Friday, May 18, 2007

Victoria Strauss -- Contract Alert: Simon & Schuster

Just posted on the Writer's Alerts page of Writer Beware:

The Authors Guild has posted an alert about a troubling change at Simon & Schuster. Apparently the publisher has altered its standard contract to allow it to consider a book in print for as long as the book is available in any form, including the publisher's own electronic database--even if there are no sales.

Traditionally, the AG says, "All major trade publishers have been willing to acknowledge the requirement of some minimum level of economic activity in order for them to retain exclusive rights to a manuscript. Typically, such clauses obligate a publisher to sell a few hundred books a year. Simon & Schuster has been signaling, however, that it will no longer accept a minimum sales threshold." This would potentially allow Simon & Schuster to retain control of the author's rights indefinitely.


For reference, here's the clause acknowledging a "minimum level of economic activity" in my contract with HarperCollins:

If for two consecutive accounting periods neither the Publisher nor a licensee of the Publisher has printed copies of the Work available for sale in the United States, but the Work is available for sale from the Publisher or a licensee of the Publisher by some means of on-demand printing, or electronic transmission or reproduction and within those two accounting periods, the Publisher and its licensees, collectively, have sold less than 250 copies of the Work, the Work shall be deemed out of print.

So why is it important for works to go out of print?

One of the more persistent writers' myths is that Going Out Of Print Is Always Bad. Books have the shelf life of sliced bread, this bit of received non-wisdom goes; you get four or five months in the stores, and unless you sell in large numbers, you're outta there. A few months later, disgusted by your failure, your publisher will declare your book out of print, after which no one will be able to get hold of it except as a used copy. (This scenario really is a myth; even non-performing books don't go out of print as fast as that--my books sell modestly, and their average in-print life is around four years--and steady sellers can stay in print for years, even decades.) One of the supposed advantages of digital and electronic publishing is that, because there's no inventory, publishers can afford to keep books in print and available "forever."

But forever isn't good if the publisher isn't promoting the book. Why should publishers have control over books they aren't marketing and selling? If your book is no longer available for order or download, or if its availability is limited (for instance, if there are no print copies that can be ordered by stores and the book exists only in an electronic edition), or if it's still available but few or no copies are selling, you're better off if the publisher takes it out of print, allowing you to revert the rights and regain control of them. Perhaps you can do something else with them--re-sell them, for instance (this is difficult, but not impossible), or publish through a service like the Authors Guild's Back in Print program, which allows authors to bring out-of-print books back into circulation. Even if you wind up simply holding on to the rights, it's better than letting your book languish in the publisher's vault.

(This is why it's important, if you're thinking of going with a digital or electronic publisher, to look for time-limited contracts, or, if the publisher uses life-of-copyright language, to make sure that it's balanced by a detailed and specific out of print/rights reversion clause that includes provisions like the example I gave above.)

What's the purpose behind S&S's new policy? I'm guessing that S&S is gambling that electronic rights will become hugely valuable at some point in the future. Right now they aren't, and I don't believe that anyone, even the most vigorous prognosticators, knows how or in what ways they may become so. But with its rights grab, S&S is hedging its bets, retaining control of books it may be able to exploit in new ways as times change and new technology becomes available. In this situation, authors are double losers--first, because they lose control of their rights forever, and second, because if S&S does exploit the rights at some future point, it will be doing so under old contracts. As the development of the ebook market has made clear, new technologies demand new terms and new negotiations.

S&S is certainly not alone in its hopes for the future. Unless outcry by authors and agents forces a change--and there is plenty of uproar right now--look for similar policies from other publishers not too long from now.

The Authors Guild cautions authors to carefully consider their options in regard to S&S:

1. Remember that if you sign a contract with Simon & Schuster that includes this clause, they’ll say you’re wed to them. Your book will live and die with this particular conglomerate.

2. Ask your agent to explore other options. Other publishers are not seeking an irrevocable grant of rights. [Though some authors are saying that Bertlesmann recently implemented a similar policy.]

3. If you have a manuscript that may be auctioned, consider asking your agent to exclude Simon & Schuster imprints unless they agree before the auction to use industry standard terms.

13 comments:

Mad Scientist Matt said...

It's sad to see one of the big names do something this author unfriendly. Guess it goes to show that just because you've seen their work in a bookstore doesn't mean you can let your guard down. I'm starting my first book querries this week and will definitely keep that in mind!

Anonymous said...

For some reason this immediately brought Dan Brown and his Angels and Demons book to mind. I read somewhere that Angels and Demons was languishing, ( or was it out of print already?) when the Da Vinci Code hit it big, and then another publisher picked up Angels and Demons because the other publisher had declined renewing the contract. At least I think that is what I remember reading. In any case had the original publisher had that clause in there contract, it's quite possible it could have just withered away, seeing that the original publisher had lost interest.
I guess my point is that even if your first book isn't a blockbuster, but your second could be, and that in turn would renew interest in the first book. S&S's clause could seriously throw a wrench into that machine.

Diana Castilleja said...

I'm still trying to understand the ramifications of the whole deal. I'm not print contracted or even talking to an agent, but this really is a scary idea.

The Dan Brown scenario basically said it to the point.

I fear that more and more will go along with it, and then forget why they joined the bandwagon and have no excuses in the future when things could fall apart.

This is making a huge assumption on the future of printing on a whole. And it's not a fair balance in the least. It removes 100% of the rights from the author for that work if it should be signed.

Samuel Tinianow said...

They're doing this because they think that eBooks are somehow going to start making bundles? Talk about hare-brained.

