Contracts

Contest Caution: The Sunday Times Audible Short Story Award

17 November 2019

From Writer Beware:

Founded in 2010, The Sunday Times Audible Short Story Award bills itself as “the richest prize for a single short story in the English language.” And indeed, the prize is major: the winner receives a cool £30,000 (no, I did not add extra zeroes.)

With judges yet to be finalized, the selection process will include a 20-story longlist announced in May 2020, a six-story shortlist unveiled in June 2020, and the winner revealed on July 2. The shortlisted stories will be published in an Audible audiobook, with included writers receiving “an extra £1,000 fee, on top of a prize payment of £1,000”. To be eligible, writers must previously have had at least one work published in the UK or Ireland by an “established print publisher or an established printed magazine”

. . . .

So what’s the catch? — because you know I wouldn’t be writing this post if there weren’t one. Well, as so often happens, it’s in the Terms and Conditions. Specifically:

To summarize this dense paragraph: simply by entering the competition, you are granting a sweeping, non-expiring license not just to Times Newspapers Limited (The Sunday Times‘ parent company), but also to Audible and any other licensees of TNL, to use your story or any part of it in any way they want, anywhere in the world, without payment to or permission from you.

This is far from the first time I’ve written about “merely by entering you grant us rights forever” clauses in the guidelines of literary contests, some of them from major publishers or companies that should know better. Sure, in this case the license is non-exclusive, so you could sell your story elsewhere–but only as a reprint, because by granting non-exclusive rights to one company, you remove your ability to grant first rights to another, at least for as long as the initial rights grant is in force.

It’s not uncommon for literary contests that involve publication to bind all entrants to a uniform license or grant of rights–so that, when winners are chosen, the license is already in place. But ideally, the license should immediately expire for entries that are removed from consideration–or, if the contest sponsor wants to retain the right to consider any entered story for publication (as TNL clearly does–see Clause 4.2, below), rights should be released within a reasonable period of time after the contest finishes–say, three or six months. There’s simply no good reason to make a perpetual claim on rights just in case, at some unspecified point in the future, you might just possibly want to use them.

. . . .

There’s a couple of other things to be aware of. Shortlisted authors enter into a 12-month exclusive contract with Audible, for which they are given a “one-off” lump-sum payment (the £1,000 noted above). But thereafter, Audible retains the right “to record, distribute and market such audio version for at least ten (10) years.” Again, this right is non-exclusive–but there’s no indication that Audible has to pay these authors for potentially exploiting their work for a decade. (If you don’t consent to these terms, you can’t be shortlisted.)

Finally, although publication is guaranteed only for the shortlist, TNL reserves the right to publish longlist and non-listed entries as well. Great! Except…there’s nothing to suggest these writers would be paid either.

Link to the rest at Writer Beware

PG says this is tacky to the max (but, unfortunately, not rare).

You need to read all terms and conditions whenever you submit anything you write online, be it for a contest, consideration for publishing, publishing, etc., etc., etc.

Audible should know better. PG recommends loud complaints directed to anyone you know in Amazon or anyone you don’t know who has an Amazon email address. Jeff@amazon.com is one (no, PG doesn’t know if he ever reads email that comes to this address.).

How to Read a Book Contract – Somebody’s Gonna Die

12 October 2019

Per a request in the comments, from an earlier post on The Passive Voice

Let’s assume you are an author represented by a literary agent. If Passive Guy asks you who your agent is, you’ll respond with something like “Suzanne Jones” or “James Davis.”

Passive Guy is certain Suzanne and James are wonderful people, but they’re going to die.

This is not a threat, simply a statement of biological reality.

Who will your agent be after Suzanne dies? Will it be someone you choose or not?

You selected Suzanne because she had a great reputation for helping authors build good long-term careers. Your career isn’t built yet. Who’s going to help build your career if she’s gone?

These are not hypothetical questions. One of the comments to a recent essay about agents by Kristine Kathryn Rusch described the story of Ralph Vicinanza, a literary agent for Stephen King, the Dalai Lama and others, who died in September, 2010, at age 60.

Here’s a bullet-point description of what has happened since Mr. Vicinanza’s death, according to the comment (which fits with other accounts PG has found):

  • The other two agents in the Vicinanza agency quit their jobs
  • A letter was sent to all authors advising them to find other agents and promising to continue to pay royalty checks
  • The executor of the Vicinanza estate intends to keep receiving payments from publishers and collecting agency fees from the authors
  • Other agents are asking Vicinanza authors for more than 15% to handle titles the Vicinanza agency handled, presumably because the estate will claim the first 15%

Contracts with a large organization should differ from those with an individual or small organization. A large organization, like a big publisher, is not going to disappear. It may go bankrupt or be sold, but it will have enough value so someone is likely to keep it running in some form or fashion.

However, if somebody in a large publisher dies, another person will replace the dear departed and business will continue as usual. An author has a relationship with a big publisher because the publisher can jam a lot of books into bookstores, airports, Wal-Mart, etc. The jammers may change, but the jamming continues. (PG knows about author/editor relationships, but you can hire an editor without hiring Random House.)

