To authors, Alex Adsett offers many of the contract review and negotiating services of a literary agent.  For publishers, Alex Adsett provides the expertise of an in-house contracts administrator.

Whether you’re an author wanting advice on your first publishing contract, or a publisher negotiating a sale of subsidiary rights, Alex Adsett can review contracts, advise on industry standards, or negotiate on your behalf.

Essentially, D Publishing still have the right to change the fee structure and (almost all of) the terms of the contract at any time, and the Author still has no recourse to terminate the contract.

Positives

To first look at the positives, D Publishing have amended the contract to properly reflect what they said were their intentions in the first place, and so the Author clearly now has the right to distribute their Work in channels not being exploited by D Publishing.

The Author has the option to nominate whether they want to (a) use D Publishing to publish in Core Distribution Channels only (ie. Dymocks stores, Dymocks online and Google ebooks), or (b) allow D Publishing to control Secondary Distribution Channels and subsidiary rights as well.

At present D Publishing have not nominated any Secondary Distribution Channels that they intend to exploit, but I understand this is intended to cover other e-retailers such as Amazon, or agreements with other Australian bookshops.  When they do commence selling in these areas, Authors that have chosen this aspect of the service may benefit from the superior clout of D Publishing, but are also restricted from exploiting this area themselves.  Although still subject to change completely at D Publishing’s discretion, the Rate Card currently sets out that D Publishing will retain 20% commission from exploitation of Secondary Distribution Channels.

D Publishing have also limited the Subsidiary rights they may hold to non-exclusive i) anthology & quotation, ii) extracts, and iii) condensations, with the license and fee split subject to the Author’s consent.  This is a big improvement from the previous position where D Publishing could claim exclusivity over all subsidiary rights and unilaterally decide their percentage of income.

In an important allowance, D Publishing must obtain the Author’s consent before adding any new channel to the Core or Nominated Secondary channels.

Negatives

Unfortunately, despite the improvements with clarity and transparency, the D Publishing contract still does not allow the Author to reasonably terminate the contract. In a small concession, the term of the contract is now ten years, with automatic ten year renewals if the Author fails to nominate otherwise.  Although D Publishing have the right to terminate the contract upon 30 days notice at their convenience, this right has not been extended to the Author.  Even goliath Amazon allows Authors to immediately terminate their distribution, subject to delays for removing digital copies and selling through of existing stock.

Standard commercial publishing contracts (with publishers who actually invest their own resources into a Work) allow for reversion of rights when a Work is out of print or no longer selling.  Self publishing or vanity press contracts allow for termination at the Author’s discretion. The D Publishing contract includes neither of these options, and the Author may remain trapped into the arrangement with D Publishing, unless D Publishing manage to breach their nebulous obligations or go into liquidation.

To further illustrate how unreasonable it is for an Author not to be able to walk away from the contract, in clause 21, D Publishing still reserves the right to change the terms of the contract or any of the fees payable to the Author, at their complete discretion. (Although Note 15 indicates commercial terms cannot be changed, clause 21.1 says otherwise.) Rather than drafting reasonable provisions in the first instance, D Publishing advise that the Author should trust in consumer protection legislation, potentially forcing Authors into complicated legal arguments.

Absurdly clause 21 includes the line, “The Author is deemed to accept changes to this Agreement by continuing to use D Publishing’s publishing services” while the contract still does not allow the Author any right to terminate.

Additional concerns with the contract include:

1. The Author is not able to license any part of the Work to another publisher, whether or not this infringes the license with D Publishing (clause 3.4).
2. D Publishing has the right to make unlimited chapters available for free (clause 9.2).
3. If D Publishing decide a legal review is necessary, the cost of this legal review is to be paid by Author, who has no option to refuse or terminate (clause 10).
4. The warranties and indemnities (clause 11) are still very broad and onerous.  This is not unusual for a self publishing contract, but the Author should be aware of the risks involved.
5. There is the implication that the Author can only take legal action against copyright infringement if D Publishing has declined to do so (clause 13).
6. Under the available version of the contract, Authors are still not allowed to use an ABN, although there is at least now an acknowledgment that an ABN compatible contract can be requested (clause 18).

Despite the improvements with this version of the D Publishing agreement, I would have serious reservations about any Author signing the contract.  The complete lack of adequate termination provisions leaves the Author with no ability to walk away in the face of inaction, incompetence or shrinking returns.  D Publishing’s ability to amend the contract whenever they choose and the contract’s generally one sided nature could be grudgingly acceptable if the Author had the right to abandon the arrangement.