It boggles the mind how everyone seems to be following the music industry's example in regards to electronic media (i.e. rights grabs, DRM, etc.) even though the music industry has arguably done the worst job of adapting itself to the digital age of anyone. What is it that they say about insanity, again?

--E said...

Samuel, they're not doing this because they think ebooks are going to make bundles. They're doing this (if it is malicious and not just idiocy) because no one knows what is going to make bundles in fifty years. Or ten years. Or five.

Phones and PDAs have merged. How much longer before they merge with ebooks and that electronic paper of the Sony Reader? At that moment, ebooks do become viable revenue streams.

Also, many publishers (presumably S&S) have a huge rights-grab in their contracts to begin with: they try to get rights to every form of transmission, known or currently unknown. It's only ebooks today, but who knows but that uploads to one's cybernetic implants might be the hot thing in 100 years? Imagine that for, say, textbooks.

100 years is still well within the copyright range of most books being published this year, and if the Mouse Corporation can leverage a few more congressmen, copyright may get even longer, at least in the USA.

Gregory Ludwig said...

Another thing I thought about regarding the electronic rights/POD clause is this: Along with keeping its options open for a possible revenue stream (even if small), S&S's attorneys/administration may have realized that liabilities with books they have already published in print form, if they have not attracted lawsuits, are small. For the logic behind this, consider the Frey "Million Little Pieces" situation. Here was a book that initially was a publisher's dream: big sales earning back the advance and then some. But suppose a book turns out fraudulent, as the case with this one. Then: $2 million plus in liabilities--payments to consumers claiming fraud along w/ attorney fees. But if a book has sold, but not enough to recoup the advance, S&S (or any other big publisher) could keep it "in stock" in electronic/POD form forever, and if it has proven not to attract lawsuits, so much the better. That is, during its "run" with small sales via electronic form, there would be too little revenue attributable to the book to make it worthwhile to sue over; the security is heightened by the book not having attracted suits when in print form. Meanwhile, the publisher takes in a little money with it. Aggregate a ton of other such books with this, with the electronic rights perpetually owned by S&S, and you have a larger total revenue stream), which is certainly not nothing. And storage of books electronically involves no big warehouse, associated shipping costs, etc. You can see how certain high-level managers would think this was a good model: like safe, low-return investing. And writers' rights? Pish-tosh, the managers would say; it's a tough publishing world, and new business models are needed. This just conforms with the fact that media lately are showing other sorts of administration-prerogative tendencies, viewable in the press or not. And, S&S has said (in a recent Times article) that any author could opt out of this through negotiation. Reasonable plan: start with requiring perpetual electronic rights from everyone, and let the burden of not being subjected to these fall on the writers with the nerve and savvy to arrange it.

H said...

Thanks for your comprehensive post on this issue. It's so easy to get bogged down in contractual language, and writers are often just so grateful to be published that they don't challenge the publisher on anything or fully understand what they might be getting into.

Anonymous said...

Quote:One of the more persistent writers' myths is that Going Out Of Print Is Always Bad. Books have the shelf life of sliced bread, this bit of received non-wisdom goes; you get four or five months in the stores, and unless you sell in large numbers, you're outta there. A few months later, disgusted by your failure, your publisher will declare your book out of print, after which no one will be able to get hold of it except as a used copy. (This scenario really is a myth; even non-performing books don't go out of print as fast as that--my books sell modestly, and their average in-print life is around four years--and steady sellers can stay in print for years, even decades.)

Hate to enlighten you against this quote, but 'Picturebooks' can indeed get to go out of print within as little as 3 months of shelf life... I have had this happen to me and known it to happen to others.(UK and USA publishers) The warehousing isn't worth the expense against predicted sales.
Then the publisher 'remainders' a percentage, and often shreds the rest. Once the reduced price copies are all sold, the book is Out Of Print, and there is little hope for the author/illustrator ever earning enough to clear the advance.

Anonymous said...

Buy it and bury it?
I’m wondering whether there is already any clause in most publishing contracts that prevents a publishing house from buying rights and then not exercising them? Of course, it would be a wild, paranoid fear that any corporate entity might pay good money to prevent people from reading a book. After all, the automobile industry always used the most fuel efficient versions of engines they own right to, too.

- Pondering

Victoria Strauss said...

I’m wondering whether there is already any clause in most publishing contracts that prevents a publishing house from buying rights and then not exercising them?

A good publishing contract will give the publisher a set amount of time in which to publish (say, 18 months) after delivery of a completed manuscript. If the publisher doesn't publish in that time (unless there've been author delays or things beyond the publisher's control have happened), the author can demand publication and the publisher has 90 days or something like that either to publish or revert the rights.

A time-limited contract may not contain a clause like this, because the publisher's rights to the book expire along with the contract. But if you're offered a life-of-copyright contract, and don't see something like the above, be very wary.

One of the publishers on Writer Beware's Thumbs Down list has a life-of-copyright contract that not only doesn't bind the publisher to publish within a specific timeframe, but states that the publisher has no obligation to publish the book at all.

Mark said...

Victoria,

I can't confirm it, but I bet they used the the two winners of the gather.com contest as test cases.

Victoria Strauss said...

If you've come here from AEG Publishing Group's press release, see this alert at the Writer Beware website.

Victoria Mixon said...

Victoria, thank you for posting this. It was forwarded to me by an editing client who is currently negotiating with her publisher over very similar issues, under the eagle eye of her lawyer husband.

In this era of shifting and morphing standards in the publishing industry, it is incredibly important that writers know what's going on in contracts.

This is great information.