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Traditional Publishing, Non-Compete Clauses & Rights Grabs

Discussion in 'Publishing' started by A. E. Lowan, Jan 28, 2016.

  1. Russ

    Russ Istar

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    I met Joshua years ago at Ad Astra, thought he was a great guy and I suspect you get very good representation from him. I think he would be fun to work with as well.

    But I am not talking from theory or what I have heard. I am talking about contracts I have seen, or information I have gotten directly from the author, agents or editors involved in the deal. I try not to do the hearsay thing.

    I am happy to do the name dropping thing off line if you are curious where I get my information. I just think it is bad taste to do it in public.

    Pity that all the big names in the industry did not stand by their pledge. Are you part of the pledge and do you plan to honour it?
     
  2. FifthView

    FifthView Vala

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    I feel like I'm listening to Marie Antoinette debating whether to negotiate for cake or mousse tart.
     
  3. MichaelSullivan

    MichaelSullivan Maester

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    I think you are very confused. Both myself and The Author's Guide want to eliminate non-competes (and a whole bunch of other clauses that are bad for the author). Their position is that they are now trying to fix contract issues that I've been railing against for the past eight years. Why would I want to tell them to "rethink their approach" when they are finally coming around to my way of thinking?

    My complaint with the Author's Guild isn't what they are doing now - it's that they should have been doing it sooner.
     
  4. Russ

    Russ Istar

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    It was for the purpose of the wider discussion so that people can see that things are sometimes done differently and that there is no "one true way."

    You might want to relax a little.

    First of all it does happen that way and it seems the big audio companies really don't mind.

    And your analysis works if you assume you are going to earn out and you don't need/want the money now.

    Let's say, hypothetically, you are a debut author, or even a non-branded author and you realize that if you don't do well on your first book or two than you won't be signing any more contracts. In that case you might well decide that you prefer the larger advance so that you can use that money for marketing to make sure your first book or two make a big enough splash so that you get to contract #2.

    So in some circumstances the higher advance that it can entail can make a substantial difference for the non-branded author staying in the game.

    You cannot simply assume people selling their rights are in a similar circumstance to you.
     
  5. Russ

    Russ Istar

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    Sacher torte and salzburger nochrel or bust...
     
  6. MichaelSullivan

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    With what companies? In what capacities. As I said, I'm talking about big-five contracts. Prove me wrong. Print out the contracts you have access to, black out the author's names and the advance amounts, take a picture, and email them to me. I'd love to be proved wrong, but haven't yet. Many, many people have taken me up on that offer, and I've yet to find any that refute what I've put fourth.

    Hmmm...what could it be? Let's see.

    • Kameron has only been published through small presses: Night Shade Press and Angry Robots. I've been published through big-five publishers: Orbit and Del Rey. That's probably the biggest factor...although there are plenty of big-five authors who have smaller advances than Kameron received.
    • Perhaps you have heard that women make 70 cents for every $1 a man makes? Do you think pubilshing is immune to gender inequality?
    • Kameron has 5 books out I have 10 on the market and four more pending publication.
    • Based on Nielsen data, my first book sells six books for every one of Kameron's debut
    • I was self-published before traditional and already had a large fanbase - that has values to publishers, a debut author with no track record is a complete blank slate.
    • My publishers knew I was already earning a good income, they had to at least match that or they would have no chance.

    My debut had a much larger advance than Brandon Sanderson's - but he earns much more than I do - I wonder why that is? He (a) writes more than I do (b) has a large fan base (c) sells more copies.

    But you know what...besides advance, and a few minor points, already discussed, Brandon's contract is remarkably similar to mine.
     
  7. MichaelSullivan

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    I think Joshua does better than most - but as I said, even he can't get them to budge on the truly important issues.

    As I said, redact the information and share it privately. I'd LOVE to be proven wrong.


    You can't go by what they say, you can only trust what the contract reads. As I already mentioned...authors "think" they don't have non-competes and then they find out they do. And in fact, in a reddit discussion on this topic, Kameron mentioned that she and her agent reviewed the contract again recently and found a whole bunch of things that BOTH of them missed at signing. So there is a big difference between what they "think" the contract says, and what it "actually" says. Don't trust "conversations" as they may be based on assumptions that turn out not to be true. The only thing that matters is what is in the contract. And I feel like a broken record, show me and prove me wrong.
    I'm happy to continue the conversation in private. The more data points I have, the better.