In any event, the D Publishing contract really is as terrible as some of the online commentary suggests.  There seems to be a substantial disconnect between their friendly and reasonably FAQs and the actual wording of the publishing contract.  Unless the contract is amended to better reflect the stated aims, I would be unlikely to recommend any author sign the publishing aspect of the deal.

It is important to note that the “Produce My Book” function and “Print My Book” function do not lock the author into any unfair terms, although the pricing model is quite expensive when compared to similar services.

The absolute howlingly awful points in the D Publishing fine print, are that D Publishing purports to give itself the right to 1. amend the terms and conditions (including the royalties) at any time, 2. Include no allowance for the author to terminate the contract, and 3. D Publishing take an exclusive worldwide license for all languages, with no apparent interest in exploiting outside Australia, but preventing the Author exploiting these rights themselves.

Unlike commercial publishing contracts and common vanity press contracts, the D Publishing contract includes:

1. That the contract’s terms (including pricing) may be amended by D Publishing at any time, and the Author has no ability to agree or terminate the agreement (clause 1.4). [Helpfully, the contract says the Author is deemed to accept changes by continued use of the publishing services, but does not give the Author any way to stop using the publishing services].
2. D Publishing take all subsidiary rights, including world distribution rights, translation, and adaptation (which may include film, television and stage dramatic adaptation) without any obligation to use these rights, but preventing the Author doing so (clause 3.1).
3. There is a confused definition as to what is D Publishing’s exclusive distribution area, and I was unable to find a list of “Nominated Secondary Distribution Channels”.  In any event, D Publishing appear able to nominate anything as exclusive to them (without actually doing anything with the channel) and the contract prevents the author granting any third party the right to distribute the Work, eg. Indie Booksellers, or any ebook retailer that is not on the agency model (incl Amazon) (clause 3.4).
4. D Publishing have right to set whatever subsidiary rights split they want with the author. At present, “not less than 20%” could still mean 100% to D Publishing (clause 5.4).
5. There is no provision for the Author to terminate the contract, unless D Publishing are in breach of a term or become insolvent.  This means D Publishing have the right to arbitrarily change the terms and the author has no right to leave, or D Publishing can hold the rights forever (without ever having printed copies or promoted sales) with no ability for rights to revert to the author. (clause 14).
6. Ridiculously, the Author is not allowed to use an ABN. (clause 17.3). This potentially excludes professional authors, or authors who hope one day to become professional.

While there are other concerns, some of these mirror the standard clauses found with either commercial publishers or vanity press.  For example, some people have raised concerns about the Author being responsible for returns, while this is generally deemed to be an acceptable risk in exchange for the Author retaining additional control. (Although in this case the Author has no control, but all of the risk).  The Warranties clause is onerous, but then, it usually is, and it is standard for film tie-in rights to remain with the print publisher, as this is not a new right but essentially a reprint.

The pricing structure is a concern, and although not ridiculously bad, it is certainly not providing a revolutionary share of income to the Author. On my (very rough) calculations, the Author would receive approximately the same return as from a standard commercial deal, but with much more of the risk, and no professional editing, marketing support or distribution.

D Publishing have indicated that they are considering the criticisms of their agreement, and intend to release a new version of the contract in the new year. It will be interesting to see what they come up with.

Contracts can be tricksy things.  You may be so ecstatic that someone anyone wants to publish your book that you would sign the house away, but take a deep breath and hold on. A little forethought before you sign will help build your career as a writer and protect you if things go very well or very badly.

The first point to consider isn’t even contractual: you need to be satisfied that the publisher offering the contract is reputable. If they have been around for decades and published Peter Carey, you can probably trust they are legitimate. If you haven’t heard of them before: check references with previous authors, investigate if your local bookshop stocks their titles, and check the quality of their previous books.

The next thing to remember is that you do not need to accept everything that is offered.  A genuine offer is not going to be withdrawn because you try to negotiate, and the worst that can happen is that the publisher says no.  Knowing that, here are some of the bigger issues with contracts that you should watch out for, and try to improve if not up to standard.

Licence vs Assignment

As an author, you will most likely be the sole copyright owner in your work. When you sign a contract with a publisher there are a number of things that can happen to your copyright.

