. When I saw the words “Strip Mining” on your post, it rang a bell. This subject is a very serious one. In mining, when you have a mining property for sale, and a potential buyer comes along who is interested in your property they will always ask for an “exclusive option” for a certain period of time during which they will do what is called “due diligence” or checking out the property for its value. During this period of exclusivity, if you agree, you may NOT show the property to any other interested party, thereby limiting your ability to possibly make a deal, while the first interested party is “just looking” and may walk away, not make a deal at all, and you will be left without any remuneration, UNLESS you are wise and have a contract drawn up by your attorney, that includes payment for your allowing them the privilege of viewing your property & doing due diligence on it. This is common practice in the mining industry. Having had experience with my industry, and now having read this very helpful article, when my children’s book is ready, I will absolutely be careful regarding “Options” and all of the rest that has been discussed here. This information has been invaluable to me as a beginner. Thank you so much. I have signed up for your newletter. I don’t want to miss any of your articles. Thank you! Bethany Wilson

  7. Fortunately, there are a large number of smaller publishers running around loose and a hord of eBook publishers. Somewhere in all that, there are publishers who DO write fair and equitable contracts. They may not have the marketing reach of the big houses in NY, but many of them will at least offer you a good deal (albeit, on a shoestring).

    So, follow the good advice in this article and always read a contract completely. The longer and wordier the contract, the more it probably needs to be perused — perhaps by your attorney.

    The biggest problem is that a new author who doesn’t have a following is in a poorer bargaining position than a J.K Rawlings. But don’t let your desire to “get published” blind you to terms that may hamstring your future after the first book.

    If all else fails, you can try “Indi” (independent) publishing, but that has a whole new barrel of problems and expenses.

  8. Good Lord, what’s next? “The author hereby grants to the publisher the right to any works of their progeny who display creative talent, including but not limited to Fingerpaints, Crayon and colored pencil.”

    Maybe I shouldn’t give them ideas. 🙂

    • Jeanne – An agent just tweeted that she’s already seen your fingerpaints clause in a new contract. 🙂

  9. Yikes! What hath I wrought? 🙂

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