    Me? Lol - no I was not one of the people I discussed - my sales are FAR too low to run with that crowd. I'm not even a blip to the like of them. And to be clear it wasn't "all the big names" it was a few of the biggest names. Would I honor such a pledge? I would never sign-up for such a pledge because I know it's not possible to honor. They were naive to think they could change the system - although I did applaud the attempt.

    My approach is much different. As I know I can't get them to adjust the royalty rates, I self-publish some titles. That way I get the higher royalty rates on the self-published books and that helps to offset the low-royalty rates on the traditionally published books.
     
  8. MichaelSullivan

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    Which is kinda my point. The "negotiable things" of the contract - are those that really don't matter. The TRULY important issues are the ones that you aren't going to change - and the ones that make the difference.
     
  9. MichaelSullivan

    MichaelSullivan Maester

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    There is certainly no "one true way" to publishing, (in other words the debates between self and traditional), but ask any agent (of any worth) and they'll tell you a right is ALWAYS better off in the author's hands than the publisher's.


    Given what proof? Sorry, I'm not going to take that as a truth because you said so. Let me have a drink with the audio producer who was used in such a way and let's see if they "don't mind." It could be that they had to "live with it" - but I can't imagine they are pleased. I sure wouldn't be if I were in their shoes.


     
  10. psychotick

    psychotick Auror

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    Hi,

    Fascinating conversation guys, but for me it misses the more important questions. The two sets of clauses that would trouble me as an indie earning a modest income would be the non-competes and the options. Both have the potential to jeopardize my income stream.

    So my questions would be given that neither of these clauses is ever likely to be struck out of a contract completely, what's a reasonable compromise? What can authors negotiate to?

    As far as non competes go, I'd obviously be interested in limiting the time period to either side of publication as much as possible. The figure of three months was mentioned and that sounded reasonable - unless I'm missing some fishhooks of course. I'd also, since I write in multiple genres, want to limit the non compete to the particular genre concerned with the book.

    With options I think the only thing that would concern me again would be time frames. I don't want to have a publisher spending five years with each and every new book I write, deciding whether or not they want to exercise their option to publish. So again, how far is reasonable when it comes to negotiating limiting options?

    The other thing - just a comment really - that seems to be playing out here is the question of advances. And my thought would be do they actually matter at all? I mean it's all very nice to say you've got an advance of x dollars etc. A little bit of an ego boost I suppose. But to my mind the important thing isn't the advance, but rather how the book sells. I know (or I've heard) that the majority of advances are never paid out, but I doubt those that aren't, miss their mark by much in most cases - publishers are more savy than that. Which means that most authors with contracts are going to get much the same money from their advances as they will from simply getting their royalty cheques. They simply have to wait.

    Now I'm not a paranoid conspiracy nut (must remember to put the tin foil hat away!), but it seems to me that advances are being used as a tool to control authors. Sign away these rights and you'll get this advance. When the better approach might be to say keep your advance, pay me my royalties at the end etc, and I don't like these clauses so lets get the red pen out!

    What are your thoughts?

    Cheers, Greg.
     
  11. Russ

    Russ Istar

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    Advances are guaranteed money, which to some people who are trying to make a living at writing is important.

    It is also a sign that the publisher is willing to invest in you and bare a significant portion of the risk. My good friend Steve Berry (MS has finally forced me to name drop :) ) likes to say that publishing a book is a risky venture and that the risk is spread differently depending on how large the advance is.

    Also a publisher has more reason to help promote your book if your advance is large. For the editor if a book that you put a small advance into flops it probably won't cost you your job. Now if a book with a huge advance fails that can be a significant problem. I wouldn't want to be the guy who bought Penny Marshall's book for Amazon for $800k.

    So the belief is, the larger the advance the more the publisher will work to make your book a success because they want you to be a success. It is better if their feet are close to the fire as well as yours.

    Of course big sales are always an important factor but it is always good for someone else to have skin in the game with you.

    On the other end of the scale, for the very successful author, (as MS mentioned above) some of them are getting such huge advances for each book that it appears that it will almost be impossible for the advance to be earned out in the reasonable term. Now the publishing industry rationale for this seems to be (without ignoring MS's theory on why they do it) is that they believe that they will eventually make the money back over a very long period (up to ten years some say) and that the big success of this book helps sell a great deal of your back list which makes up the difference.

    One author I know in that circumstance just loves the huge advance because "it gets me my $X million up front and it's someone else's problem if it earns out or not." His age and career development are also part of his consideration.
     
  12. Russ

    Russ Istar

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    With equal respect the information I am getting is that this model, where a low advance is believed to keep you in the game longer might be out of date.

