October 13th, 2010
First Things First

Sorry for being so late. I guess the conference shattered me more than I thought. A big CONGRATS goes out to LISA WINE. She won the copy of BLOOD LITE 2!!! Lisa drop me an email and I’ll get the book in the mail to you. Thanks to everyone who entered. 🙂

Now, onto the Novelist Inc. conference. This is a really difficult conference to write about because there was so VERY much information being shared. I decided the easiest way to break it down was by talks. The first panel I attended was called, ‘Contracts and Copyrights: Then, Now, And In The Future’. David Forrer, Alan Kaufman, Carly Phillips, Deb Werksman, Donna Hayes, Chris Kenneally, Al Zuckerman and Brenda Hiatt was on the panel. The discussion covered expansive clauses in contracts, legal pitfalls, subsidiary rights, and opportunities we have as authors and as publishers. Donna Hayes is a publisher and CEO for Harlequin and Deb Werksman is Editorial Manager for Sourcebooks. David Forrer is an agent with InkWell and Al Zuckerman created Writer’s House. Chris Kenneally is part of Copyright Clearance Center and Alan Kaufman is a literary attorney. The other two panelist are famous authors. Right off the bat, a question came up and Al Zuckerman jumped on the Sourcebook contract for being one of the worst he’s encountered. The gloves were off. Most of the bantering was about contract language and ebook royalty rights. The publishers defended the low ebook royalty rights while the agents and attorney said that they can’t continue to remain low. I’ve actually combined this talk with one given by Alan Kaufman and Peter Novins since it specifically targets negotiating contracts. My bad? 😉

What I took away from the talk was the following: Publishers are running scared due to the fast changes in technology. Their answer to being scared is to drastically change their boilerplate contracts into a massive rights grab. HarperCollins’ boilerplate is changing. MacMillan wants rights to derivative works (ie they can produce work from your book without your consent). YIKES! Alan Kaufman said that three of the major publishers he’s worked with recently have put items back into their contracts that agents fought ten to fifteen years ago to abolish. Al Zuckerman said that Writer’s House has added a clause to all their boilerplates which state that ebook royalty rates can be re-examined in three years of signing. If the author isn’t happy with the rate, he/she and the publisher can try to reach an agreement. If an agreement on the change to the royalty rate can’t be reached, the author can walk and take the rights with them. Another complimentary clause that can be added to the ebook royalty rate is something called, Escalators. Basically Escalators allow the ebook royalty rate to go up based on sales (ie 25% of net receipts for the first 5000, 35% of net receipts for 5K to 10,000, and 40% for 10K and up). Subsidiary rights and ebook royalty rates are an authors best shot at making a decent living in the publishing industry. Alan Kaufman said it was equally important to make sure that when you are looking at what it means for your book to be out-of-print that you get the clause expressed in UNITS, not dollars (ie 250 to 500 units for two consecutive royalty periods–the higher the better). Try to make it to where a work must stay in commercial availability. That way if your book drops below those numbers you can get your rights back. Grant of Rights clauses are now grabbing all ebook rights. Alan Kaufman said many publishers are calling the Grant of Rights clause non-negotiable, but he says everything is negotiable. He said in their panic, publishers are asking for right of first refusal on ebook rights or enhanced ebook rights. He said if you have to grant ebook rights, then only grant UNINHANCED ebook rights. Get rid of the first refusal aspects. The other land-mine is in the NON-COMPETE clause. Every word in that clause is loaded. You need to have the wording changed so you can utilize the rights you reserve in other parts of the contract (ie characters, anything that competes with the original work). Moral clauses should go. Period!

What does this all mean? Basically, now more than ever, an author really has to pay attention to every word in their contract. It was always important, but it’s even more so now. This is especially true in the subsidiary, ebook royalty rates, grant of rights, non-compete, out-of-print and option clauses. From what I heard, unless I land Writer’s House or an equally powerful agency to represent me, I will be hiring a literary attorney to go over whatever contract I get in the future. Even one that my future agent has negotiated. It’s THAT important. Also, I believe the Writer’s House clause about re-examining ebook royalty rates should be included in EVERY contract a writer signs. Ultimately they said that you as a writer need to know exactly what you NEED out of a negotiation and what you can’t accept. Know at what point you need to walk away. Think LONG TERM and three moves ahead at all times.

8 comments to “First Things First”

  1. Nice recap, thanks!

  2. I don’t have an answer to hard economic times besides watch everything on the expense sheet. I think it’s promising the publishers are trying to come up with ways to survive this down turn now rather than later. If the publishing houses pretend everything’s okay and then go bankrupt that certainly won’t do writers any good. Thanks for a great overview, Jordan.

  3. Thanks Charli!

  4. Bernard,

    The economic downturn has certainly hurt everyone. For publishers, it has turned up the pressure. I think much of their panic comes from the fact that despite all the signs most publishers chose to ignore ebooks and the ebook market. Many didn’t believe that it would ever effect their business model. Not all, but many put their heads in the sand and now they are paying for it. Like you, I hope they can survive. I expect several to make it. One speaker, an industry insider, at the conference though predicted at least two more will go out of business, possibly three. The breakdown was one large publishing house and two smaller ones. We’ll see if the predictions holds true.

  5. Phew! This is a lot of information to digest, even though you’ve probably only scratched the surface of the panels and discussions at the conference. Thanks for sharing!

  6. Evangeline, It’s a lot of information. And yes, even with the amount of notes I took I’m sure I missed a few things. 😉

  7. […] Blog. So far she’s done on on Piracy, The “Future of Publishing” Panel, and the contract negotiations […]

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