In a small organization, like a literary agency, a death of an individual can result in the death of the agency. PG would suspect many of the clients of Mr. Vicinanza’s agency signed the agency contracts because of Mr. Vicinanza, and quite possibly, only because of Mr. Vicinanza. PG would have signed if Mr. Vicinanza promised to turn him into another Stephen King.

It appears the executor of Mr. Vicinanza’s estate is his sister, Louise Billie. Passive Guy did a quick Google search and couldn’t find any evidence that Ms. Billie is a literary agent or has any experience in that business. Yet, under the agency’s contracts with authors, Ms. Billie, acting on behalf of the estate, is handling royalties and, presumably, retaining 15% plus, perhaps, expenses.

What’s the contractual solution to problems like this? It’s much simpler than stating the problem.

If the services of a particular individual are a key value to you, include a provision in the contract that gives you the right to terminate the contract:

  • if that person dies,
  • becomes disabled and unable to perform his/her normal work, or
  • leaves the agency for any reason

As far as what happens to the agency percentage on book contracts the agent negotiated while alive or working at the original agency, PG would push for a provision that says those end when your agent goes.

A possible compromise would be that the agency percentage continues to be paid to the agency for one or two years after termination, but PG doesn’t like that because, at least according to the hypothetical value proposition of an agent, the agent’s services are continuing and overlap from book to book. The work an agent puts into your third book also enhances sales of books one an two.

The Vicinanza experience demonstrates that other agents are not willing to accept authors under standard compensation terms if they have to share compensation.

If agents boohoo about this, Passive Guy would simply point out that, if an attorney dies, the attorney is entitled to fees earned up until he takes his last breath and no more. A client is always free to hire another attorney at any time, whether the attorney is alive, partly dead or all the way dead.

Someone is bound to ask why the author should receive royalties forever while the agent who negotiated the publishing contract doesn’t receive agency fees forever.

The answer is that when the author wrote the book, she created an asset, recognized under copyright law, that will exist for a long time and is capable of generating income in a variety of different ways over its lifetime, some of which are recognized today and others of which won’t be conceivable for another 50 years.

The author owns the asset, the agent does not. The agent was paid for a service provided. PG would argue if the ongoing services of a particular agent were the key value to the author, when those services are no longer provided for any reason, the author shouldn’t be required to make any additional service payments.

How to Read a Book Contract – Agency Coupled with an Interest

12 October 2019

A reprise of an earlier PG post about Agency Contracts per the request of a couple of visitors to TPV.

In an earlier post showing an Author/Agent agreement, the sample clause included a claim by the agent that the 15% fee was “an agency coupled with an interest.”

This term has rightly caused concern among many authors. Done right, an agency coupled with an interest could well give an agent a piece of the copyright to the author’s book or books and could make the agency agreement irrevocable.

However, we have an opinion from the Supreme Court of New York County, New York, on this very topic based upon an agency clause that appears to be very similar to the one we reviewed yesterday. (A quick explanation about New York state courts – unlike almost every other state and the federal court system, the “Supreme Courts” in New York are the trial courts. This decision is currently being appealed to the New York State Court of Appeals, but if PG were a betting man, he would bet the appellate court will confirm the trial court’s decision.)

Here are the facts:

  1. Beginning in 1996, the Peter Lampack Agency (PLA) represented Martha Grimes, mystery novelist supreme.
  2. Ms. Grimes earned over $12 million during the 12 years PLA represented her.
  3. PG assumes that PLA never had an Agency Contract with Ms. Grimes because they didn’t talk about it in the lawsuit they filed later.
  4. In 2005, PLA negotiated a four-book agreement with Penguin.
  5. The 2005 Penguin contract included an Agency Clause very similar to the one we discussed yesterday.
  6. The Penguin agreement included an “option” – basically a right to negotiate – for Ms. Grimes’ next book.
  7. In 2007, Ms. Grimes fired PLA and hired another agent.
  8. In 2009, Ms. Grimes’ attorney sent Penguin the manuscript for The Black Cat and later signed a publishing contract for that book.
  9. PLA sued Ms. Grimes, Penguin and a bunch of Penguin subsidiaries, claiming it was owed agency fees on The Black Cat and other books of Ms. Grimes published by Penguin, based on the 2005 option clause and the fact that other books of Ms. Grimes were published under “extensions” of contracts PLA had negotiated before it was fired which contained standard agency clauses.

Here’s the version of the PLA agency clause the court included in its opinion:

The Author hereby appoints [PLA] irrevocably as the Agent in all matters pertaining to or arising from this Agreement . . . . Such Agent is hereby fully empowered to act on behalf of the Author in all matters in any way arising out of this Agreement . . . . All sums of money due the Author under this Agreement shall be paid to and in the name of said Agent . . . . The Author does also irrevocably assign and transfer to [PLA], as an agency coupled with an interest, and [PLA] shall retain a sum equal to fifteen percent (15%) of all gross monies due and payable to the account of the Author under this Agreement.

Ms. Grimes’ attorneys argued that she owed nothing because she terminated the agency relationship with PLA in 2007 and contended that PLA did not have an agency coupled with an interest.

The Court ruled on a Motion to Dismiss and Ms. Grimes was a big winner. Winning on a Motion to Dismiss is the trial attorney’s equivalent of a slam dunk right in the face of opposing counsel. Essentially, it means the judge concluded PLA had no case on most of its claims.