    It seems that publishers are being harder on the mid list than ever, and the model where they would nurture a not-yet-profitable author's career along is pretty dead (amongst the bigger publishers anyways). The second factor is that with self-publishing and so many small publishers around that there is a lot more "noise" to get through to get to the consumer.

    This has to led to the situation where it now appears that it is very important to break out quickly and have substantial success with your earlier books than ever before. Based on the current stats you need to become a lot of people's favourite or favoured author in a hurry if you want lasting commercial success.

    Thus the advice we (my wife and I) have received from a large number of industry people (including authors, agents and editors) is that a substantial investment in promoting your book out of the gate is important to your career because if you have two books (for instance) with mediocre sales you are likely not getting another contract. The amount of egg on an editor's face for championing the failed book might well vary because of the advance size, or you might have a slightly better chance to not get dropped because they can't be bothered to drop you but is that really how you want your career to go?

    For an author today something in the order of a quarter of your sales will come from author marketing. I don't think the new author can afford to ignore that.

    Or to put it more simply, using more funds for proper promotion increases your author brand equity which is critical to career success.
     
  13. MichaelSullivan

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    To be honest, I have no problem with option clauses. As long as it is properly written. Really all you are signing up to is showing a book to your partner first and I would do that anyway. The non-compete of course IS an issue.

    I think the following are important about the non-compete:
    • They should never extend across the "term of the contract" - as the contract tems are likely to be forever (life of copyright).
    • They should only be limited to times when the publisher's books are rolling out.
    • They should clearly state what type of a book is deemed as "competing"
    • They should only exist around very narrow windows of the publisher's release.
    • They should only be for full-length novels.

    So for me, a reasonable non-compete would be.

    This noncompete does several things.
    1. Doesn't restrict the author from releasing short stories
    2. Doesn't restrict the author from releasing non-fiction books
    3. Doesn't restrict the author from releasing non-fantasy books
    4. Doesn't restrict the author from releaing books under a pen name
    5. Doesn't allow the publisher to extend their "window of exclusivity" by staging the release of the books at a 2 month internal which, could lock an author out of releases for extended periods of time in a multiple book contract.

    As for option clauses. The important points are.
    • There is no "locking in" terms from a previous contract - for instance the option clause shouldn't say something like - if the option is exercised, it will be under the same terms of this contract. If an author is doing better - the should get better terms in the future.
    • It shouldn't allow the publisher to "rights grab" additional rights. If you fought to hold back audio - you shouldn't have to fight that battle again.
    • It should allow the author to submit either the work itself, or a detailed proposal.
    • The time periods have to be specific - no wording like "reasonable amount of time" - make it say xx days.
    • It has to be short-lived in other words the publisher has 4 - 6 weeks to read the book and another small amount of time for the two parties to negotiate exclusively.
    • It should be limited to just one book - and be specific to the genre the other books are - they shouldn't, for example, be able and not for all other books the writer creates.
    • It should not have a "grab back" clause - such that they can get the contract simply by matching the terms of another publisher -- after all if yo are moving because you aren't happy with your publisher, you don't want to be forced to stay.
    • Many option clauses will say something like, they don't have to consider the option until after publication of the last book - but this could lock out the author for a really long time - remember the author doesn't control publication dates. It's best to have no restriction of this type, or if one is insisted upon - then tie it to the Submission of the book which the author DOES have control over
    • The option should allow for both self-publishing or selling to a different publisher

    A reasonable option clause would look like this:

    Three months is what I've had in the past - but I think it's worth trying to push for two. Two months is (in general) the time period when they are pushing an author's book and so it should be only when they are actively marketing that the freeze out should occur. Limiting to a particular genre isn't a problem.

    The time periods I listed above are the same as I have in my contracts, and I think they are reasonable to both parties.

    Advances are important for a number of reasons. A book with a higher advance gets more marketing and sales support - period. A small advance may bet none. But, as I stated elsewhere - if you get a big advance and the book sales are bad, then it's looked upon as a failure, where a book with a modest or small advance that does earn out would be seen as a success.

    I think you may have misspoke. Advances ARE always paid out (unless the author doesn't deliver the book or the author and editor can't agree on edits). I think what you were meaning to say is that most authors don't earn out such that the advance is the only thing they receive and as such they don't get any "additional royalties." This is true - but money "sooner" is always better than "money later."


    Since you have to sign away the rights anyway - might as well do so and get paid for them up front, yes? A case could be made for, "Keep your advance in exchange for a larger royalty." I'd sure go for that - but to say "Keep your advance and pay me as the book earns" is a REALLY bad idea. What if the book doesn't earn? Then you've lost money that would otherwise be in your pocket.

