Simon & Schuster Changes The Rules: Goodbye Reversion of Rights!

May 19th, 2007 · 19 Comments
by Kassia Krozser

It is a general rule of life that the party who drafts a contract is the party who benefits the most. Sure, it’s not a law or anything. Think of it as more of a guideline. Thus, when Simon & Schuster announced (in a quiet, not designed to stir the waters way) that it was changing its standard contractual language to retain rights to a book for the entire length of a copyright (expanded fairly regularly by our own Congressperson, Adam Schiff), nobody thought, “Hey, wow, that’s great for me!”

Shouldn’t the author at least retain choice and decision-making authority over his or her work while it remains in copyright?

Let us note for the record that changing standard, near-industry wide language is a bit like moving mountains a foot or so in another direction. There is rarely a touch of whimsy involved and the actual change only comes after long, dull meetings, so of which involve PowerPoint (when a meeting involves PowerPoint, you know you’re in for a good time). Generally, these changes come about when it is determined that they are good for the company.

We have no doubt that Simon & Schuster will argue, quite forcefully, that this change is good for authors. Perhaps for some, it will be. But it will be even better for the publisher. To wit:

“We believe that our contract appropriately addresses the improved technology, increased availability, and higher quality of print on demand books, and reflects the fact that print on demand titles may now be readily purchased by consumers at both online and brick and mortar stores. We are embracing print on demand technology as an unprecedented opportunity for authors and publishers to keep their books alive and available and selling in the marketplace in a way that may not have been previously possible for many authors, and are confident in the long term that it will be a benefit for all concerned. We would also like the author and agent community to know that, when necessary, we have always had good faith negotiations on the subject of reversions, and will continue to on a book-by-book basis.”

Reversion of rights — which long-time readers will recall is a favorite topic of ours (look, all humans are geeky in their own special way) — should be the most important topic on the minds of all authors in this current business environment. Sure, you’re all focused on the writing and whatnot, but if you’re not seriously grasping the implications of who owns the rights to your work, you are not serious about the business you’re in. There is a technical term for what will eventually happen to you.

Rights are squishy things. Authors, by default and law, own the copyright to their work. Publishers acquire the right to publish or distribute an author’s work. Sometimes, because of the way territorial rights work (see how all of our blatherings come together?), multiple publishing entities own different distribution rights. US, UK, Australia, hardcover, trade, mass market paperback, audio, etc. Each entity that acquires the distribution rights pays the author money, most often in the form of advances and royalties.

There are issues relating to the transfer of copyrights or specific instances of the copyright to licensees (publishers), but that is not really relevant to this discussion. If you’re as fascinated by this topic as we are, you can start here and wander where the links take you. Fascinating stuff — you’ll probably lose an afternoon to curiosity and wonder.

Simon & Schuster, being prescient enough to see the value of electronic content, has realized that they will only benefit from future riches if they own the rights to a work and are able to distribute said work for a very long time. In this case, it’s 70 years after the death of an author for works created after 1978. As the way humans access and read information continues to evolve, it’s is understandable that publishing houses would want to hold on to their assets for as long as legally possible.

Except…wow. Royalties paid to authors can range from 15% to 5%. There are tiers and whatnot that determine royalties, and, yes, there remain egregious practices in the industry such as semi-annual accountings with really long periods of time to issue statements after the close of the period, plus reserves and whatnot that lower the actual payout. Royalty rates also factor in such concepts as “deep discounts” (lower royalty) and clubs (ditto). There are many other factors, including, but not limited, to subsidiary rights (this is a good analysis of royalties, too). Electronic editions of books, under many agreements, can be considered subsidiary.

It all really depends on your specific agreements, so we’re talking in generalities when it comes to numbers.

Yeah, yeah, yeah, we know, you want to know what this means. Quite simply, it means that Simon & Schuster wants to own the rights to your book for the entire duration of the copyright. The good news is that you’ll be dead for 70 years of that time period; the bad news is that as long as S&S owns these rights, you can’t do a thing with your book. As markets evolve and grow, you will be at the mercy of the publisher’s whims as to when, where, and how your creation is exploited.