The Court’s opinion first stated the general rule that an agency for no definite term is revocable at will. The court then stated the second rule that when an agency authority is coupled with an interest, it becomes irrevocable. PG will spare you a lot of legalese, but the following is from the opinion:

An agency is coupled with an interest where, as a part of the arrangement with the principal, the agent receives title to all or part of the subject matter of the agency. . . .

[t]o make the power irrevocable, there must be an interest in the subject of the agency itself, and not a mere interest in the result of the execution of the authority . . . .]). Words alone are not enough to establish an agency coupled with an interest.

What does this mean?

In order to have an “interest,” the agent probably has to have a claim on the copyright to the book itself, not a claim against the stream of income generated by licensing a publisher to publish the book. The words in the agency clause stating that PLA had “an agency coupled with an interest” were insufficient to give it such an interest.

The words in the agency clause stating, “The Author hereby appoints [PLA] irrevocably as the Agent in all matters pertaining to or arising from this Agreement,” did not create an irrevocable agency agreement.

Since PLA did not have an agency coupled with an interest, its agency was revocable at will. PLA was not entitled to a commission from monies earned under publishing agreements made after its term as an agent had ended.

PLA argued that the language giving it the right to “fifteen percent (15%) of all gross monies due and payable to the account of the Author under this Agreement,” meant that, in addition to monies generated by the original four-book contract, it also had the right to monies generated under the option clause.

The Court found this language did not specify that PLA would receive a commission from the new publishing agreement made after the Agency’s termination. The option clause was not an agreement. The agreement for The Black Cat was separate from the original contract.

As to the claims that PLA was entitled to commission under other agreements that were “extensions” of those negotiated by PLA, the Court used the same reasoning to deny those claims.

PG will note that Penguin got dragged into this litigation because of the Agency Clause it permitted to be inserted into the publishing contract.

As mentioned, the case is under appeal and it will be awhile before the appellate court hands down its opinion.

We learn three things that one New York judge in one court believes about Agency Clauses:

  1. A contractual claim to commissions based on future publisher royalties is not the same as having an “interest” in the book, which is the subject matter of the agency.
  2. Stating an agency is “irrevocable” has no effect whatever in the absence of a specific interest in the book.
  3. Stating that the agent has an “agency coupled with an interest” does not prevent the author from terminating the agency at any time.
  4. Once the agency is terminated, the agent has no claim against royalties paid under later contracts absent a specific contractual clause to that effect.

Here’s a link to the court opinion.

Agency Clauses

11 October 2019

Based on some questions from clients, PG thought it might be a good idea to republish this earlier post he wrote and published here several years ago.

Agency Clauses

An agency clause may be inserted into a publishing contract between an author and a publisher. In essence, a typical agency clause provides that the agent may receive royalty payments on behalf of the author and has authority to act in the name of the author with respect to the contract.

Here’s an example:

All sums of money due to the Author under this Agreement shall be paid to the Author’s agent, Annie Agent, of 321 Applesauce Avenue, New York, NY 10023, U.S.A. (hereinafter called “the Agent”) and receipt by the Agent shall be a good and valid discharge of all such indebtedness and the Agent is hereby empowered by the Author to act on the Author’s behalf in all matters arising in any way out of this Agreement.   For services rendered and to be rendered the Author does hereby irrevocably assign and transfer to the Agent the sum of 15% (fifteen percent) as an agency coupled with an interest out of all monies due and coming due to and for the account of the Author under this Agreement.

To understand this beast, you need a teensy bit of legal background info. (I promise this won’t hurt too much.)

Since the agent doesn’t usually sign the publishing contract, the agent is a Third Party Beneficiary of the contract.

The classic Third Party Beneficiary example is a life insurance policy. Grandpa George buys a life insurance policy for $100,000 from Cornpone Mutual when he’s only Pa George. He names his three chillun, Bo, Lucille and Little George, as the beneficiaries. (Hint)

Grandpa George pays all the premiums on time, but gets careless around the hay baler one day and goes to meet his Maker. In pieces. The chillun tell Cornpone Mutual it’s time to pay up, but Cornpone says its policies do not cover hay baler accidents.

The parties to the life insurance policy are Grandpa George and Cornpone Mutual. The chillun never signed anything. Indeed, if they were under 18 at the time the policy was purchased, they were legally unable to enter into contracts.

The usual rule is that only parties to a contract can sue for enforcement or damages. This raises a problem. Grandpa George was a good man, so there are very few lawyers in the place where he has gone. There is also no email and Fedex guys who take packages there never return.

The children were named in the insurance policy, however. Although they didn’t sign, they are Third Party Beneficiaries so they can sue Cornpone Mutual in their own names.

Outside of a few clearly-defined fields, Third Party Beneficiaries are quite rare in the business world. When Passive Guy was practicing law, he would negotiate dozens of contracts with nary a Third Party Beneficiary in sight. The standard practice was to have everybody sign the contract if they had any rights under the contract.

However, in the wild and wacky world of publishing, agents are Third-Party Beneficiaries to a lot of publishing contracts. As will become clear during our discussion, Passive Guy thinks Agency Clauses only benefit the agent and can cause problems for both the author (obviously) and the publisher (don’t know if they’ve thought much about this).

