“Brainstorming on the Beach” Conference with Novelists, Inc.

 Contracts and Copyrights                                                                                                                                       

Panelists:

David Forrer, Literary Agent

Alan Kaufman, Literary Attorney

Carly Phillips, NYT Bestselling Author

Deb Werksman, Editorial Manager, Sourcebooks

Donna Hayes, Publisher and CEO, Harlequin Enterprises

Chris Kenneally, Copyright Clearance Center

Al Zuckerman, Literary Agent and Founder of Writers House

Brenda Hiatt, Author

Here are my notes, keeping in mind this is what I heard and my interpretation.

Ad revenues surrounding e-books will increase.  For example, books will be sold on Google with ads surrounding them.  This will be new revenue to the publishers, and authors should share in it.  Publishers have to staff up their royalty departments.

Regarding reserves against returns, one panelist believes they should not continue beyond two royalty periods. A book having ongoing sales a year or more after it was published should not have reserves held back. Another agent agreed that if there are ongoing sales above the advance, there should no longer be reserves.

Editors defended their reserves policies. One editor said backlist books are out there for a long time.  50% sell-through is considered a success in mass-market, but there are still going to be returns.  Trade paperbacks can be returned at any time.

Regarding piracy, is it cannibalizing book sales, or would those readers not have bought the book anyway?  One way to combat piracy is through education.  Mention it in your blogs and on your website.  You should let people know, those who feel entitled to getting whatever they want off the Internet, that information is valuable and it is not free. Another solution is to write to the advertisers on pirate sites and alert them to violations.

One panelist said she thinks the used book marketplace as we know it will go away.  If publishers price eBooks reasonably, legitimate readers will buy them.

What about the issue of returns?  Why are we still doing them at all?  Because booksellers won’t stock the books otherwise.  There have been attempts to launch imprints without returns, but the experiments failed.  Booksellers demand return policies.  There have even been eBook returns when a customer clicks on the wrong book or downloads the wrong format.

Reversion of rights and the definition of a book being in print entered the conversation.  We should try to restrict this clause to trade editions, English-language editions, or a dollar amount like $250 sold over two royalty periods.  You could also try to narrow this clause by saying the book is considered to be in print if 300 copies are sold electronically within two royalty periods.  Publishers want to hold onto your rights and they will do so forever because of the clause “in any form whatsoever” as defining a book in print.

A similar phrase to watch out for is when a book is considered to be in print “in any format now or yet to be invented.”  This is a sticky issue today as publishers are trying to grab whatever rights they can. “They have a huge challenge coming up and are running scared.”

According to one panelist, the most important rights to keep are your foreign and film rights.  Try for a movie bonus in your contract, i.e. you get extra money if your book is optioned.  Try to get an audio rights reversion clause for six months or later so if the publisher does not exercise these subrights within the specified amount of time, the audio rights revert to the author.  50% of net is a good deal for audio rights.

Also try for a Look Back clause regarding eBook royalties.  For example, after three years, you can renegotiate your royalty rate.

The advantage of digital first pubs: no advance but a higher royalty rate. The size of the eBook market is equivalent to 67% of mass-market sales or 55% of hardcover sales.  The Book Industry Study Group is looking to measure data but Walmart, for example, doesn’t report to them.

Copyright will be more important than anything in the future.

Some publishers are sticking a morals clause in contracts now.  This means the publisher can cancel the contract if the author behaves in an immoral manner.  Try to cross this one out.

And a final quote: “If you’re confused, you’re beginning to understand the problem.”

Panel on eBooks is coming next.