From Kristine Kathryn Rusch:
I need to be clear as I start this post. We writers create intellectual property. We license our copyrights. We do not sell stories. In fact, the stories we tell, along with their titles, are often not copyrightable. The form in which we tell that story—the order of the events, the order of the words we use,—those things are copyrightable, but the basic boy meets girl, boy loses girl, girl discovers she’s fine on her own storyline can and does fuel a thousand books and movies. (That’s why so many memes over the holiday season made fun of the romance movies on Hallmark. Because the movies—all copyrighted in their own right, all different in the copyright sense—share a lot in common.)
If you don’t understand copyright and you consider yourself a professional writer, then you do not understand the business you are in. If you have published a novel, traditionally or indie, and you do not understand copyright, you are volunteering to get screwed over and over and over again. I say this often, and I’m saying it loudly again, because the trend for 2019 and beyond is that every organization you do business with will try to take a piece (if not all) of your copyright on each and every one of your projects.
Your job is to protect that copyright.
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Forbes actually published an article in fall of 2018 titled “What Authors Should Do When Their Publisher Closes.” You can click over there if you want. The advice isn’t good, because as someone in the article says, what an author should do varies based on the author’s contract. And if the author has an agent, then they’re probably screwed. If the author doesn’t understand copyright, then they’re definitely screwed.
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I recommend publishing indie, because that’s the best way to protect yourself and your writing income. You’ll have a career if you do that. Your career might vanish on you if you try to remain traditional. Or, rather, you will write as a “hobby” while you make your living doing something else.
Yes, I’m being harsh, but that’s because the intellectual property apocalypse that I’ve been warning you about is upon us. The trends are there, and the signs that traditional publishing (and all of the other big entertainment organizations) know about the value of intellectual property are becoming clearer and clearer.
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For years now, the Big 5 traditional publishers have had contracts that essentially transfer the entire copyright of a novel from the author to them. The contracts don’t say that explicitly, but when you read the contract as a complete document (which is how you should read it), you realize that the sum total of what the clauses mean is that the writer retains no part of the copyright, and is only entitled to a tiny percentage of the money that copyright earns.
The reason these contracts changed about a decade ago had nothing to do with publishing and everything to do with mergers. As these publishing companies became part of big international conglomerates, many of them entertainmentconglomerates, the legal teams redrafted the contracts to do the copyright grabs.
Most writers had no idea what they were signing, and most of their agents didn’t either. Agents are not trained lawyers. A handful of the big agencies have lawyers on staff, but most of those agencies are concerned with making the agency money, not with making the writer money. So a lot of the contracts are structured to pay and protect the agent, while bilking the writer.
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Up until a year or so ago, most of the Big Five continued to operate like traditional publishing companies have since the 1990s—a focus on publishing a lot of titles, hoping that some will stick and become bestsellers. But that strategy isn’t working, and sales are down precipitously.
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[Simon & Schuster] has been in a media conglomerate since the 1980s. I’m not going to go through its tortured history, which runs from Paramount to Viacom and beyond, but realize this: It became part of the CBS Corporation officially in 2005. Around then, it became impossible to get book rights reverted, which is one of the tricks that is recommended for writers in the Forbes article I cited above. (How 1995. Sigh.)
S&S has experimented with electronic books since the 1990s. Dean and I personally made a lot of money in the early 2000s when S&S realized they hadn’t licensed e-rights for Star Trek books. (Dean and I wrote a bunch of them in the 1990s). S&S has tried to have a self-publishing arm since 2012, and they’re doing a lot of things that require writers to pay for services that publishers used to provide.
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The more IP a company acquires, the more its value goes up. Even if they don’t create anything from that IP. Acquiring a novel’s copyright—with all its potential spinoffs, TV shows, toys, comics—increases a company’s value tremendously.
Read that paragraph again, because the information therein is the key to this whole piece.
The more IP a company acquires, the more its value goes up. Your novel is IP. If they acquire it, their bottom line goes up, even if they never do anything with that IP. Got that?
That’s why S&S stopped, in 2000 or so, reverting the rights to the novels they acquired. Those novels equal more earnings potential—and they allow the company to maintain a value that it wouldn’t have otherwise.
I’ve been warning writers about this copyright grab by corporations for some time, but it was easy to ignore me because the Big 5 have not been (for the most part) exploiting (the legal term for developing or making use of) that copyright.
S&S finally is. That’s what Simon & Schuster’s CEO Carolyn Reidy’s heady year-end report was really all about. She called 2018 “the most successful year in Simon & Schuster’s history,” and yet she didn’t cite a single print bestseller as something that caused the success.