So, in general terms, what does the presence of an agent as third-party beneficiary to a publishing contract mean? This is a weird area of the law, filled with lovely Latin phrases, serving primarily to fill out the semester in a Contracts Law class (which is one reason to have everybody sign the contract). PG will boil it down into fundamentals as they relate to an Agency Clause.

  1. If one or both of the parties to a contract violate the terms of the contract to the detriment of the Agent, the Agent can sue to enforce the contract.
  2. The Agent’s rights are subject to the terms of the contract.
  3. The Author and Publisher have obligations to the Agent to perform under the terms of the contract.

Isn’t this fun? Don’t you wish you could be a Third Party Beneficiary too?

Before we go further, let me make clear that Passive Guy is not anybody’s lawyer anymore. As much as he may love and admire you, PG is not your lawyer. Most publishing contracts will have a clause saying New York law applies to the interpretation of the contract. PG is not a New York lawyer either. Any legal discussions will be general in nature and New York or other state or federal laws may conflict with PG’s generalities. Hire your own lawyer if you want legal advice.

So, let’s start dissecting the Agency Clause so see where we have some wiggle room. Some agents just use an Agency Clause without a separate Agency Agreement between the Author and Agent. Our analysis will assume this is the case. If there’s a separate Agency Agreement, things can become much more complicated.

Passive Guy wants you to see this clause through PG’s magic contract vision glasses.

What does Passive Guy’s super-power vision see here?

1. Purple highlights – Unsurprisingly, the Agency Clause is about money only. Potential benefits or compensation other than money are not covered by this clause. Something that could be easily converted to money or is a money equivalent – a Visa gift card, for example – might be covered. PG is assuming “money” is not a defined term in the Publishing Contract. (For you persnickety types, super-power vision is not perfect. The purple “an” is a mistake.)

2. Blue highlights – Only money payable to the Author is covered. Money payable to other people or entities is not covered. The assignment clause, if any, in the Publishing Contract would make for interesting reading.

3. Yellow highlights – The Agent is authorized to act on Author’s behalf. In the oh-so-ever-humble opinion of PG, this gives rise to the classic obligations that an agent owes to a principal. These include always acting in the principal’s best interests, disclosing conflicts of interest, etc., etc.

Arising in any way out of the Agreement is broad.

For services rendered and to be rendered is interesting in light of the Ralph Vicinanza agency matter discussed previously. This implies an ongoing stream of services and is specifically worded as consideration for the ongoing 15% agency fee. If no more services will be rendered, there’s an argument no more agency fee should be paid.

4. Green highlights – PG never likes irrevocable agreements where one party is providing services to the other. The services may start out just fine, but if they go bad, you want to be able to stop paying for them.

If this is the only written description of the Agent’s agreement with the Author, then no term – time period – for the agency exists. It’s not one year or five years or a hundred years. Generally speaking, an agency agreement that doesn’t have a term is revocable at will by the principal.

Agency coupled with an interest is an agency in which the agent has an interest in the property regarding which he or she is acting on the principal’s behalf. PG has another post on this ominous-sounding term coming out tomorrow, but, for our discussion today, essentially, it means the same thing as irrevocable. It’s a belt-and-suspenders approach to try to keep the Author from revoking the agency agreement. Absent a separate document actually describing the interest of the agent, it probably doesn’t add much.

5. Red highlights – Payments to the Author under other agreements, even other agreements with this particular Publisher, are not covered by the Agency clause.

So, putting all this together, what do we have?

Following are a few (but not nearly all) possibilities:

1. The Agent is empowered to act on the Author’s behalf respecting this Agreement, but nothing prohibits the Author or someone else – an attorney or agent – from also acting on behalf of the Author. The Agent doesn’t have an exclusive right.

2. All the Agent’s rights are tied to this specific Publishing Contract. New or separate agreements are not included. If the original agreement includes options for additional books in a series, PG thinks there is a good argument that if the Author insists on a separate agreement for subsequent books, the Agency Clause in the first agreement would not necessarily give the Agent a commission on subsequent books. (Again, we’re not dealing with situations in which there is a separate Agency Agreement.)

3. Since everybody is bound by the Publishing Contract, if that Contract has an out-of-print clause, the Publisher can declare the book out of print and enter into a separate agreement with the Author for something like an enhanced and revised version of the original book. There will likely be many other clauses in the Publishing Contract that allow the Publisher to effectively terminate the commercial life of a particular book.

4. If the Author receives an ebook amendment or rider to the original contract, and the Author no longer desires to use the Agent’s services, the Author might want to insist on a separate Publishing Contract for the ebook. Under the terms of the Agency Clause, the ebook contract might not be commissionable.

5. PG is sure the attorney who first came up with the for services rendered and to be rendered language thought he/she had done a cool thing in providing for future consideration from the agent for future commissions. However, if future services by the Agent are not satisfactory to the Author and the Author terminates the relationship for that reason, this contract language strengthens Author’s argument that the Agent’s commissions should end.

6. If the Author gives the Agent specific instructions, preferably in writing, about what the Author wants the Agent to do or not to do respecting the Publishing Contract, PG believes the Agent cannot act contrary to the Author’s instructions unless the Author asks the Agent to do something illegal or totally ridiculous.