Up to this point, authors have had, at least, the promise of rights reverting to them when a book goes “out of print”, though out of print is also one of those squishy publishing things that don’t always work out the way authors expect. The new Simon & Schuster language essentially means that as long as a book exists in the publisher’s “catalog”, the publisher owns the rights. Define catalog as your basic database with titles that could potentially but not necessarily exploited, and you have a whole lot of books that their creators cannot market and sell in other ways.

While it’s possible that the eventual value of most of these books will not be much in the way of actual dollars, shouldn’t the author at least retain choice and decision-making authority over his or her work while it remains in copyright? Let’s add one more caution: since today’s agreements cannot possibly address all ways works will be published, marketed, and paid for, the chance is great that Simon & Schuster will make money off of, oh, excerpts or micro-content, that may not flow to the author.

It is likely that other publishers will follow Simon & Schuster’s lead, after performing careful in-house analysis because wholesale changes to standard language across an industry would be, shall we say?, considered suspect:

“Other major publishers have not followed suit,” said Guild executive director Paul Aiken. “We’ll be watching for that, of course, since coordinated moves would have serious legal implications.”

We have heard that the technical term for this is “collusion”. No industry wants to be accused of that!

If we were to make a recommendation to authors, we would strongly suggest following practices done in the motion picture industry: licensing rights to specific distribution areas for specific time periods. Five years, ten years, whatever seems reasonable for the specific right. When the term ends, renegotiate the deal or take your rights elsewhere. Publishers aren’t acquiring blanket distribution rights because they are nice people who want to make sure an author is published far and wide; they acquire these rights because they are valuable.

And something so valuable to publishers is surely valuable to authors, right?

File Under: Our Continuing Fascination With Copyright · The Business of Publishing

19 responses so far ↓

  • Karen Scott // May 19, 2007 at 3:34 pm

    I find this whole issue totally fascinating, and wonder how many grateful newbie lambs will fall prey to S&S’s evil machinations…

    Also, how many established authors will re-contract on this basis.

  • peter brantley // May 19, 2007 at 4:42 pm

    S&S is more overt than many other trade publishers, but everyone is thinking about the value of backlist content – who should be able to monetize, and how, content that is increasingly available in fashions other than traditional paper editions. I’ve written about a coming wrinkle on this (shameless promotion) … see http://blogs.lib.berkeley.edu/shimenawa.php/2007/05/10/re_contracting_author_rights

  • Martyn Daniels // May 20, 2007 at 4:38 am

    This is a major issue and is both an arrogant approach to contracts and relationships. Will the publisher market and actively sell the long tail or just put it on the pod bookshelf and deprive the author of republishing it with someone who cares about it and is williong to invest in it. Publishers make mistakes, not all books make it first time round and some need a second opportunity. This is like locking up the art works in the vaults for the sake of owning them.

  • Janet Szabo // May 20, 2007 at 4:42 am

    I am curious: how do you think self-publishing factors into this, if at all? I am thinking both of traditional self-publishing–where the author fronts the money and efforts for all book creation, marketing, and distribution–and POD publishing like Booksurge and AuthorHouse. If this becomes an industry-wide practice, will more authors elect to self-publish?

  • David Queenann // May 20, 2007 at 5:53 am

    Well, if it does become an industry norm, and they don’t find themselves facing federal charges or class action lawsuits over it, then it may be a motivator for many authors to look more seriously at self-publishing. Personally, rights should be sold for individual printings, or for back-to-back printings that are made to meet existing consumer demands because a book is hot. If the book sells out and the publisher chooses not to print more, or even if they have extra stock and choose not to print more, they shouldn’t be able to sit on an author’s work – as they aren’t doing anything with it. I think author’s who are really serious may become their own publishing houses, or form publishing cooperatives to do an end-run around the system.

  • Kassia Krozser // May 20, 2007 at 9:06 am

    Martyn — your thoughts are like mine. It is one thing to own rights, it is an entirely different animal to exploit them. There will be much in the way of back catalog that simply sits for want of exploitation. Maybe the author or another entity could do a better job, maybe not.

    Janet (and David) — I think there will be some push toward more self-publishing, but I also think the dream of being published by a big house is alive and well and very important to many authors. Right now, the fact that other houses haven’t made this move gives everyone negotiating leverage. As agreements change, you will see increased moves toward authors reviewing their options. Depending on the book — and this is a key consideration — there may better ways to publish.