Instead, she touted the rise in audio . . . as well as a mention that sent a little shiver through me.
…[backlist sales now] comprise a higher portion of our revenue than at any time in memory…while readers wanting the tried and true is an industry-wide phenomenon, our concerted effort during the last few years to acquire books with the potential for long-term backlist sales has yielded dividends.
This article does not specify what exactly she means by “backlist sales.” Does she mean actual ebook and print sales, or other licensing, such as foreign rights and so on? Clearly S&S is exploiting the audio rights clauses in their contracts.
What is clear, however, is that a big traditional publisher has finally figured out that not only does their backlist have value in raising the company’s worth, but it also has earnings potential that can be exploited in 2019.
Why does this send a chill through me? Because if one traditional publisher learns it, the others will learn it as well. And the ability of writers who have sold their work into traditional publishers to get the rights reverted will go down to almost nil.
Big traditional publishers will finally join their counterparts in the entertainment industry—the movie/TV companies, the music studios, the game companies—in demanding control of every aspect of the copyright from the original author.
Which means that if an author signs one of those agreements, the author will get pennies on the dollar (if that) for any rights—audio, movie, TV—rather than the kind of earnings writers could have gotten as recently as 10 years ago.
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And those of you who licensed mass market rights a few years ago, thinking you’d get your ebooks into stores, you probably already signed away most of the copyright, particularly if you went with Harlequin or Simon & Schuster.
Link to the rest at Kristine Kathryn Rusch
Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.
As usual, Kris incorporates a lot of intelligent business thought and advice into the OP (and her other posts in this series).
As PG has mentioned before, he has negotiated, drafted and/or reviewed a great many contracts during his legal career, including some large technology copyright and patent licensing agreements. As he has also mentioned before, the typical contracts between authors and traditional publishers are some of the most unfair and one-sided agreements he has seen.
In a prior era during which it was impossible for an author’s works to reach any sort of meaningful audience without a publisher to cover the costs of printing books and provide meaningful access to buyers for large numbers of physical bookstores, perhaps the value of a publisher’s services was an extremely large portion of the income generated by sales of a book.
However, in an age in which:
- Amazon is the largest English language bookseller in the world; and
- Opens its electronic doors to self published authors on terms substantially equivalent to those it provides commercial publishers; and
- Ebooks have the highest profit margin of any edition of a book a publisher sells; and
- Ebook editing, formatting and cover design of a quality comparable to that provided by a commercial publisher can be had for a few hundred to a few thousand dollars;
the real value of a publisher for a typical author compared to the effective cost of a publisher to that author has declined precipitously.
PG was about to discuss the value of branding for either an ebook or a printed book, but he will be uncharacteristically brief.
Does anyone go to an online or offline bookstore seeking out a Random House book? Of course not. They’re looking for an author, a genre, etc.
With respect to promoting and selling books, which brand name is most valuable, James Patterson’s or Little, Brown and Company’s?
Without singling out any particular literary agent or agency, PG will say, as a general observation, that agents famous and obscure don’t do anything significant to improve the contract terms for publishing contracts other than increasing the amount of the advance on some occasions. In particular, agents rarely if ever do anything to address the issues Kris discusses in the OP.
In some types of contracts — consumer loans, for example — federal and/or state legislatures have passed laws that prevent commercial lenders from including some contract provisions that are unfair or harmful to borrowers. Compared to the number of individuals who take out loans to purchase a house, automobile or dishwasher, however, authors are a tiny constituency and elected officials have much bigger fish to fry than commercial publishers.
However, perhaps as a result of such consumer protections, some authors may believe they are somehow protected from unfair provisions in publishing contracts between themselves and large publishers. That belief is incorrect.
Some of the most unfair provisions in a typical publishing contract are presented in the most innocuous manner imaginable.
Finally, there is nurturing. Publishers don’t just produce books. They nurture. Literary agents also provide nurturing in case publishers fall short in any way.
Like a baby duckling, a baby author needs to be nurtured and petted and encouraged and gently guided if she/he is to grow into a beautiful swan.
Who better to nurture such a delicate creature than a Kommanditgesellschaft auf Aktien headquartered in Gütersloh?
Off the top of his head, other than publishing, PG can’t ever remember ever having a business discussion that included the word nurture or any of its variants.
PG is reminded of a quote attributed to former president Harry S. Truman, “If you want a friend in Washington, buy a dog.”
PG suggests that if you want someone to watch over you, steer clear of the publishing business.