The most common option in trade publishing is for you to grant the publisher an exclusive licence. This means that you remain the copyright owner in name, but the publisher owns the exclusive rights you have licensed. This is comparable to the publisher `renting’ the copyright in the work from you. If someone rents a house from you, they have the exclusive right to live in the house, and even though you are the owner/ landlord, you cannot do certain things with your property while it is leased to someone else. If you grant the publisher an exclusive licence for the copyright then you cannot take advantage of whatever specific rights you have granted to the publisher for as long as the publisher has those rights.

It is not uncommon, particularly in educational publishing, for a publisher to request an assignment of copyright. This means that the publisher becomes the owner of the work. G oing back to the house analogy, this is like selling someone your house instead of just renting it to them. You do not have any rights in the work anymore, and you will probably not be able to get the work back when the publisher has finished using it.

Sometimes you can get away with granting only a non-exclusive licence. This is used more when licensing a short story into an anthology, and it means that the publisher has the right to use it, but you can still use it as well.

Royalties

a) Flat fee or royalty: When you license or assign rights in your work, the publisher will usually pay you by royalties (with or without an advance) or by a once-off flat fee payment.  Royalties are a way for the publisher and the author to share the risk with a book. It means that the author will get a percentage share of the profits from each book sold, and so the more the book sells, the more income an author will receive. A flat fee is more common when the rights are being assigned to the publisher, and means the author will not receive any more income no matter how many or few copies the book sells.

b) Base royalty: It is important to look at whether your publisher has offered you a royalty against recommended retail price (RRP) or net receipts, as this can make a big difference to your income. The standard royalty in Australia for printed copies of the book is 10% RRP, which can roughly be equated to 20% of net receipts, while electronic book (e-book) royalties are about 25% of net receipts.  If your royalty is 10% of RRP, then no matter what price the bookshop sells your book at (eg full price at $30 or on sale at $2), you will still receive 10% of the recommended retail price set by the publisher.

If you are getting a royalty of 20% net receipts, then you receive 20% of whatever price the bookseller passes back to the publisher. Standard publisher discounts for bookshops range between 35 and 55%, so this means you might be getting a lot less for a book sold at a big chain store than you would for a book sold through your local independent bookshop.

c) High discount royalty: The royalty clause in your contract will probably include a lower royalty if the publisher has had to give a higher-than usual discount. If the royalty is based on RRP then this is not unreasonable, as the publisher is earning less as well. It is very important to make sure that the high discount reduction does not start lower than about 55%, as otherwise it would be reducing your royalty on standard bookshop discounts, not only in special circumstances.

d) Advance against royalties: An advance payment (different from a flat fee payment) is recoupable against royalties, which means the publisher will keep all the author’s royalties until the advance has been earned back. Afterwards, any royalties due are paid to the author at regular intervals (usually every six or twelve months). As a rough guide, the publisher should be willing to offer you an advance equal to half the royalty of first print run.

For example: If the author is going to get 10% of RRP for a book priced at $20 (exclusive of G ST) with a first print run of 2,000 copies, if the whole print run were to sell through without any damaged or free copies, the author should receive $4,000. As there is always risk and uncertainty in publishing, you could expect the publisher to offer the author an advance of $2,000 before the book is published. The author’s royalties on the first 1,000 copies sold would be deducted from the $2,000 advance, but the royalties due on any copies sold after the first 1,000 would be payable to the author.

e) Cost share: Some publishers are now offering a higher royalty in exchange for the author’s royalty contributing to half of the print and marketing costs. This is not necessarily dodgy (although should ring an alarm bell) but before you agree, it is important that the costs are i) capped at a reasonable amount, and ii) that your consent is obtained before any significant costs are incurred. Without these protections, you may never see a cent of your royalties, particularly if the publisher starts adding up exorbitant publicity costs and expecting you to help pay.

Rights

Copyright in a book can be split up in any number of ways, and can be licensed (or assigned) to any number of different people.

When the publisher licenses the rights, they are going to try to acquire as broadly as possible – all forms, editions, and languages throughout the world. This will give the publisher the best chance of exploiting all the possibilities in your book and recouping their investment. Before licensing all or some of your rights you should ask: i) what is the publisher going to dif they get these rights and ii) what would I be able to do if I kept hold of these rights?

If an Australian publisher wants World rights, or UK, Asia, or USA , or translation, then you need to know that they are able to exploit these rights in a way that will help your book. At the same time, there is no point your holding on to World and translation rights if you have no way to use them yourself.

