I understand that in a traditional contract Royalties are often calculated on the list price of a book. That method does not reflect actual accounting principles when properly accounted for on a profit share model.
Yes, but you aren't offering a profit share. A profit share is a 50/50 split of profits. You're paying that on ebooks, but on print books you're paying only 15%.
I believe that I previously detailed what Goods, Services and Production entailed in a previous response, in case I have not please see the list:
Cost of Goods: Retailer Freight (Distribution charges), Copyright, ISBN x3, Barcode.
Break-even for Cost of Goods is 19 units sold, and Authors, Artists, Staff, and the House begin to earn at this point.
Cost of Services & Production (limited to 50% as mentioned previously): Managing Editorial, Copy Edit, Proofing, Review, Cover and Interior Design, Editorial, Marketing, Research, and Sales.
This needs to be in the contract, for two reasons: the author needs to know exactly what will be deducted for the purpose of royalty calculation, and also needs contractual assurance that this won't change without notice. In a publishing relationship--regardless of good will on both sides--the only thing that counts is the language of the contract, which, for the author's protection, needs to be comprehensive and precise.
I'll also say that this is one of the worst royalty schedules I've seen. It's going to be quite some time before your authors start to earn--especially if, as many small presses do, you pay your editors and designers royalties on the books they work on, rather than a salary.
It is important to not that the actual per book royalty on this model with this form of standard accounting actually gradually increased with each sale, instead of remaining pegged to a fixed price. At unit sales rates above 2500, the per book royalty will often outperform the fixed list price.
How many books have you published that have generated that level of unit sales? Not counting author purchases. I'm also unclear on how a royalty could outperform the list price, since by definition a royalty is a percentage of sales income.
Dropping below the minimal sales threshold will not trigger an automatic reversion as that would be counter to TZPPs aim of working with authors over the long term. You are correct that in that instance an author is dependent on TZPP's goodwill; but if an author dislikes working with us enough to request that I revert the rights at that point, then I'm not going to withhold that from them. There likely exists other areas in our relationship that are strained.
True. But the author has no guarantee of this, and thus no protection if you choose not to relinquish rights.
I'm looking at things from the author's perspective. I'm also sympathetic to the publisher's perspective. Contracts need to be a balance between the interests of both. In this case, it's hard for me to see what interest you might have in holding on to a book that's selling fewer than 25 copies a year. So where would the harm be in automatic rights reversion once sales fell that low?
>> I've said this before, we're not for everyone. Authors these days are very guarded of their rights and very skittish where their relationships are concerned. If you're not looking to develop an ongoing relationship with us, we're likely not a good fit to begin with. <<
Being protective of one's rights and looking out for one's own protection doesn't preclude having an ongoing relationship with one's publisher. These two things should not be set in opposition. Sadly, they often are--at least, by publishers.
A key that you miss in your suggestion of a WFH contract is that a WFH has a single point of consideration (ie a one time payment for the copyright) there would be no royalties involved and the writer in that situation would transfer all rights and ancillary rights to the work, the technical author of the work is then the Publisher or other WFH buyer. The simple act of offering royalties negates the WFH aspect.
No. WFH authors do sometimes get flat fees, but many earn royalties as well. What negates the WFH aspect is that you don't demand a copyright transfer. Basically, there's just no reason at all for you to have this language in your contract.
Looking back through my notes, I see that your original contract did include a transfer of copyright (though this was internally contradictory, since the contract also obliged the publisher to register copyright in the author's name). Possibly this clause is a holdover from that original contract.
Additionally, we are not paying an advance, why would I then change my model to pay a ghostwriting consideration?
Then why include it in the contract? "Publisher shall have the right to request Author to develop sequels or prequels, new or additional titles in a series, or related works using any and all such elements,
and may commission or contract with any other person(s) for the preparation of such sequels, series, or related works with Authors consent."
As far as pen names go, those are not protected by anything, and individuals can have similar names or pen names. >> I think that this is an aspect that is a non-issue, as I have no intention of taking the name just to spite an author, and the clause is clear that it is as we promote it, additionally we use this clause in ensuring quality control when chatting with film producers for options.<<
It's not a non-issue if it's in the contract. If you don't intend to take ownership of a writer's pen name, why do you "reserve all rights" to it in your contract?
I understand your feelings on the Agency clause. Again, this is only a concern for an author who has an agent. For those who do have agents, the agency clause if clear that it only applies to works or derivative works which are expressly covered in that particular agreement. The main legal purpose for this clause is so that we can properly account and pay royalties when an agent is involved. I do appreciate your caution, however, this is a clause that is not likely to be amended.
You can properly account and pay royalties without the extra verbiage about sequels, options, and "any and all rights". And no, it's not clear at all that the clause applies to works expressly covered in the particular agreement--because option works, while
mentioned in the agreement, are not yet actually contracted for. How do you know, anyway, that the author doesn't have a one-book contract with the agent? Here's the actual language of the clause (my bolding):
"Author hereby authorizes and appoints [Name and Address of Authors literary agent or agency] (“Agent”) to act as Author’s agent in connection with this Agreement,
including but not limited to the disposition of any and all rights in the Work, and sequels to the Work, and any options to future work of the Author under this Agreement. Accordingly, Agent is hereby fully empowered by Author to act on behalf of Author, to collect and receive all sums of money payable to Author, and to receive any and all statements, notices, or other communications to Author in connection with this Agreement. Receipt by Agent of any such payments, statements, notices, and other matter shall be a valid discharge of Publisher’s obligation to Author for such matters under this Agreement. This clause creates an agency coupled with an interest as between Author and Agent."
Sure, you may hardly ever actually work with agents. But that's no excuse for a bad Agency clause.
We use an economy of scale to help push our authors sub-rights, thus the more we have, the easier it becomes to do so.
What subrights have you sold to date? What arrangements do you have in place to access foreign markets, the film world, etc.?
I understand that much of your concern may stem from the fact that we do work with many first time authors, who may be unused to negotiating a contract and concerned that they don't have the voice to stipulate their terms. I appreciate that, it is a needed service.
But in this case, apparently, quite useless.
Look, I don't think you have ill will here, or an active intent to exploit your authors. You did change some of the more dreadful aspects of your earlier contract, and I acknowledge that. But I do think you may not properly understand your own contract, or at least the implications of some of its language. It's clear you don't want to make further changes, and that's your right, though I think it's regrettable. I'm actually glad we're having this exchange, so authors can make up their own minds.
- Victoria