    I do get why S&S is making this move; I simply think it’s very bad for authors.

  • Susan Helene Gottfried // May 20, 2007 at 1:44 pm

    Thank you for clarifying the whole bit about the rights being owned for the length of the copyright. When I’d asked for clarification about that on another blog, I didn’t get a particularly enlightening response.

    Either way, I agree that unless you have an infallible crystal ball, it’s not a smart move.

  • Anne 2.1 » Blog Archive » links for 2007-05-20 // May 20, 2007 at 4:27 pm

    [...] Simon & Schuster Changes The Rules: Goodbye Reversion of Rights! | Booksquare “It is a general rule of life that the party who drafts a contract is the party who benefits the most.” (tags: publishing copyright ip contracts legal media ebooks) [...]

  • Marcus // May 20, 2007 at 6:12 pm

    Of course, the really lovely thing about on-demand publishing is the middle man isn’t needed as much any more.

    Hard lessons the MPAA and RIAA have been beaten over the head with for years.

    Most authors don’t make a whole lot of money in the first place, and unlike, say, an action film, the barriers to entry are typically very low.

    So if so many authors don’t make a whole lot of money from their book, how strong, pray tell, is the motivation to sell your kidney to S&S in that, as yet not completely predictable, date in the future when the electronic book reading experience is widely considered as positive or better than reading printed matter?

  • Kate Douglas // May 20, 2007 at 9:38 pm

    Thank goodness I have a terrific agent.

  • Kassia Krozser // May 21, 2007 at 7:15 am

    Kate — I’m hoping you’re being facetious. Or that your agent represents a list of authors who have sufficient clout to withhold work until this clause is changed. It would take a lot of these authors to impact the publisher’s bottom line before they reconsidered this position.

    It is not the norm for a certain level of author to be in a position to seriously negotiate terms of the standard contracts. There are, always, negotiable aspects of the deal, but publishers will only “give” so much and on certain points. A good agent knows how, when, and where to push; any time the standard language is altered, it is precedent-setting.

  • Kathleen Dante // May 21, 2007 at 11:34 am

    Kassia — A good agent will walk away from the table or even not submit to S&S if they prove to be immovable on this issue.

  • David Thayer // May 21, 2007 at 1:41 pm

    I was struck by Kathleen’s comment that a good agent would walk away from S&S over this issue.
    A few agents went on record objecting to this change, Brian DeFiore and, I think, Simon Lipskar from Writers House, but I don’t know how negotiations might play out for the vast majority of authors if faced with the choice between S&S and nothing.

  • Suellen Ocean // May 21, 2007 at 1:56 pm

    Last August I sold the electronic rights to the California Oak Foundation to publish my self-published book, Acorns And Eat’em. They added the phrase “5 years” which I thought was great. That means that they will re-negotiate with me in 5 years. They aren’t your typical publishers nor did I receive big bucks but there are caring business people out there.

  • Kassia Krozser // May 21, 2007 at 3:12 pm

    As David noted, a good agent *might* walk away. As for will walk away? What if all the other publishers make the same moves? What if it’s the choice of this clause or no contract — and nobody else is biting? There are so many variables in a negotiation. It’s going to take more than one agent walking away from the table. The potential for loss on the part of S&S needs to be significant enough that they would reconsider this “standard” language.

  • $1000 for an article? // Jun 28, 2009 at 8:09 pm

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  • from the Road // Dec 13, 2010 at 8:15 am

    [...] Book Square Blog on Simon & Schuster: http://booksquare.com/simon-schuster-changes-the-rules-goodbye-reversion-of-rights/ [...]

  • The Wild Hunt » Pagan Authors and Reversion Rights // Oct 16, 2011 at 11:24 am

    [...] property, or trust the ones who do. As digital rights become more than a mere afterthought bigger publishers are trying to force increasingly draconian contracts on writers desperate to break…. In some cases publishers are outright refusing reasonable requests for the reversion of rights on [...]

  • Synchronized Chaos » A Conversation With Sarah Katherine Lewis Part II: Self-Publishing // Nov 4, 2011 at 9:15 pm

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