Publishing Contracts and Publishing Rights – Introduction
In Part 1 of this blog series we discussed how book publishing contracts vary in quality and fairness. We also addressed what you, as a writer, should watch out for when a publishing contract lands in your inbox. Specifically, we discussed the publishing rights granted, scope of licence, copyright owners, publisher’s obligations, and monetary advances.
In Part 2 we continue our examination of publishing contracts, identifying further key sections such as publishing rights, royalties, termination, and potential red flags in the publishing industry.
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(Note: the degree of risk posed by any red flags in a particular agreement must be determined on a case-by-case basis. If you have questions or concerns about a publishing contract, we recommend you speak to an entertainment lawyer.)
What are Publishing Royalties?
Publishing Royalties are a large part, if not all, of a writer’s prospective earnings. The royalties clause provides what percentage of revenue a writer is entitled to receive (ie: the writer’s share).
Publishing Royalties are typically based on sales and paid as a percentage of the retail or list price, less deductions for returns. However, some agreements allow the publisher’s share to be greater if they make deductions for things such as taxes, import duties, marketing, agency fees and distribution costs.
A writer typically accepts a relatively low percentage of the retail price (5%-15% for print copies) on the basis that the publisher or publishing company will bear the costs of marketing and distributing the book. If your publishing contract allows the publisher to make substantial deductions from revenues, low royalty payment rates don’t make sense.
What does “Reversion of Rights” mean?
Typically, a publishing contract will provide that publishing rights will revert to the author if the publisher fails to meet certain thresholds in the agreement – usually with respect to publishing timelines or keeping the work in print.
However, some publishing contracts do not have a reversion rights clause. Therefore, before you sign a publishing deal, make sure you know what events will get you your right to publish back.
Can a Writer Terminate a Publishing Agreement?
While a writer’s ability to outright terminate a publishing agreement is rare, there should be certain instances where a writer is entitled to terminate (and consequently have their publishing rights revert to them).
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Often, publishers have more extensive termination rights, such as if the writer fails to adhere to a delivery schedule. On the other hand, a writer may be able to terminate the publishing contract if the publisher does not publish the work for a minimum amount of time or if it decides to stop publishing the work. Knowing your termination rights is vital.
What does “Monies Held in Reserve” mean?
“Monies held in reserve” refers to a portion of royalties the publisher withholds from the writer. Th
ese royalties are withheld to protect the publisher in the event they are required to pay refunds on returns.
These “monies held in reserve” should be a set percentage and not vaguely defined as a “reasonable” amount. Additionally, the agreement should provide details about when the royalties will eventually be paid to the writer. The publisher should not have the ability to withhold said royalties in perpetuity.
What are Vanity Publishers and Predatory Publishers?
This item doesn’t relate to the clauses of a publishing contract, but to types of publishers to be wary of.
Well established publishers tend to be picky and reject most original work submitted to them. Vanity publishers, on the other hand,
tend to accept the majority of works they are offered. This is because writers pay vanity publishers to have their books published. One of the key considerations when dealing with vanity publishers is the extent of the publisher’s obligations to publish the work. If a writer agrees to pay a publisher, they should be confident there is substantial value in the publishing service.
Predatory publishers are on the rise, particularly in the world of academic publishing. These publishers tend to market themselves to academic writers. However, the peer review elements these publishers tout are sometimes illegitimate or misleading. Predatory publishers often require extremely restrictive terms, many of which are identified as red flags in this publishing blog series.
Publishing Contracts and Publishing Rights – Conclusion
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It may be tempting to sign a book publishing contract before properly reviewing it. However, you should read the contract carefully, understand its terms, and be confident that it is a deal worth entering. The last thing you want is to have your work tied up in an unreasonable and onerous agreement that you can’t get out of.
For more information, we recommend you take a look at another Edwards Creative Law blog on co-publishing: Collaborating with Artists and Other Writers.
© 2023 Edwards Creative Law, LLP -Updated to April 20, 2023
Edwards Creative Law is Canada’s Entertainment Law Boutique™, providing legal services to Canadians, and international clients who partner with Canadians, in the Film & Television, Music, Video Games and Apps, Publishing and Literary industries.
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* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.
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