A Brief Primer on Electronic Rights for Authors
What's happening to authors' electronic rights is not good: These rights are being bought cheaply by publishers, and held on to by publishers without any benefit to the writers. In other words, authors are getting little or nothing for the electronic rights to their books and articles.
Several years ago, nobody had any idea how much electronic rights could be worth. Sure, there were CD ROMS and the Internet, but how could a publisher --or author-- make money from these mediums? Now it's becoming clearer that both author and publisher can make money from the sale of electronic rights, but in many cases, only publishers are benefiting.
How do publishers benefit from electronic rights at the expense of authors? First, publishers often "buy" these rights for a trivial sum. While most subsidiary rights are split equally between the author and publisher (except for first serial rights, which are split 90% - 10% author/publisher), publishers often get away with offering authors a small split for electronic rights, as low as 5%. Publishers use all sorts of vague and poorly-argued reasons to justify this, such as "It costs us a lot to promote electronic rights"--which is not true.
Second, publishers display part --or all-- of an author's book on their web site for free, using one author's work to promote their other books. So a publisher may say, "Read Jane Smith's latest how-to book at www.iamacheappublisher.com." Jane Smith gets paid nothing. It's great when publishers promote an author's book, but what's happening here is that the publisher is promoting itself (or other books) at Jane Smith's expense.
Third, publishers use electronic rights to keep a book in print. A book should go out of print when less than a certain number of paper copies are sold every year, so that the rights can revert back to the author. When a book is out of print and the rights have reverted to the author, the author can resell the book and make money. (That's something we've found can earn a decent return.) But if a publisher keeps a book in print in perpetuity by retaining the electronic rights and selling a few electronic copies a year, then the author loses out on the potential for more.
Fourth, publishers are beginning to anthologize authors' books -- that is, combine one author's book with other books on a CD ROM. Let's say you've written a book on how to care for your over-anxious kitten. A publisher may put out a CD on cat care, combining your book with a dozen others. Depending on your contract, a publisher could pay you nothing or 1/12 of your standard royalty rate, because your book is in an electronic anthology along with eleven other books.
These are just some ways that publishers can prosper from electronic rights, while authors get little or no money for their rights. There are other things that publishers do with electronic rights that hurt authors, as well.
Adler & Robin Books sells electronic rights both in conjunction with an author's proposal, or separately. We have a two-pronged approach to electronic rights. We sell electronic rights independently of other rights. For example, we are selling authors out of print books to publishers of electronic books (battery-operated, handheld devices for reading books). Just because a publisher feels that bookstore sales are no longer justified doesn't mean that the life of the book is over. Books can have a second life as electronic books (which, by the way, pay royalties from between 25% - 75%). We also try to withhold electronic rights from a publisher's contract; we can justify this because we are actually selling electronic rights.
What should you look out for in a publishing contract as far as electronic rights are concerned? Here are some points to keep in mind:
1. Electronic rights should be split at no less than 50-50, author/publisher. Ideally, the split should be 90-10, author/publisher, and the publisher should pay an additional advance for the electronic rights. Electronic rights should not automatically be assumed to go to a book publisher. After all, book publishers are in the business of publishing paper products, not bits and bytes.
2. Royalties from electronic rights should not be counted against the author's advance. They should be in addition to the advance.
3. If the publisher does not sell electronic rights within 18 months from publication, then the rights should revert to the author. Publishers should not sit on the electronic rights, hoping they will become valuable down the road.
4. Electronic rights should not include posting or displaying an electronic version of the book, or excerpt from the book, but must include sales from which the author benefits. A publisher should not be allowed to use one author's book to promote other books.
5. "Out-of-print" must be precisely defined, so that if the publisher is not selling a minimum number of bookstore copies, then all the rights revert to the author. The last thing you want is for a publisher to hold on to the rights to a book just to keep selling a few electronic copies. This point is worth repeating: When a book is out-of-print, that is, it sells less than 1,000 or so copies a year, all rights, including electronic rights, shall revert to the author. Among other things, this gives the publisher some incentive to sell the actual book.
6. Watch out for contract language that lets publishers not pay authors royalties for electronic rights. There are a lot of ways this can happen, including a clause that specifies that the author will be paid nothing if the work is part of a large anthology (as might happen if the book is included in a CD ROM.) Royalties based on net receipts have a way of turning into zero royalties for electronic rights.
7. Authors should be paid higher royalties for copies sold electronically, than for paper copies. The same book that costs a publisher $2.00 to print, may cost the publisher only 5 cents to "print" electronically; the author should benefit from this savings, too.
6. Authors should try to retain control of electronic rights as much as possible. If you have a good reason for keeping electronic rights, such as you already have interest from an electronic book publisher, then you have a good reason to assert your right to keep electronic book rights. In any event, all rights, including electronic rights should revert back to the author once the book is out of print. I'd make this a non-negotiable term.
One way to get a jump start on protecting your rights is to register your book's title as a web site. Visit Network Solutions to quickly, easily, and inexpensively register a domain. (You can also register the title of any projects you have in the works.)
It can no longer be said that "nobody knows the value of electronic rights." People are making money from electronic rights, and authors should be included. Please feel free to get in touch with us if you have any questions about electronic rights. You can write us at the address below or send an email.
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