7. If there is a fight between the Agent and the Author based on the Agency Clause, PG thinks it quite likely the Publisher would be dragged into ensuing litigation, particularly if the fight was about a separate contract between the Author and the Publisher for which no commissions were payable. PG wonders why a Publisher would open itself up to this possibility when the Agency Clause provides no discernable (at least to PG) benefit to the Publisher.

Passive Guy will close this very lengthy post by admitting puzzlement and worry.

When PG heard these Agency Clauses described before he saw one, he expected to find a serious lock-down legal provision. Instead, there appear to be lots of holes in the one used to illustrate this post. Others PG has received for his Contract Collection (Thank You!) are almost identical.

The reason PG worries is whenever it appears too easy to get out of what’s supposed to be a tight contract, PG fears he has missed something big or obvious.

Since we have a large number of informed publishing veterans visiting The Passive Voice, let me know if I’m really off-base in my analysis.

Contract Collection

If you have a publishing contract you would like to share with PG, he would appreciate you’re forwarding a copy to him. You can feel free to blackout/whiteout/cover up the names of any individuals or publishers involved in the contract prior to sending the copy of the contract.

PGContracts@thepassivevoice.com

Dolly Parton inks book deal with indie publisher

2 October 2019

From Page Six:

Dolly Parton has inked a book deal, sources exclusively told Page Six.

But the hot property by the singer went to smaller indie publishers Chronicle Books and Recorded Books in a joint pact, despite interest from the larger publishing houses.

Publishing insiders said the country-music superstar had interest from major imprints — but that she went with Chronicle and ­Recorded so she could get better terms on the tome’s audio rights.

“She would not go with a major publisher — though many were interested,” a source said.

The source added that Parton opted for the smaller imprints because, “no major publishers are willing to part with audio rights. Dolly wanted a term license that could revert [back to her] in 10 years.”

Link to the rest at Page Six and thanks to Judith for the tip.

Despite what her public persona may imply to some, PG remembers reading that Dolly Parton is a very savvy businesswoman. For PG, the OP adds evidence that this is true.

Authors Guild Says Cengage Failed to Renegotiate Contracts

26 August 2019
Comments Off on Authors Guild Says Cengage Failed to Renegotiate Contracts

From Publishing Perspectives:

The Authors Guild in New York has today (August 23) issued a statement on the class action lawsuit filed against Cengage by a group of writers for the service.

As Publishing Perspectives readers will recall from our mention of this case on August 19 that this is the second time writers have challenged the Cengage Unlimited subscription offer for students and educators, alleging that it violates the author agreement the company has had with its writers.

The new case, as charges that Cengage’s switch to the subscription model changes the royalty formula by which authors were on contract to be paid.

As the legal team at the guild is describing it, the authors now are in court against Cengage “for violating the terms of their contracts by unilaterally changing their payment structures from a traditional per-sale royalty to a relative-use share, thereby lowering their income dramatically.

. . . .

Throughout the first round of legal action, which led to a settlement in October, Cengage’s leadership, under CEO Michael E. Hansen, maintained that its writers were informed and that its development of the subscription model didn’t violate their contracts. In one interview with us, Hanson suggested that authors could well benefit in their usage-based payments as students and instructors explore more subjects and information they can find on offer.

By the end of April this year, Cengage Unlimited was announcing more than 1 million subscriptions since the launch of Unlimited in August 2018.

But a year earlier, the company had been engaged in an effort to defend the efficacy of the subscription model for authors, stating that it was “disappointed” to find some of the writers filing a complaint.

At the time, the company stated, “We have communicated clearly with our authors that the subscription service is consistent with the terms of their contracts, which we continue to honor. … Our authors, like those at our competitors, have seen declining royalties as a result of high prices that lower demand. The subscription service addresses students’ concerns and enables a more sustainable business model for the company and our authors.”

Now, the Author Guild’s legal assessment of the situation is that the change in Cengage’s approach–”to relative-use of an author’s title as compared to other titles in the same revenue pool, instead of paying the author a traditional per-sale royalty provided for in the publishing agreement”–is problematic in ways the company knows from the first court contest.

. . . .

“Rather than negotiating the terms in good faith and giving authors a chance to bargain for their fair share of digital subscription revenues, Cengage unilaterally decided what its authors’ contributions were worth. In doing so, Cengage took advantage of authors, hedging that few authors would have the resources to mount a lawsuit.”

. . . .

[I]n the fall of 2017 [Cenage CEO Michael Hansen] surprised much of the industry–and even his own sales staff, in his telling of it to Publishing Perspectives–by announcing that some 22,000 pieces of content would be made available by subscription. “I’m not in the business of getting standing ovations,” Hansen said to us at the time with a laugh. “But at this last sales conference when we announced it in Texas, the reaction was, ‘This is bloody brilliant. This solves the price objection, it just solves it.’”

. . . .

And as early as 2016, Hansen had worried aloud in making an address to Klopotek’s Publishers’ Forum in Berlin under Rüdiger Wischenbart’s direction that “We as an industry didn’t care about students.”

