Your e-book publishing contract

Your e-book publishing contract

Your e-book publishing contract
Having sent off a manuscript to several e-book publishers, knowing that sooner or later one will offer a contract, our trusting author smiles with satisfaction when an email fronts up with an attached sample contract. Yes! Instead of opening the gates of success, our author may very well be staring at a raging fire stoked by a gleeful publisher. The warmth our author feels is not a sign of welcome, but one of agonies to come.

Like many writers, our author believes that publishers are there to push his or her book on the marketplace, advertise and promote him, and help their writing career. That may have been true some time ago, and it is still true if you happen to be a famous writer handled by one of the major traditional publishing houses. Unfortunately, those days are gone, and traditional publishers are not keen to take on unknown writers without agent representation, which is another game altogether. Read my article on How to Play the Literary Agent Game. It can be frustrating and disheartening. E-book publishers have stepped in to fill this gap and give writers a reachable outlet. This is good, but when dealing with any publisher, our trusting writer must read the fine print or risk those agonies.

Every writer needs to understand the publisher’s business model, any publisher, if he or she is to weather the contract process: Publishers are there to make money for themselves, not the author.

Okay, before our author gets into the contract itself, he should carefully read the publisher’s email, as it can contain vital information affecting the offer. Some emails might be straightforward, telling the author how pleased the publisher is to have him on board. Others may have disclaimers, telling the author that the offered contract and its terms are not negotiable. Such a statement should always act as a red flag. Everything is negotiable, and publishers know this. They are playing the psychology game with the eager author, trying to frighten him into accepting the contract on their terms rather than risk losing the offer to publish. If the email has such a clause, the author should not walk away, but keep it at the back of his mind.

Now comes the real challenge; going through the contract. Our author must not only understand what the clauses say and mean, but what he can and should negotiate, amend, or reject outright. Once this process is done and the author returns the revised contract, if the publisher refuses to accept changes or baulks at some changes, our trusting author must be prepared to walk away without hesitation. To accept a contract on publisher’s terms will result in those agonies I mentioned.

Almost every e-book publishing contract has a standard format which our trusting author will become familiar with after he changes publishers during his writing career, if he stays with e-book publishers and doesn’t take the self-publishing route. If new to the game, some contract clauses can be somewhat intimidating, especially if sprinkled with legalese.

Grant of Publishing Rights
This is usually the first clause, and is an opportunity for the publisher to grab as many rights from the author as possible. To avoid this gaping chasm, our author must keep focused on one thing: he is entering into a contract with a publisher to sell his book in e-book format and its variants, such as epub, mobi, etc, and possibly Print on Demand (POD). Nothing else!

If the publisher offers to produce the book in POD, the contract must state when both book formats will be released. The POD version may be released after, but the contract must state a specific timeframe, such as three months after release of the e-book. Not longer! It is critical that this clause contains the timeframe when the e-book will be released after contract signature. Again, not longer than four months. Some authors can wait 12 months or more before they see their book released. Walk away if the publisher is not willing to accept a strict deadline. Not meeting this timeframe are grounds for terminating the agreement.

If the contract states that the e-book will be released in audio format, this must be subject to a separate clause under subsidiary rights, which may cover:

– Abridgement, condensation, or digest releases
– Movie rights
– Anthology
– Book clubs or similar organizations
– Second serial and syndication rights

Better still, the author would be wise to remove all references to subsidiary rights. Should his book become so successful that a third party becomes interested, subsidiary rights can be negotiated in a separate contract.

Never assign or grant copyright of your book to anyone!

Author’s Warranty
This generally states the author guarantees the submitted work is original, is not subject to any copyright restrictions, or is not a plagiarized work.

Manuscript
This clause and its sub-clauses deal with the publisher’s right to edit the submitted manuscript. That’s okay, and is normal industry practice. This clause should have an entry allowing the author to provide his own cover art. If the contract doesn’t say so, put it there.