When the publisher licenses your book, they will want to use some rights directly themselves (eg to print copies and sell them in Australia), and sublicense some rights to other people (eg translations). The rights that the publisher are able to sublicense are called subsidiary rights, and instead of getting a royalty as when the publisher directly sells a copy of your book, you will usually get a 50 – 90% share of any subsidiary rights income received by the publisher. Some subsidiary rights include quotation rights, audio, UK or US sales, translations, and film.

Reversion

The term of most book publishing contracts is duration of copyright. This means the publisher could hold the rights for 70 years from the author’s death, subject to certain conditions. It is important to have a reversion clause in the contract so that the copyright reverts back to you if the publisher is no longer selling the book or keeping it available for sale. With e-books now available, your book might always be available, so I recommend having a reversion clause that requires the publisher to sell a certain number of your book (eg 100 copies) every year, or else the rights revert to you.

Other things to watch out for

There are many things that should be included in a publishing contract to both protect the publisher and protect the author. Along with licenses, territories, rights, and royalties, there should also be some mention of delivery dates and what exactly is being delivered, what will happen if your manuscript isn’t quite what the publisher wanted, who will pay for any permission fees and cancellation if the publisher does not fulfill its obligations.

It is important for you, or someone you trust, to read every word of the contract you are signing. Do not make promises you cannot keep (ie delivery dates or warranty clauses) and do not sign anything that you do not understand. Essentially, anything that the publisher has promised you in arranging the publishing deal should be included in the contract. If your publisher has promised you a publicity trip to New York and gold laminated jacket cover, get them to put it in writing.  Seek independent advice if you do not understand the contract or need help with negotiation, but never be worried about asking your publisher for an explanation of the terms.

A publishing offer is an exciting thing.  Your brilliance as a writer is finally being recognised, and you’re on your way to publication.  Now you just need to make sure your rights are protected, while maintaining a good relationship with your publisher-to-be.

Most publishers will give you a formal written offer before they supply the contract. Negotiation starts here.  Usually, the ‘big’ deal terms will be covered in the offer; advance, royalty, formats, territory, assignment or license, with the finer details such as subsidiary rights, reversion, options etc. covered in the contract.

Once you have agreed to the offer (in whole or part), it forms the basis of the contract the publisher then draws up for you. Although you can keep negotiating all points until the contract is finalised, it is considered unprofessional to start re-negotiating something you had previously agreed, and may well annoy the publisher.

Starting off negotiations, you may as well go in all guns blazing and ask for everything you want changed in the contract.  As long as you are polite and back yourself with solid reasons, there is rarely any harm in asking, and (almost) the worst the publisher can do is say ‘no’.   Publishers accept that negotiating is part of business, and a first round of negotiations would be unlikely to jeopardise the deal.

It is hard to mount a successful negotiation, if you and the publisher know that you’re desperate to accept no matter what.  Decide in advance the changes that would be nice and which are ‘dealbreakers’.  Be prepared to walk away if the contract does not meet your minimum standards, but never threaten to walk if you don’t mean it.

A standard publishing contract should include:

i) Description of what is being contracted for, including the proposed name of the book, the author a short description, and when it is to be delivered.

ii) License or an assignment.  An exclusive license means you are still the copyright owner, but the publisher has the rights to control your work, subject to the contract.  An assignment means the publisher becomes the new owner of the copyright, and you rarely have any further control.

iii) Rights, including print, digital, languages and territories. When the publisher acquires the rights, they are going to try to license as broadly as possible to give them the best chance of exploiting all the possibilities in your book and recouping their investment. Before licensing all or some of your rights you should ask: a) what is the publisher going to do if they get these rights and b) what would I be able to do if I kept them? If the publisher is likely to do a better job, and you still have some say, it is usually better to license the rights so that they can be used.

iv) Term of the contract.  Is it for a set number of years or for the life of copyright (ie. 70 years from death of author)? Publishers try for as long as possible, but either way it is very important to have a clear ‘reversion of rights’ clause so that copyright reverts back to you if the publisher is no longer selling the book. With e-books now available, your book might always be available, so it is strongly recommended that you have a reversion clause tied to how many copies of your book are sold in any format.

v) Payment.  When you license or assign rights in your work, the publisher will usually offer to pay you in royalties (a percentage of every book sold) or by a once-off flat fee payment.  An advance is an upfront payment which is recouped against royalties as books are sold.