By that, he meant that faculty members had become the consumer-targets of the educational industry. Cengage had seen a single quarter drop of 23 percent of sales once students had rejected $150 to $200 textbooks. Facing $5.5 billion in debt, Hansen said, “was the least of our problems. We had never designed a textbook with a student sitting next to us.”

. . . .

Update, August 26: In response to Publishing Perspectives’ request, Cengage has sent this statement:

“We are disappointed to see these complaints against our efforts to improve students’ access to affordable, quality learning materials.

“Since its inception in March 2011, the MindTap learning platform has consistently helped students achieve higher retention, grades and confidence. However, despite significant investments in proven products, it became increasingly apparent that students were not able to afford them. Our authors, like those at our competitors, saw declining royalties as a result of high prices that lowered students’ demand.

“The Cengage Unlimited subscription service was created to address this longstanding problem. It also enables a more sustainable business model for the company and our authors.

“We have communicated clearly with our authors that the subscription service is consistent with the terms of their contracts, which we continue to honor. Since the service launched, we are in regular communication with them about the impact of the subscription on their royalties.

“We look forward to vigorously responding to these complaints as we remain steadfast in our belief that our industry must do more to contribute to affordable higher education.”

Link to the rest at Publishing Perspectives

Of course, it’s all about the students. Over many years, textbook publishers have reduced their prices year after year to help rein in the escalating cost of obtaining a college education and allow students to minimize the long-term burden of paying back large student loans.

From Vox:

Hannah, a senior at a private university in New York City, can’t think of a single semester when she bought all the books she needed for her classes. “Even when I was studying abroad,” she said, “there was no way for me to get through the semester without dropping $500-plus on textbooks, which I couldn’t afford.”

So she didn’t buy them. That semester, Hannah, who asked that her name be withheld due to privacy reasons, found most of the books she needed on Scribd, an e-book subscription service. “I used my free trial to do pretty much all my work for the semester and to take screenshots of things so I could access everything once the trial ended,” she said. If she couldn’t find them there, then she would do without.

Hannah’s tuition and housing is covered by scholarships, but she has to use student loans to pay for her health insurance; she pays for other necessities, including textbooks, out of pocket. In other words, her generous financial aid package isn’t enough to cover the essentials. Her situation is far from unusual: A 2014 report by the Public Interest Research Groups found that two-thirds of surveyed students had skipped buying or renting some of their required course materials because they couldn’t afford them.

Textbook publishers, for their part, have begun acknowledging that textbooks and other course materials have become so expensive that some students simply can’t afford them, even if it means their grades will suffer as a result. Publishers claim that new technologies, like digital textbooks and Netflix-style subscription services, make textbooks more affordable for all. But affordability advocates say that if anyone is to blame for the fact that textbook costs have risen more than 1,000 percent since the 1970s, it’s the publishers — and, advocates claim, these new technologies are publishers’ attempt to maintain their stranglehold on the industry while disguising it as reform.

. . . .

Some professors don’t assign textbooks at all, instead opting to fill their syllabi with a combination of journal articles and other texts, some of which cost money, some of which don’t. Thanks to the advent of textbooks that come bundled with online access codes — a single-use password that gives students access to supplementary materials and, in some cases, homework — other professors can rely on one textbook for almost everything.

As a general rule, though, the amount of money students are expected to spend on course materials has rapidly outpaced the rate of inflation since the ’70s. Affordability advocates point to two major factors behind this: a lack of competition in the higher education publishing industry, and the fact that professors, not students, ultimately decide which texts get assigned. Four major publishers — Pearson, Cengage, Wiley, and McGraw-Hill — control more than 80 percent of the market, according to a 2016 PIRG report. Major publishers also tend to “avoid publishing books in subject areas where their competitors have found success,” which ends up limiting professors’ options for what to assign.

Digital textbooks, especially those that come with access codes, have also contributed to rising costs. When students buy a textbook, they aren’t just paying for the binding and the pages; they’re paying for the research, editing, production, and distribution of the book. And when that book comes with an access code, they’re also paying for the development of — and, as the name suggests, for access to — all kinds of supplementary materials, from lessons to videos to homework assignments.

Access codes, the PIRG report notes, also undercut the resale market. Since the codes can only be used once, the books are essentially worthless without them. They can also prevent students from turning to other cost-saving measures like sharing a book with a classmate.

Kaitlyn Vitez, the higher education campaign director at PIRG, told me she’s met students who couldn’t afford to buy books that come with access codes, even if they knew their grades would suffer. “One student at the University of Maryland had to get a $100 access code to do her homework and couldn’t afford it, and that was 20 percent of her grade,” Vitez said. “So she calculated what grade she would have to get on everything else to make up for not being able to do her homework.”

“On a fundamental level,” Vitez said, “you shouldn’t have to pay to do homework for a class you already paid tuition for. You shouldn’t have to pay to participate.”

. . . .

Student advocates don’t expect the move toward truly affordable course materials to be led by publishers. Instead, they’re encouraging professors to adopt — and help develop — free, open source textbooks. Kharl Reynado, a senior at the University of Connecticut and the leader of PIRG’s affordable textbooks campaign, told me she’s had to pay “upward of $500” for books and access codes and has dropped courses because she couldn’t afford the costs. “I’ve had friends who spend entire paychecks on just their textbook costs in the beginning of the semester and had little money left over to cover food, gas, and sometimes, in extreme cases, rent because of it,” she said.

