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October 16, 2020

Bad Contract Alert: EMP Entertainment and A&D Entertainment


Posted by Victoria Strauss for Writer Beware®

Lately I've been hearing from writers who've been solicited by one or another of two companies offering to distribute their books to Webnovel, a Wattpad-like platform based in Asia: EMP Entertainment and A&D Entertainment. (Note: there are a number of companies with similar names focused on concert invites, event scheduling, and DJ services.)

EMP and A&D are both based in Singapore, and both are just 11 months old (which raises interesting questions about whether they're really different companies, though their contracts differ enough to suggest that they are). They present themselves as Webnovel partners, authorized to offer non-exclusive contracts that allow authors to continue to publish on other platforms (such as Wattpad, where both companies are actively approaching writers) if they choose.

However, I've seen numerous examples of each contract...and they are not author-friendly, to put it mildly. Nor are they truly non-exclusive.

EMP ENTERTAINMENT

Here's an example of an EMP solicitation. In addition to Webnovel, EMP promises to distribute writers' work to several other platforms.


Here's the contract. Substantial problems include:

- The grant of rights is "irrevocable" (Clause 4.1). EMP can terminate it at will or for breach (Clauses 9.1-9.5), but there's no option for the author to do so. 

- Also in Clause 4.1, the grant of rights is said to be "non-exclusive". However, this is severely limited by Clauses 4.2 and 10.1, which make any additional licenses subject to EMP's written consent, and directly contradicted by Clause 4.7, which prohibits authors from selling the work to third parties during the term of the agreement.


- Clause 4.7 includes what amounts to a perpetual claim on the work by EMP, since, even after the contract has been terminated, authors must allow EMP to match any offer for a subsequent sale, and can't complete a subsequent sale unless EMP signs off on it. (My highlighting.)


- There's what amounts to an ethics clause (Clause 4.3), which requires authors to "uphold the reputation of EMP Entertainment" and decrees that they "shall not engage in any activities which in the opinion of EMP Entertainment, reasonably held, may be harmful to the reputation of EMP Entertainment or its interests." Companies can and do abuse such clauses--something that's made even easier when the terms are as vague as they are here. 

- Authors receive 50% of "net revenue", which sounds good until you realize that it's actually net profit


These "total expenses" are not detailed anywhere in the contract, so authors have no idea of what they are, or how much they may reduce the amount on which royalties are calculated. (Payment is monthly, with a US$200 threshold.)

A&D ENTERTAINMENT

Here's part of A&D's solicitation. Unlike EMP, A&D promises distribution on Webnovel only, with various conditions attached.


Here's A&D's contract. In my opinion, it's even worse than EMP's.

- The grant of rights (Clause 3) is, basically, all rights forever. Writers must grant "any and all intellectual property rights in and to the Work" via "a worldwide, nonexclusive, perpetual, irrevocable, freely transferable and sublicensable license of the entire copyright subsisting in the Work." Whether A&D actually intends to take possession of copyright is not clear (despite the wording I've quoted, other language in the contract is ambiguous), but the duration of the grant is clear: life of copyright. 


- Like EMP, A&D seriously qualifies the supposed non-exclusivity of their license. A&D's Power of Attorney authorization forbids authors to exercise the granted rights without written permission:


Also, writers who want to maintain existing work on other platforms, such as Wattpad, must give Webnovel most favored nation status by publishing to Webnovel first, and by pausing or unpublishing previously published content to make sure that Webnovel is always several chapters ahead. 

- Did I mention that A&D requires authors to grant power of attorney? (See the last pages of the contract). There is absolutely zero reason for any publisher or platform to require this.

- Per Clause 9, which covers termination, the author has the right to terminate the contract only in the event of breach by A&D (including failure to pay royalties). A&D, by contrast, can terminate at will--and, if it deems various kinds of breach by the author, can impose onerous provisions. 

In Clause 9.1, for example, "breach" includes failing to deliver work on time or to A&D's satisfaction. If after "three reminders" the writer still can't satisfy, A&D can terminate the contract and bill the author for "all losses suffered in that connection, including but not limited to additional expenses incurred by Party A such as notary fees, attorney fees, accreditation fees, litigation fees, and travel fees."

Here's another example. Not only must the writer compensate A&D for "losses", they must return 50% of earned income.

- As with EMP, author royalties are paid on net profit. 

It's not stated anywhere in the contract what those "other costs" might be.

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A lot of companies are jumping on the reading/writing app bandwagon. Several other "monetize your writing" chapter-by-chapter publishing platforms are actively soliciting authors on Wattpad and elsewhere. Unlike EMP and A&D, these companies aren't distributors; participating authors publish direct to the companies' platforms and reading apps. However, concerns about terms and contract language seem to be similar.

- Webnovel (sometimes dubbed "the Wattpad of Asia"). I've seen a number of its solicitations, and though I haven't yet seen a contract (Webnovel offers both exclusive and non-exclusive contracts), online discussions by authors who publish on the platform suggest that it has problems along the lines of those discussed above.

- Readict/VitalTek. This company asks writers to provide a sample of their work, which they'll display for a couple of weeks to gauge reader feedback and gather "data", whatever that means (here are the Terms and Conditions of submission). At the end of that period, they'll decide whether they want to offer a contract, which can be exclusive or non-exclusive. Writers may receive a flat licensing fee (supposedly as much as US$10,000, although in correspondence, a company representative acknowledged that there is a "range" starting at US$300), a signing bonus of $100, and "massive exposure". They refused to provide me with a contract sample. 

- Anystories/Read ASAP Ltd. invites writers who've uploaded least 30,000 words to apply to be a "signed writer". If accepted, they may receive an exclusive or non-exclusive contract, and will earn monetary "rewards" based on how many words they upload per day (at least 1,500) and how many words their story contains (at least 80,000). The schedule is pretty grueling: writers must "update daily with a maximum of 3 days absent allowed per calendar month". Writers with exclusive contracts are eligible for an additional "cash prize."

- SofaNovel/Vlight I haven't seen a contract, but otherwise this one is very similar to the rest: exclusive or non-exclusive contract, signing bonus, income from "rewards". Based in Singapore, SofaNovel was launched--like EMP and A&D--in November 2019. Reviews of the app are mixed.

- Dreame/STARY Pte. Ltd. also also does business as FicFun and Ringdom. These sites' setup is  similar to Anystories: writers submit at least 30,000 words, after which they can apply for an exclusive contract and "rewards" depending on word counts and updates. To claim the rewards, they must update daily, with only two absences allowed per month. The STARY platforms allow fanfic but say they don't sign it. 

Other than Webnovel, the STARY ventures have been around the longest of these companies, and there's a fair bit of discussion about them, some of it not very favorable (among cited issues are poor quality/poorly edited stories and aggressive solicitation). Although the grant term is limited (5 years), snippets of the Dreame contract that have been posted online (see, for instance, this 2018 blog post and this Reddit thread) include problematic provisions, including net profit payment, no option for author termination, onerous penalties for author breach (return of all earned income, remuneration of company "losses"), and the use of the term "Digital Copyright" to describe what otherwise reads like a conventional (if sweeping) rights license. 

1 comment :

Anonymous said...

Thank you, Victoria for this article. I have been approached a couple of times by WebNovel, but had not heard of EMP or A&D. This is valuable info.

 
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