Royalties are a way for the publisher and the author to share the risk with a book. It means that the author will get a percentage share from each book sold, and so the more the book sells, the more income an author will receive. A flat fee is more common when the rights are being assigned to the publisher, and means the author will not receive any more income no matter how many or few copies the book sells.

It is important to look at whether your publisher has offered you a royalty based on recommended retail price (RRP) or net receipts, as this can make a big difference to your income. Be wary of high discount clauses which give you a lower royalty rate if the publisher sells at an unusually high discount.

As a very rough guide, Australian standards are: print book royalties 10% of RRP, ebook royalties 25% net receipts, high discount royalties starting at no lower than 55% discount, and subsidiary rights splits at no lower than 50% (and often much higher) to the author.

There are many other things to watch out for, so it is important for you, or someone you trust, to read every word of the contract you are signing. Always check to make sure the contract includes everything you agreed, and nothing sneaky that you did not.  Do not make promises you cannot keep (ie delivery dates, warranty clauses) and do not sign anything that you do not understand.  Seek independent advice if you do not understand the contract or need help with negotiation, but never be worried about asking your publisher for an explanation of the terms.

The O’Reilly Tools of Change for Publishing conference was held in New York over 14 – 16^th February, and was an exciting meeting of international publishing innovators to discuss where we are and where we’re heading. There was a diverse range of attendees; from publishers, booksellers, librarians, bloggers, successful businesses and start ups.

It is interesting seeing how prevalent the use of twitter at these conferences has become, with the stream of tweets running too fast to really keep an eye on as well as engage with the excellent talks.  Each of the rooms had power adapters strung out below every row of chairs to accommodate the conference’s accumulation of laptops and mobile phones.

The speeches were varied with two of the best being author Margaret Atwood’s dry and witty talk on why we shouldn’t forget the writers at the heart of the publishing industry and James Bridle’s inspiring speech on the passion for the experience of reading, reminding us why we’re working in this industry in the first place.

Many listened avidly to tips on how to manage metadata, web only publishing workflows, and we heard again and again, that the book is now so much more than the container in which it comes. There were some familiar North American faces, such as Richard Nash (Cursor), Mark Coker (Smashwords) and Michael Tamblyn (Kobo) who had all made trips out to Australia in 2010.

Australia was represented by Queensland Writers’ Centre CEO Kate Eltham with her very well received Ignite talk on Four Things a Catastrophic Flood Taught Me About Social Media …(and One Thing It Taught me About Publishing) and Gus Balbontin from Lonely Planet spoke about the challenges ahead but with the ‘take home’ message that we all need to have a mission beyond revenue.

There were the buzzwords that seem to emerge from any conference such as Findability (or Discoverability), Convergence and Container.  On these topics, a TOC favourite Brian O’Leary said, “When content scarcity was the norm, we could live in limited context. But now, in era of abundance editors have a new and different role: figuring out how what is published will be discovered.”

Accessibility would have been a buzz word, if it wasn’t such an important and timely topic. There were a number of talks on the value of improving the metadata in ebooks to open up new markets to print disabled readers. The point was convincingly made that it not only makes financial sense, but also legal and moral sense.

With topics such as, What Do eReading Customers Really, Really Want? An In-depth, Research, and Data-driven Exploration of Reading Behavior, Content Consumption, and Consumer Attitudes Toward eReaders and Multifunction Devices, there was no shortage of statistics floating around. It was quite shocking to hear that for all the time and expense that goes into developing Apps, even the best see a decline in sales after an average of 14 days.  8pm-12pm is ebook shopping primetime and not as many people are reading on smart phones as one would expect.

It is worth noting that many of the conversations taking place in Australia, for example territorial restrictions, threats to bricks and mortar bookstores and social media strategies, are the same ones taking place amongst our overseas colleagues, along with an increasing emphasis on getting the metadata right, and a concentration on the content rather than focusing on what it is being read on.

In a message for booksellers that we’ve been hearing for a while now, building a strong place within the community is the best route to survival, and for both publishers and booksellers, offering an authentic experience is seen as a valuable antidote to the gathering digital storm.

Increasingly, as more and more start-ups and developers and entrepreneurs took the stage, I got the impression that the digital future was already here.  Any publishers or booksellers who are pretending it isn’t, or aren’t prepared to adapt, will be the ones who don’t survive.  Happily the tools to deal with this are already at our disposal, and with conferences like O’Reilly Tools of Change, more ideas, development and collaboration will take place each year.