“We work closely with students and campus partners such as the UConn Library to promote open textbooks to different professors and educate students on their options,” she added.

The real challenge is getting professors, who are ultimately responsible for which books get assigned, to adopt the free options. Professors don’t assign books by major publishers or books with access codes because they want students to suffer — they do it because, more often than not, it’s easier.

As Vitez noted, an increasing number of universities are replacing full-time, tenured staff with adjunct professors. Adjuncts, many of whom are graduate students, are paid by the course, typically don’t receive benefits, and occasionally find out they’re teaching a class a few weeks before the semester begins. In other words, they don’t necessarily have the time or resources to spend the summer developing a lesson plan or to work alongside librarians to find quality materials that won’t come at a high cost to students.

That’s where books with access codes come in. These books come loaded with vetted, preselected supplementary material and homework assignments that can be graded online. They require a much smaller time investment from underpaid instructors.

Link to the rest at Vox

What Writers Need to Know About Morality Clauses

3 August 2019

From Electric Lit:

In 1921, the silent film star Fatty Arbuckle was accused of raping and murdering the actress Virginia Rappé at an illicit gin party he’d thrown in his hotel room. Though Arbuckle was acquitted in court, the damage to his reputation ended his career and cost his employer, Universal Studios, a lot of money. As a result, Universal began to protect its investments by including morality (or morals) clauses in their contracts, which allowed the studio to simply fire any actor who acted badly off-set.

While morality clauses became standard in Hollywood, the publishing industry never really followed suit. An author’s obligation has been to deliver their work, not uphold a certain standard of behavior. It was never a secret, for example, that Norman Mailer stabbed his first wife or that William S. Burroughs murdered his second. It didn’t need to be; for better or worse, an author’s book was seen as a thing apart from their personal life. Or insofar as their personal life was relevant, moodiness and depression or even abusive tendencies have long been considered part of the “artistic temperament” and didn’t detract from sales.

But cultural standards are changing, and customers are more likely to let an author’s personal behavior determine whether or not they will read their book. This shift has become more visible since the beginning of the #MeToo movement, when allegations of sexual assault, harassment, or misconduct against authors, including best-sellers like Junot Diaz, James Dashner, and Bill O’Reilly, has led to author boycotts, rescinded or canceled prizes, and plunging sales. The stakes in publishing aren’t Hollywood-level high (in 2018 Netflix announced it had lost $39 million for unreleased content “related to the societal reset around sexual harassment”), but they can be considerable: O’Reilly was earning seven-figure advances for his best-selling Killing series before his decades-long sexual harassment history came to light. In an era where publishers are still making big bets on individual writers but overall profits are strained, a single scandal can harm their bottom line, and publishers—especially big houses like Simon & Schuster, HarperCollins, and Penguin Random House— have increasingly turned to morality clauses to protect themselves.

These clauses are meant to empower publishers to easily terminate contracts without going to court. That means that they are manifestly set up to protect the publisher, not the writer. You only need to look at a morality clause’s vague language to see how wide the net is for an author’s misconduct: for example, if an author’s conduct results in “sustained, widespread public condemnation…that materially diminishes the sales potential of the work” (in the words of one publisher’s contract) or “ridicule, contempt, scorn, hatred, or censure by the general public or which is likely to materially diminish the sales of the Work” (in the words of another), a publisher can cancel a book and, in some cases, demand the return of any advance payments.

. . . .

But as much as I would like for such misconduct to have consequences, this isn’t the way to go about it. For one thing, the self-protectively vague nature of the offenses described in morality clauses means that there’s no reason to assume they will only be used to punish harassment or assault. Even more difficult to swallow is that morality clauses are triggered by allegations, not guilt. A publisher can let go of a writer who has been accused of a crime like sexual harassment or libel without there ever being formal charges, much less a conviction in court.  And the alleged misbehavior doesn’t have to have happened anytime recently.

. . . .

Penguin Random House specifies in their contract that they can fire any author whose “past or future conduct [is] inconsistent with the author’s reputation at the time this agreement is executed.” Given that publishers aren’t hurt by the actual misconduct but by the backlash that undermines book sales, it’s irrelevant to them when the deed occurred—and anything in an author’s life becomes fair game.

Because morality clauses are relatively new to publishing and agents often handle contract negotiations, some writers aren’t even aware that they’re in their contracts.

. . . .

The Authors Guild of America, which is vocally against morality clauses, points out that women and people of color, who are subject to more online trolling, are especially vulnerable and “may choose not to speak out in their own defense for fear of drawing internet fire that might result in a contract termination.” The wording of a morality clause is so vague that a publisher spooked by a coordinated online pile-on could theoretically cut and run even if the author says nothing.

Link to the rest at Electric Lit

The list of reasons not to deal with traditional publishers seems to grow longer by the day.

However, if an author is trapped in a for-life-and-beyond publishing agreement, he/she might cook up a project for her/his local writing group to create a faux event to trigger a publisher’s morality clause, then announce the hoax later.

Please note that this is an instance of black humor deriving from the ongoing debasement of authors by major publishers through increasingly unfair contract terms and PG does not recommend that any author actually try this stunt.