    If only it were that easy. As I said, some things are easy to get adjusted...other things not so much.
     
  14. MichaelSullivan

    MichaelSullivan Maester

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    Which is exactly why a "modest advance" is better for an author who isn't going to have gangbuster sales. By definition if the advance is low the author book's is more likely to be profitable. It's when the advance is large and the sales are modest that the author is in the most jeopordy.

    You seem to be putting fourth that a book will be successful if only an author spends a lot on marketing. Having run an advertising firm for over a decade, I can tell you that throwing money at something isn't the answer. What makes a book successful is word-of-mouth. People loving the book so much that they tell their friends and family about it. Now, you do need to get the ball rolling by getting it in the hands of a few people to start off - but there are MUCH better ways of doing that then spending money on ads. Ads are for those with a lot of money, and if you have a limited budget, and can only advertise a little - you don't break through. Big campaigns can work - but small ones are more likely than not to have negative ROI's.

    There is no doubt that in traditional publishing you have to come "out of the gate" fast and furious -- your entire book's success is likely to be determined in the first few month's sales. That's one of the good things about self-publishing. You aren't on bookstore shelves, so you don't have to worry about having x sales or being pushed off them. The self-publishing model is much more conducive to modest sales over long period to times, whereas traditional publishing requires high sales on day one.

    I totally agree that an author has to be responsible for growing their audience - but totally disagree that you should take your big advance and spend it on promotion. That money is to compensate you for the work you've performed, and there are plenty of ways to promote that don't cost a dime. I'm not going to drop $5,000 on a goodreads ad for my book - that's part of my publisher's responsibility. The way I see it....

    The Author's responsibility it to: write, be interactive with readers, go to events that the publisher pays for, and meet their deadline requirements. The publisher's responsibility is to pay advances, make sure the book has wide distribution, utilize their sales force, use their contacts to get the book noticed, pay for any out of pocket expenses: cover design, editing, AND advertising that costs money.

    The author and publisher are dividing the profits of the books - and the publisher is getting that lion's share - so THEY need to pay for the things that cost money - if not...then you might as well self-publish and keep all the profit yourself. The author is already getting shafted by the system through a disproportionate share of the pie given the time and effort spent. To suggest that they dig them selves in even deeper by PAYING for promotion is not something I can get behind. Again, I'm not saying that an author shouldn't market themselves - but if you spend your advance to market your books - what are you going to live off of?
     
    Last edited: Mar 1, 2016
  15. psychotick

    psychotick Auror

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    Hi,

    Thanks guys.

    I still think advances are a way for publishers to leverage unfavourable contractual clauses on authors for little money. Consider the newbie getting his first contract for say five or ten k - seeing the zeroes and thinking - "This is it!". And then he reads the contract, thinks ok, they're going to prevent me writing another book for a year - but it's ten k. And he doesn't consider the fact that he was probably going to get that ten k further down the line anyway.

    And you guys are arguing about the size of the advances and what a bigger or smaller advance means to the publisher in terms of how hard they'll work for you. My thought is that it means little to them. They've done their sums, decided what they're going to do to sell your book, and made a decision based largely on how much money they think they'll make on their investment on your book. They were going to do the same thing anyway.

    Much as I hate to say it I think you guys are looking at this like naive women thinking - he brought me flowers and chocolates, he really must care for me. When really he did the sums, said flowers and chocolates equals sex and it's cheaper than a hooker - deal!

    Just my opinion of course. But when you look at power relationships you need to look at both sides of the relationship and consider not just what each side gives and takes, but what the cost to them for that giving and taking is. And for the publisher, paying upfront is probably a fairly low cost to them to give. For the publisher, even if an author doesn't earn out (yeah not pay out!) I suspect they still make money in most cases - so they haven't really lost anything by doing it (extra profits maybe) and they've gained control in the contract.

    As for the author in taking the advance, your friends sitting there thinking "Wow it's done, I don't have to worry about anything any more", has got probably the best motivation for taking the advance that there is. The others thinking I should take it because maybe it won't sell and that'll be all the money I get has the worst. You're supposed to have faith in your own work. And maybe that means simply sitting there and saying to yourself - It'll damned well sell - I don't need to prostitute myself to get the money in advance.

    I agree though that maybe not taking the advance isn't going to be a powerful weapon in your contract negotiation arsenal. It just blunts one of theirs. (Now where'd I put my damned tin foil hat!)

    Cheers, Greg.
     