You’ve written your book (and edited, revised and rewritten) and now you‘re looking to be published. If you have already patiently submitted your manuscript to every available commercial publisher but not had any luck, then perhaps you are beginning to look at self-publishing as an alternative.

Self-publishing can work well for some people, but it is not for everyone. There are potential pitfalls along the way, and a handful of companies who will happily take your money and give you very little in return. But, be aware of the dangers, pay attention, do your research and ask questions, and you can make self-publishing work for you.

Definitions

Traditional commercial publishing is how the majority of books in Australia are currently sold. Traditional publishers will take on all the financial risks to publish your book, including editing, cover design, printing, marketing and distribution.

Self-publishing is where the author pays all of the set-up costs to produce the published version of their manuscript. This means taking on all the risks (and rewards) that would normally be undertaken by a traditional publisher. It can be a time consuming and confusing process, but means your book will be in print on your own terms.

Due to the problems with marketing and distribution for self-publishing titles, it is generally more suited to small print runs intended for private distribution only (eg, a family history prepared to be sold at a family reunion) or for non-fiction titles where the author has access to a ready market for their book at seminars and workshops.

Vanity presses (also known as subsidiary, joint venture, or co-operative publishing) charge fees to authors for publication. This can either be an upfront fee for printing, additional fees for editing, cover design, typesetting etc, or a requirement that the author pre-buy copies of their book.

In some cases, the editorial and cover design services offered by vanity press can be cursory, and most will not have a dedicated marketing team or distribution network – which are imperative for your book to succeed.

A company that makes its income from fees charged to authors, does not necessarily have to sell books to stay in business. Before proceeding down this path, you need to be very clear what you are paying for and what you get in return:

i)                      Do your research! Pop into your local bookstores and ask if they stock any books published by the company you are considering signing with. If not, have they ever stocked any books by that company?

ii)              If you can find copies of books published by the company, consider the quality of the cover design, paper, binding and typesetting. Would you be happy with this standard for your own book?

iii)            Get references from other authors who have signed with the company and ask them if they were happy with the service they received.

iv)            Make sure you have a contract and that it includes everything that has been promised you.

v)             Do you have a chance to approve the finished product before you pay?

vi)            How many copies of your book do you get at the end of it? (Note: You do not want to have thousands of copies sitting in your garage if you can’t sell them, but equally, you do not want to pay all this money and not receive more than 15 samples.)

vii)          Does the company have a reputable, nationwide distribution network?

Distribution

One of the biggest hurdles with self-publishing is distribution. How will you get your book into shops all around Australia or throughout the world?

If self-publishing, you will need to hit the footpath and sell yourself and your book to every bookseller you can get to listen. Do not expect your printer/vanity press to do this for you. You need to market yourself, or find someone to do it for you. Make sure you have the facility – either through your own website, a third party, your printer or vanity press – to sell books directly to the public.

There are a few distribution companies in Australia that agree to represent self published authors, and have the sales force to properly represent you to bookshops around Australia. Expect a distributor to retain up to 70% of the RRP of the book for their services. It is expensive, but still the best way to get your book selling.

The contract

The line between traditional publishers, vanity press and self-publishing is becoming more and more blurred, and it can sometimes be hard to spot a legitimate publishing offer. Some vanity presses offer a legitimate service to help authors self-publish, while some traditional publishers have started asking the author to pre-buy a certain amount of the print run, to make the costings work. In any case, legitimate or not, the minute a publisher asks you for money for any aspect of the publishing process, start to be wary.

No matter how you want to publish, get all deals in writing. From hiring an editor, to printing, distributing or a publishing deal, if it’s not in writing you have far less chance of protecting your interests.

1.       It sounds basic, but make sure you read and understand every clause of the contract. If you are confused about the legal wording, you’re not alone. Ask the contracting company what something means, or get professional advice.

2.       Make sure that the details in the contract are correct. If the terms do not match what you have previously agreed, ask why and get the terms amended.

3.       Just as important as what is in the contract, is what is not in the contract. If the publisher wrote the contract, then the chances are pretty good that it covers what you have to do for them (deliver, fee etc). You need to make sure that the contract also covers what they have said they will do for you, eg editing, typesetting, number of copies of the book (both printed by them, and delivered to you), distribution and marketing spend.

A self publishing contract should always include:

(i)             The names of the people or companies who are entering into the agreement;

(ii)           The details of the book – what is being delivered (ie title, subject, word length, illustrations if any) and when;

(iii)          Services being offered (is the company editing, printing, typesetting, marketing and distributing? If so, these need to be specified);

(iv)         The right of approval over the final cover and design. If possible, get a sample copy before paying.