Although he admits, such a scheme could provide great fodder for a self-published book:

How I Ruined My Reputation Just To Get Out of

My Publishing Contract with Random House – A Black Comedy

I Categorically Deny That I Ran Naked Through the Offices of The Authors Guild!!

 

Someone Disagrees with PG – Again – The Sequel

22 July 2019

For background on this post, see Amazon’s Upcoming Audible Captions Feature = Unhappy Publishers, and Someone Disagrees with PG – Again. And do read the many excellent comments to each post.

So Audible has stepped into a hornet’s nest with its plan to provide audiobooks with captions. PG has stepped into a related hornet’s nest by saying he thinks it’s a good idea. The hornets claim it is an unauthorized rights grab by Audible.

PG says, “Let’s look at the contract.”

PG has no access to contracts between Audible and major publishers. However, all the world has access to Audible’s Audiobook License and Distribution Agreement which is available to indie authors and publishers of all sizes and shapes. The agreement includes a notation that it was last revised on June 1, 2017. The version PG will refer to has been downloaded today.

The license uses the term, Audiobook frequently. In the second paragraph of the Agreement (unnumbered) we see a definition of the term as it will be used in the Agreement:

the audio recording of the book(s) you have identified on ACX for the grant of distribution rights (any such audio recording as submitted by you or as modified pursuant Section 3(a) below, an “Audiobook“)

[Begin PG aggravated monologue]

There is no Section 3(a).

PG suspects that, at some point, perhaps the last revision, some sort of legal stylist played with the contract, formatting it in a font with Audible’s corporate orange and changing the numbering scheme, and nobody in legal carefully reviewed the modified piece of art for designer-caused errors.

In PG’s superlatively humble opinion, contracts should present a boring appearance. Font stylists and brand experts should be kept far away from contracts, online and otherwise.

Additionally, the last person to review contract language should be an attorney and one of the tasks of that person is to always, always, always check each and every cross-reference in the contract. PG understands that you didn’t go to Harvard Law School to check cross-references, but an error in a cross-reference could be disastrous.

[End PG aggravated monologue]

Generally speaking, when a court construes a contract, rather than adopting a view which converts a portion of the contract into a nullity, the court will attempt to determine what the contract draftsperson was trying to accomplish.

In this case, PG thinks the reference to Section 3(a) originally was a reference to what, in the restyled agreement is currently Section 4.1.

Right to Edit. Audible may modify, reformat, encode, adapt and edit the Audiobook to make the Audiobook compatible with the Audible service, including but not limited to by (a) adding Audible’s standard intro and outro, and (b) removing flaws or audio elements that are, in Audible’s judgment, incompatible or inconsistent with the Audible service (e.g., playback instructions, microphone bumps, distortion, ambient sound, etc.).

Even if a judge determines that the reference to 3(a) is a nullity, Section 4.1 is still part of the agreement and grants Audible the extensive rights described therein. The section 3(a) reference would have clarified that the defined term, Audiobook, included products arising under Audible’s Right to Edit provision.

End of all of PG’s nittery-pickery, let’s get back to whether Audible is permitted to create captioned audiobooks or not.

Again, on the first page of the contract, we find Section 2.1.:

You grant Audible the exclusive license to use, reproduce, display, market, sell and distribute the Audiobook throughout the Territory in all formats now known or hereafter invented from the date you accept this Agreement until the date that is 7 years from such date (such 7 year period, the “Initial Distribution Period”). [emphasis supplied by PG]

Section 2.1 covers audiobook licenses by which the author/owner grants Audible exclusive audiobook rights. Section 2.2 covers non-exclusive audiobook licenses granted to Audible:

You grant Audible the non-exclusive license to use, reproduce, display, market, sell and distribute the Audiobook throughout the Territory in all formats now known or hereafter invented from the date you accept this Agreement until the date that is 7 years from such date (such 7 year period, the “Initial Distribution Period”). [emphasis again supplied by PG]

Alert readers will note that the other than the change from an exclusive to a non-exclusive license, the wording is identical.

So, where does the “rights grab” accusation leveled at captioned audiobooks end up after considering the quoted provisions?

Is a captioned audiobook a form of audiobook that was either known at the time the author signed the contract or invented after the author signed the contract?

PG thinks the answer to this question is affirmative.

Is a captioned audiobook something other than an audiobook, some sort of ebook with sound hybrid? Perhaps, but PG thinks it’s hard to make a persuasive argument that escapes the contract language discussed.

Section 4.1 grants Audible the right to modify, reformat, encode, adapt and edit the Audiobook to make the Audiobook compatible with the Audible service.

Is Audible “modifying, reformatting, encoding, adapting and editing” the original audiobook to create a captioned audiobook?

PG thinks the answer to this question is affirmative.

If Audible is going to offer a captioned audiobook as part of a new or improved Audible service, PG suggests that part of Section 4.1 is satisfied.

PG will note that Section 10 does include the following language: “All rights in the Audiobook not granted in this Agreement to Audible are expressly reserved by you.”

However, if the contract grants rights all audio formats “all formats now known or hereafter invented” and also permits Audible to “modify, reformat, encode, adapt and edit the Audiobook” for its new captioned audiobook offering, PG suggests the Audible authors have granted Audible that right.

 

Next Page »