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A Publishing Contract Should Not Be Forever

Diamonds may be forever, but book contracts should not be. There’s no good reason why a book should be held hostage by a publisher for the lifetime of the copyright, the life of the author plus seventy years—essentially forever. Yet that’s precisely what happens today. A publisher may go bankrupt or be bought by a conglomerate, the editors who championed the author may go on to other companies, the sales force may fail to establish the title in the marketplace and ignore it thereafter, but no matter how badly the publisher mishandles the book, the author’s agreement with the original publisher is likely to remain in effect for many decades.

That’s the way most book contracts have been drafted for more than a century, and publishers take it for granted; only a few brave souls have asked why or argued with it because that’s the way it has always been. In the ideal traditional publishing partnership—where the publisher nourished the author’s career; where the same editor worked closely with the author over decades, editing and reworking books and new book ideas; where the publisher actively marketed and promoted the author and gave the author a sufficient advance to live on between books—then it might have made sense for the publisher to own the rights for the entire copyright term. But that is the rare author-publisher relationship today.

Recognizing how unfair a lifetime-plus grant can be, the copyright law allows authors to get their rights back after 35 years, but that is a really long time, especially when a publisher has long ago stowed your book away in a dark attic. And for the author’s termination to be effective, the author needs to comply with complicated legal notice procedures that are difficult to understand and execute without a copyright lawyer’s help.

Authors victimized by this status quo know that it’s long past time for publishers to offer a fair deal. We believe three basic changes are urgently needed: (1) time-limited contracts, (2) a clause that provides for reversion of unexploited rights, and (3) a specific new unchallengeable definition to replace historic “out of print” clauses that are not remotely relevant in the electronic age.

When it comes to time limits in agreements, publishers historically have positioned themselves on the lucrative side of the line. With authors, the deal they offer basically lasts forever. But when they’re on the other side of the deal, licensing things like paperback reprints or foreign rights to other companies, publishers typically don’t make agreements that continue for the life of a book’s copyright. Instead, the contracts are good only for fixed periods—seven years, for example. If publishers can routinely demand licenses that expire, why shouldn’t authors?

We think the “standard” contract should last for a limited period of time from the date of publication; it should end well before the 35-year termination window opens. When the contract expires, if a book is still doing well, the author and publisher might negotiate another time-limited deal—or the author might choose to move the book to a house that has put more effort into marketing the author’s later works. If the book is no longer gaining support from the original publisher, the author might choose to self-publish it or take it to another publisher. In any case, a time-limited contract gives authors the leverage and flexibility that they need in today’s publishing environment.

Publishers will no doubt push back and call us naive. They need to make their money back over time, we get that; publishers need to be able to meet the bottom line. But so do authors. And if a publisher is unwilling to invest in a book anymore, it doesn’t deserve to own the rights anymore. It’s clear that when publishers are the ones offering to license material they control, they typically agree to time-limited deals. Authors deserve no less.

Time-limited licenses are just the first step in making sure that publishing contracts aren’t forever. The second step–ensuring that publishers can’t sit on subsidiary rights that they’ve licensed but fail to exploit–is at least as important. After all, publishers have a strong incentive to make those deals: they typically retain fifty percent of the proceeds. But the way most current contracts work, publishers who fail to do anything with rights such as paperback, audiobook, and foreign edition rights don’t have to give those rights back to the author until the agreement ends—another “forever” deal. That’s ridiculous. If the publisher has stopped doing its sales job—or even if the publisher believes that there’s simply no market for these rights after all—the author should be able to claw back the right to exploit them or find somebody better.

The solution is simple: All subsidiary rights an author grants to a publisher should be subject to reversion after the author’s demand if they are not exercised or exploited within eighteen to twenty-four months of publication. There’s no reason why a publisher’s ineffectiveness at selling subsidiary rights should reduce the author’s income forever.

(In a later installment, we’ll have more to say about which rights authors should license in the first place, for how much, and with how much oversight. For now, suffice it to say that authors should almost always retain film and dramatic rights, and in many cases foreign publication rights as well—and should always have the right to refuse bad deals.)

That brings us to the third step: the “out of print” clause, which has failed woefully to keep up with modern publishing practices and must be replaced. The original concept was straightforward: When a publisher fails to keep a book on the market in a profitable way, the author should get all the rights back. This is more important today than ever, since e-books and print-on-demand make it easy for authors to republish their backlists: a recent study conducted by the British Authors’ Licensing and Collecting Society (ALCS) showed that 70% of authors who were able to reclaim their rights were able to earn more money from the work in question.

But publishers have cleverly managed to craft “out of print” clauses that make it almost impossible for authors to recapture their rights. Classic contract language states that a book is not out of print as long as it is “available for sale in any edition.” So publishers “release” the book in a print-on-demand or electronic edition that’s always available, even if few copies are actually sold. By relying on language originally intended to provide a real reversionary right, a publisher can now hold onto a book forever even if it’s not actually doing anything with it. That is not how “out of print” was supposed to work.

The remedy is simple: Kill the entire outmoded concept of “out of print.” Instead, the contract should define when book rights are being “inadequately exploited” and therefore available for reversion to the author when the book fails to generate a certain amount of income—say, $250–$500—in a one-year period. Using income as the yardstick, not a specific number of sales, is essential: Publishers might otherwise be able to game the clause by offering one-cent e-books the way they’ve gamed existing clauses by using e-books and print-on-demand.

This change would completely eliminate the contentious and increasingly irrelevant issue of what constitutes “in print,” as well as publishers’ clever delaying tactics. As things stand now, if a book actually happens to go out of print, authors must typically figure that out on their own, notify the publisher, wait many months to see whether the publisher is willing to bring the book back onto the market, and, if not, try to get the publisher to relinquish the rights. Our simple solution, allowing an author to get the rights back when a book is “inadequately exploited” as proven by an unreached income floor, would put an end to this ludicrous time-killing dance. If the minimum income failed to arrive, the author could reclaim the rights.

It’s worth noting here that no single solution will work equally well for all author-publisher relationships. Not all publishing contracts, in other words, need to look the same. A major impetus of the Fair Contract Initiative, as we’ve mentioned before, is to challenge publishers and authors alike to be more creative in solving the challenges of the twenty-first century publishing industry.

That being said, it’s just common sense that a publisher should retain rights to a work only for a reasonable amount of time, and then only if it’s generating income for both parties. But current contracts are designed (as they have been for years) to keep publishers in perpetual control over works that authors created and copyrighted. That’s one more publishing-contract tradition that needs to change to keep pace with the times.

Read more about our Fair Contract Initiative.