I recently received this very challenging question and scenario from traditionally published author Dr. Liz Alexander.
I have an issue with one of my publishers and don’t really understand where I stand.
Last year Octopus Publishing (who took over Gaia, publisher of four of my highly illustrated best sellers, including The Book of Chakra Healing and The Book of Crystal Healing—approx. 250,000 and 200,000 sales each—contacted me to say they wanted to reissue Chakras with new illustrations (it was originally pubbed in 1999) and to offer an e-edition as well as POD. It would then become a Gaia Classic!
This was one of my earliest books, I didn’t have an agent at the time and because of the highly illustrated nature of the book, I ended up with 5% of net receipts in royalties. I easily earned back my advance and have been making several hundred dollars consistently on this book since publication … As with most publishers they’ve done nothing to publicize it, but the book is on a universal topic, has great reviews (it was very good, even if I say so myself, lol!) and could go on selling forever, I guess.
The original contract didn’t cover e-versions (obviously) so they sent me an addition to sign—in which they are offering 15% of net receipts for the electronic version of the book. I said it wasn’t enough and that given the amount of money they’ve made from my books over the years (for which I wish now I’d negotiated an escalating royalty rate —but naive at the time) that 25% was nearer the mark. They keep coming back saying that Hachette (the big owner) has a policy of X and this ties their hands. It’s the kind of dinosaur belligerence that causes authors to leave publishers in droves … we’re not treated like individuals, just another author—sigh!!
Anyway, I wrote back and said I wasn’t going to sign my rights for 15% and was investigating publishing my own ebook version.
The Octopus editor wrote back to say that I’d have no right to publish an ebook of my own because they owned the text rights as per our original contract (and I need to go back to the wording to check this is accurate).
It was her last sentence that bothered me the most—other than the fact that they weren’t prepared to budge on the 15%—something to the effect that they’d prefer to move ahead with my “blessing/involvement,” which led me to believe that they were prepared to publish an ebook without it!
Surely they can’t go ahead with an ebook version if I refuse to sign the addendum to the contract? Would be grateful for your thoughts as to how best to proceed. My mother used to tell me that I had a tendency to “cut off my nose to spite my face” but I’m a very principled person and don’t like being treated this way.
Frankly, I don’t make enough money on this book that if I told them to stuff it (just for ebook—they’d have to continue paying me my other royalties), I wouldn’t be losing that much … what do you think?
This is a very slippery issue, for a number of reasons:
- Contract language may be ambiguous as to who holds rights, and the language may be interpreted differently (there is little legal precedent to refer to in these situations)
- Who retains e-book rights—author or publisher—is a controversial issue
- Who holds rights to the text versus images may be different
- Who holds e-book rights based on territory can be even more confusing
It’s also a little tricky for me personally because I’m familiar with conventional language in most U.S. publishing contracts, and I don’t know what differences there may be in the UK market. However, I believe there are still fundamental questions that apply regardless. (Disclaimer: I am not a lawyer and this is not professional legal advice.)
- What, if anything, does your contract say about e-rights? If e-rights are not mentioned at all, it is difficult to see how your publisher could exploit them without your permission. How could they even set an e-book royalty percentage without a contract addendum? Find the contract and look for the language “rights to the text”—does this extend to all mediums and formats, or all means of delivery, storage, and reproduction? If not, you likely retain these rights if we’re talking about a typical royalty contract (e.g., you did not agree to a work-for-hire arrangement).
- Who owns rights to the images? This is a bind for many publishers who don’t have the time and resources to go back and secure electronic rights to images used in print books. This issue is explored further by Emily Williams at Digital Book World, in Image Rights Slow Transition From Print to Ebook. A must-read for any author of illustrated books!
- What territorial rights do they have? The answer to this question may be different for the text versus the images (creating another bind!). Do they have world rights to all of it, for all versions/editions?
My questions help structure an approach to determining an answer, yet that answer will probably not be 100% tight. Even if the contract seems to favor you—e.g., if it doesn’t mention e-rights—a publisher might still claim they hold those rights, even if they can’t exploit them (if you fail to agree to a contract addendum). The publisher may also feel emboldened because you don’t have an agent.
Here’s a quick summary of what’s been argued and said up until now (mostly from the U.S.).
Controversy Surrounding This Issue
- The latest controversy involves Open Road Media, an independent e-book publisher, which primarily publishes e-editions of traditionally published books where the author/agent has kept the e-rights. Publishing analyst Mike Shatzkin once said of Open Road, “[it's] exploiting the combination of old contracts that are ambiguous about ebook rights and the big trade houses’ reluctance to go beyond a 25% of net receipts royalty on ebook sales to make high-profile ebook captures.” HarperCollins is now suing Open Road because of its publication of a children’s book that was originally signed in 1971. (See Publishers Weekly article here, plus illuminating comments by agent Robert Gottlieb.) Apparently, the contract in question gives Harper the right to be the exclusive publisher of the work, “in book form,” including via “computer, computer-stored, mechanical or other electronic means now known or hereafter invented.”
- Random House also tried suing an independent e-book publisher, for very similar reasons to HarperCollins, in the Rosetta Stone case. Agent Robert Gottlieb references this case and comments (in the same PW article mentioned above): “The claim H/C is making that ‘book form’ covers electronic books does not hold water in my view. As an example if a publisher bought book rights and did not specifically have mass market or trade books listed in the agreement, could a publisher then say they still had the rights because they are covered by ‘book form’? Normally publishing agreements are specific as to what a publisher has and doesn’t have. If it is not stated in the agreement normally it is then a reserved right to the author.” He then adds, “If such language truly covered ebooks there would be no reason today for publisher to specifically state that ebooks are covered in the agreements they are making with authors.” Here’s a viewpoint from agent Richard Curtis, who notes that publishers like Random and Harper typically view e-book rights as theirs to exploit if that language I cited in the first bullet point above is in the contract.
- In 2010, agent Andrew Wylie (based in the UK) threatened to make an exclusive deal with Amazon for e-book rights on behalf of some very notable authors. He eventually backed away from this, but his position was clear (at least based on the contract language he negotiated): “Backlist digital rights were not conveyed to publishers, and so there’s an opportunity to do something with those rights.” Here’s yet another thoughtful analysis of the situation by agent Richard Curtis.
- For an in-depth legal perspective on the issue, I point you to CopyLaw’s fine post (not that they offer any clearer answers!): Who Controls eBook Rights? from December 2011.
Most agents would say: If the rights are not clear in the contract, then the publisher is obligated to draw up a new and fair deal to cover those rights. It appears that’s what your publisher is doing now, although the terms aren’t very favorable for you.
I did find a 2010 article in the Guardian that indicates UK authors are being offered less favorable royalty rates than their U.S. counterparts. While 25% is a typical royalty rate for traditionally published e-books in the U.S., UK authors are struggling to get there—and sometimes this prevents any e-book editions from being released (due to lack of agreement between author and publisher).
Quick side note for all readers: If rights have reverted to you (if your book has gone out of print, which typically triggers a reversion of rights), then you have no need to worry. Rights should be yours to exploit!
I’d like to open up this issue to my readers—especially any agents who are reading this and have insight or experience—although I know it’s difficult or impossible to say anything without seeing the contract.