  16. Russ

    Russ Istar

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    There are plenty of small presses out there willing to buy your book on a royalties only basis. Problem is, most of them can't get you into bookstores which limits your potential sales significantly. The question then becomes for you an economic one, do the better terms you can get out of a smaller press more valuable than the advantages of publishing with a larger publisher. I have friends with royalty only contracts, they all want or wanted advances but have not been able to get them.

    Many people think the first time author should be using most if not all of the advance to promote their book. No advance means the promotion you are going to do is now either going to have to be free, or come out of your own pocket.

    If you are working at a publisher and you have two books you think are similar in quality and a limited promotion budget, are you going to spend your promotion budget on the one you have virtually nothing invested in, or the more expensive asset. Basic economics tells you that you should spend more money on your more expensive asset than the cheaper one.

    Let's say you are the in house publicist and you get a chance to get one of your authors on say a radio show. Do you put on the one with a big advance or the one on a royalties only deal, all other things being equal?

    I don't even have to go at it theoretically, editors I know have told me that is how they operate(d). When my father worked for a major publisher, that is how they did business. I don't think that logic has changed.

    Some authors need the funds as soon as possible. If you need the money to meet your needs the equation changes.

    But the way to satisfy yourself on this issue is this; Get yourself some agent negotiated royalty only contracts, and get yourself some agent negotiated contracts with advances and compare the terms. Then decide which you think is better for you. Personally, I prefer an aggressively negotiated contract with a solid advance for almost any author. But I don't think for either MS's or my analysis on this that love has anything to do with it. :D
     
  17. MichaelSullivan

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    psychotick. I think what you have to keep in mind is that self-publishign isn't for everyone. Some people don't want to be both author and publisher, and they are more than willing to give up a big part of the sals to have the publisher take care of all the "publisher things."

    Also, there are a number of authors that really can't produce a high-quality book on their own. They may need substantial structural editing, and may have no clue (or desire to learn) how to find and hire qualified people for editing and cover design. Since they CAN'T put out a book on their own - traditional is really the only way for them to go. Will they have to pay a price? Sure. But not all lawyers open their own firms - some are quite happy working in other law offices. Same thing.
     
  18. MichaelSullivan

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    I'm really surprised to hear you say that - as none of the authors I know have ever mentioned anything like that. I'm not saying it's not so, just not something I've ever run across. And as I already said, I think it is a really bad idea. This is one of those things that' we'll just have to disagree about.
     
  19. psychotick

    psychotick Auror

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    Hi,

    MS, I know self pubbing isn't for everyone, hence the reason we're talking about trade deals. But this isn't about indie versus trade - it's about how big the barrel is that the trade publishers will put you over.

    Russ, no one who takes a trade deal should be paying a single red cent for advertising, promotion, editing, cover design or any of that other stuff. That's the stuff you're giving up your rights and a chunk of your royalties to have someone else do. What you're suggesting is getting a dog and then barking yourself as they say.

    Cheers, Greg.
     
  20. Russ

    Russ Istar

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    The way publishing works is changing. There are two ways of looking at being an author these days, you can think like an employee, or you can think about it like being your own business. The current environment, with publishers being shall we say inconsistent on how they promote books and less positive in developing young authors means more of it falls back into your hands.

    Once again, if you need the money to eat you don't have the choice.

    But if you do there are reasons to spending your own money on advertising and promotion.

    You don't get a second chance to make a first impression. Today more than ever breaking through the noise is harder and you need to do it. Your publisher may simply not be willing to do it for you.

    It also gives you much more control over your own career and success. If you don't take a strong hand in your own marketing you are giving over almost all of the control of your career success to other people and that might not be the best strategy.

    Also outside PR people and marketers don't have access to many of the resources outside people do, or may not allocate them to newer authors. If they get a slot on NYC radio is it going to a new author or someone else? Can they even get you a slot on top radio and TV shows, and if they get those slots they are not likely going to the new guy in the house.

    Sometimes publishers will pay for a part of your outside marketer or PR person, but they are less likely to do so for the new author. After the plan works they will often pay for half and eventually all of the outside firm's work.

    MJRose, a successful author and who runs Authorbuzz put it this way:

    If I buy a guard dog for home defense that is great, but it doesn't mean an investment in an alarm system and a shotgun are a bad idea.

    Many of the people you see talking about their books on TV or on radio got there through their own PR people. Many of the people you see currently dominating the bestseller lists in both NA and the UK got there by using independent PR people.

    You may think they are unwise, but many of the world's most successful authors have done it and are doing it.
     
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