(v)           Copyright ownership and acknowledgment in your name;

(vi)         The terms of the license – is it exclusive or non-exclusive? Is it for Australia only, or worldwide? Is it for print only, or electronic and audio too? Does it include subsidiary rights such as film and television and CAL income?

(vii)        Warranties and indemnities – make sure you can fulfil everything you are asked to warrant and that the indemnity is limited to the warranties only;

(viii)      Advance and royalties. Royalties should be paid biannually, and watch out for the distinction between royalties based on net receipts and recommended retail price (RRP). Standard publishing royalty is 10% of RRP, with discounts offered to booksellers and distributors, this equates to approximately 15-25% net receipts).  If there is a reduced royalty for high discounts, this should not be applicable until at least discounts of 51% or more;

(ix)         The cost to you to buy additional copies of the book  or issue a new print run;

(x)           Termination. You should be able to walk away (with print ready files) if you are not satisfied with the service. If in doubt, ask for the files up front, while the relationship is still amicable;

(xi)         Reversion.  Rights should revert to you if the company has sold less than 50 copies of your book in a 12 month period, but you might want to be able to walk away sooner than this.

(xii)        Finally, the contract should be a reflection of what you agreed with the company. Make sure everything that was promised to you is included in writing.

Costs:

Note that to have your manuscript structurally edited and proofread (roughly $1,500), a cover designed ($200) and typeset ($500 or do yourself) costs $2,200. This is still substantially cheaper than some vanity press who will charge you more than $4,000 to provide you with 15 ‘free’ copies and a promise of high royalties if copies of your book sell.

On the upside, there are many genuine vanity presses that will help you self-publish at reasonable costs. If you want the convenience of one company helping you navigate the self-publishing process, it is important to shop around, get quotes and know the value of what you are getting. Self-publishing is hard work, and finishing your manuscript is only the first step. While it is not for everyone, if you are aware of the pitfalls and get the promises in writing, you could become a published author on your own terms.

Hooray, you’ve been offered your first commercial publishing deal – congratulations! Now, watch out, because here comes the fine print.

Some publishers will make you an offer in writing outlining the biggest parts of the deal first; usually this includes the advance, the royalty rate, and the territories, although some publishers will send the contract straight out to you after an initial notification that they’re interested. Either way, remember you do not always need to accept everything that is offered and you are able to negotiate.

Be careful to let the publisher know if you are accepting only parts of their initial offer (advance, royalties, or territory), as they will otherwise assume you have agreed to everything, and it is harder to negotiate later.

Licence vs Assignment

A s an author, you will most likely be the sole copyright owner in your work. When you sign a contract with a publisher there are a number of things that can happen to your copyright.

The most common option in trade publishing is for you to grant the publisher an exclusive licence. This means that you remain the copyright owner in name, but the publisher owns the exclusive rights you have licensed. This is comparable to the publisher `renting’ the copyright in the work from you. If someone rents a house from you, they have the exclusive right to live in the house, and even though you are the owner/ landlord, you cannot do certain things with your property while it is leased to someone else. If you grant the publisher an exclusive licence for the copyright then you cannot take advantage of whatever specific rights you have granted to the publisher for as long as the publisher has those rights.

It is not uncommon, particularly in educational publishing, for a publisher to request an assignment of copyright. This means that the publisher becomes the owner of the work. G oing back to the house analogy, this is like selling someone your house instead of just renting it to them. You do not have any rights in the work anymore, and you will probably not be able to get the work back when the publisher has finished using it.

Sometimes you can get away with granting only a non-exclusive licence. This is used more when licensing a short story into an anthology, and it means that the publisher has the right to use it, but you can still use it as well.

Royalties

a) Flat fee or royalty:

When you license or assign rights in your work, the publisher will usually pay you by royalties (with or without an advance) or by a once-off at fee payment.

Royalties are a way for the publisher and the author to share the risk with a book. It means that the author will get a percentage share of the profits from each book sold, and so the more the book sells, the more income an author will receive. A ¯at fee is more common when the rights are being assigned to the publisher, and means the author will not receive any more income no matter how many or few copies the book sells.

b) Base royalty:

It is important to look at whether your publisher has offered you a royalty against recommended retail price (RRP) or net receipts, as this can make a big difference to your income. The standard royalty in Australia for printed copies of the book is 10 per cent RRP, which can roughly be equated to 20 per cent of net receipts, while electronic book (e-book) royalties are about 25 per cent of net receipts.