Royalties
This clause and its sections can be deadly, and is a major trap for unwary authors. This is where the publisher gets clever and can create a really bad day for our author. The section can be in two parts: e-book and POD royalties. With e-book royalties, the author’s eyes might light up when he sees he’ll be getting a 40% or even 50% royalties on all sales. Most of the time a publisher will offer 30% — a scandalous amount! If the royalty percentage spot is blank, it could be an invitation to negotiate, or there is an alligator pit there. If the publisher cannot offer at least 40%, the author should walk away.

Our author must know something important. This percentage refers to sales made from the publisher’s own website. Moreover, the author will receive 40% of NET earnings, NOT 40% of the book price! So many writers get caught here. Of course, most sales will be through third party outlets like Amazon, and they pay much less than 40% back to the publisher. They also want a cut of the pie the author has created.

What the author should ask for is a fixed percentage of the book’s list price—e-book and POD. That way, no matter where the book is sold, he will know exactly how much he is getting. Otherwise, the author might end up with 75 cents for a POD book that sells for $13.99! One thing our author must keep in mind: apart from initial formatting of the e-book and the POD version, the publisher has no ongoing expenses. If a publisher is not prepared to pay royalties as a fixed percentage of book price, walk away. An author should always keep in mind that an e-book publisher will sell hardly anything through their own website!

Terms of Contract
This is another clause where a publisher can trap our unwary author. Most publishers offer a 24 month term, but some go as far as five years! I would always recommend 24 months as the longest contract period, preferably only 12 months. The publishing world is changing rapidly and a writer should never get locked into a lengthy contract term.

If this section does not have an ‘out’ clause where the author can terminate the agreement, one must be included. Most publishers will resist having such a clause, locking you into the stated term, citing tear-jerking reasons like they are making a commitment to you and you need to commit to them. Wording of such a clause can be:

In case of an irreconcilable dispute between Publisher and Author, either party can terminate this agreement with a thirty (30) day written notice by e-mail with no obligation or liability to the Author.

Indemnity
Another clause where the publisher can exact a terrible price from the author, however unlikely the possibility. Remote or not, the author must guard himself here. A standard sucker clause may read like this:

If a judgment is obtained against Publisher for usurping rights still controlled by a Publisher or an entity other than the Publisher or the Author, the Author agrees to hold the Publisher harmless and to indemnify the Publisher for damages and costs. If Publisher prevails against a suing party or resolves the matter by an out of court settlement, the Author will be liable to indemnify the Publisher for defense and settlement cost.

Our trusting author must reword this immediately to say that both parties will hold each other harmless and free from any liability or costs. Better still, have the clause deleted altogether.

Publisher Obligations
This clause lists what they will do for the author. Check out these hooks:

– Publisher shall have the right to produce, advertise, promote…
– Publisher will distribute the book where the Publisher deems appropriate…
– Publisher may advertise anywhere the Publisher deems appropriate…
– The Publisher, at its sole discretion, may provide promotional copies…
– Author agrees to promote both his book and his Publisher to the best of his abilities…

What does all this mean? Apart from posting a book on their website, offering it to Amazon, Barns&Noble, and perhaps Smashwords, the publisher is not obligated to do anything for the author! These days, marketing and name branding is left solely in the hands of all writers.

Subsequent Works
This is a clause where the publisher insists on the right of first refusal for any new book the author may create. This may sound good as the publisher appears to guarantee publication of the new book. However, I would recommend deleting this clause. Refusal or acceptance could take a long time! Any new book the author writes should be submitted to the publisher on its own merits.

An e-book publishing contract has other clauses that deal with how royalty payments are made, advertising, author commitments, getting ISBN numbers, and others. Most of these are standard and don’t present a trap. However, each clause must be scrutinized closely to ensure absence of traps.

In conclusion, realizing how little an e-book publisher actually delivers for the author, leaving the author to do all the hard work and getting the short end of the royalty stick, self-publishing is an avenue well worth considering, and the stigma that used to surround self-publishing is fast disappearing.

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