If your royalty is 10 per cent of RRP, then no matter what price the bookshop sells your book at (eg full price at $30 or on sale at $2), you will still receive 10 per cent of the recommended retail price set by the publisher.

If you are getting a royalty of 20 per cent net receipts, then you receive 20 per cent of whatever price the bookseller passes back to the publisher. Standard publisher discounts for bookshops range between 35 and 55 per cent, so this means you might be getting a lot less for a book sold at a big chain store than you would for a book sold through your local independent bookshop.

c) High discount royalty:

The royalty clause in your contract will probably include a lower royalty if the publisher has had to give a higher-than usual discount. This is not unreasonable, as the publisher is then earning less as well. It is standard for the normal royalty to be reduced by half or one third when a certain high discount is reached. However, be careful to make sure that the high discount does not start lower than about 55 per cent, as otherwise it would be reducing your royalty on standard bookshop discounts, not only in special circumstances.

d) Advance against royalties:

An advance payment (different from a ¯at fee payment) is recoupable against royalties, which means the publisher will keep all the author’s royalties until the advance has been earned back. Afterwards, any royalties due are paid to the author at regular intervals (usually every six or twelve months). A s a rough guide, the publisher should be willing to offer you an advance equal to half the royalty of first print run.

For example: If the author is going to get 10 per cent of RRP for a book priced at $20 (exclusive of G ST) with a first print run of 2,000 copies, if the whole print run were to sell through without any damaged or free copies, the author should receive $4,000. As there is always risk and uncertainty in publishing, you could expect the publisher to offer the author an advance of $2,000 before the book is published. The author’s royalties on the first 1,000 copies sold would be deducted from the $2,000 advance, but the royalties due on any copies sold after the first 1,000 would be payable to the author.

Rights

Copyright in a book can be split up in any number of variations, and can be licensed (or assigned) to any number of different people.

When the publisher licenses the rights, they are going to try to license as broadly as possible – all forms, editions, and languages throughout the world. This will give the publisher the best chance of exploiting all the possibilities in your book and recouping their investment. Before licensing all or some of your rights you should ask: a) what is the publisher going to dif they get these rights and b) what would I be able to do if I kept hold of these rights?

An Australian publisher is always going to want the rights to publish the book in the English language in Australia and (usually) New Zealand. If they also want World rights, or UK, Asia, or USA , or translation, then you need to know that they are going to be able to make use of these rights in a way that will help your book. A t the same time, there is no point holding on to World and translation rights if you have no way to make use of the rights yourself.

When the publisher licenses your book, they will want to use some rights directly themselves (eg to print copies and sell them in Australia), and sublicense some rights to other people (eg Korean translations). The rights that the publisher is able to sublicense are called subsidiary rights, and instead of getting a royalty like you would when the publisher directly sells a copy of your book, you will usually get a 50±90 per cent share of any subsidiary rights income received by the publisher. Some subsidiary rights include quotation rights, audio, UK or US sales, translations, and film.

Reversion clause

If you have licensed the rights to the publisher, the term of the contract is probably `duration of copyright’. This means the publisher could hold the rights for 70 years from the author’s death. It is important to have a reversion clause in the contract so that your copyright reverts back to you if the publisher is no longer selling the book or keeping it available for sale. With e-books now available, it means your book might always be available, so I recommend having a reversion clause that means the publisher has to sell a certain number of your book (eg 100 copies) in a 12 month period, or else the rights revert to you.

Things to watch out for

There are many things that should be included in a publishing contract to both protect the publisher and protect the author. A long with licenses, territories, rights, and royalties, there should also be some mention of delivery dates and what exactly is being delivered, what will happen if your manuscript isn’t quite what the publisher wanted, who will pay for any permission fees and cancellation if the publisher does not fulfill its obligations.

It is important for you, or someone you trust, to read every word of the contract you are signing. D o not make promises you cannot keep (ie delivery dates, warranty clauses) and do not sign anything that you do not understand. Essentially, anything that the publisher has promised you in arranging the publishing deal should be included in the contract. If the publisher has said that your print run will be 10,000 copies or that they will get your favourite artist to design the cover or that they will throw you a launch party at the Opera House, then make sure these are included in the contract. Seek independent advice if you do not understand the contract or need help with negotiation, but do not be worried about asking your publisher for an explanation of the terms.