The first time you hold an author’s contract (also called a publishing contract) in your hands (or rather, these days, look at it on your PC), you may be excited. We assume that it is a contract with a real publisher and not with a subsidy publisher. But disillusionment quickly sets in when you see all the rights that are supposed to be transferred to the publisher. Or you don’t see through the many different percentages in the remuneration regulations.
The following article is intended to shed some light on this. A short introduction to copyright law can be found here.
2. Subject matter of the contract
As a rule, the publisher has already seen the author’s intellectual output (in the form of a synopsis and reading sample) before offering him or her an author’s contract and therefore knows roughly what he or she is getting into. Nevertheless, a common concept is often established, in which a description of the book’s content can be found. This is usually referred to in the subject matter of the contract, which is legitimate, so that the concept becomes part of the publishing contract.
The expected scope and the expected retail price are also specified. The title is usually referred to here as a “working title”, i.e. it is of a provisional nature. A sole right of the publisher to decide on the final title is rather unusual at this point and should therefore be rejected. Rather, standard formulations are those according to which both sides will agree on a title later.
3. Obligations of the author
Sometimes an author’s contract stipulates that the publisher may make suggestions to the author regarding the content. This is okay in itself, as it is aimed at editing, which is basically to the author’s benefit. However, if the publisher requires the author to take these suggestions into account, then in my opinion this goes too far, even if this obligation is relativised with the addition of the words “where possible”. Good cooperation between publisher and author is characterised by the fact that the editor can convince the author to make changes and the publisher does not have to make use of a legal instrument of coercion that is in the publishing contract. Of course, the publisher can also refuse to publish the book if he or she is not happy with it, but then the author should give some fundamental thought to whether it would be better to end the cooperation altogether.
The author assures the publisher in the author’s contract that no third-party rights are infringed. Apart from plagiarism, this refers in particular to the personal rights of real people. The creative soul is at liberty to take certain character traits of a protagonist from reality. However, if this goes so far that someone is recognised by a third party in a novel character, the author commits a violation of rights. A famous example of this is the novel “Esra” by Maxim Biller. Its publication was prohibited by the Federal Court of Justice because the similarities between the characters and Maxim Biller’s former partner and her mother were too great. Later, the Federal Constitutional Court overturned the decision with regard to the mother, but upheld the ban with regard to the ex-lover, since the descriptions of the sexual life violated above all the sphere of intimacy.
Among the author’s duties, a so-called non-competition clause is sometimes found in the publishing contract. According to this, the author may not publish a book with another publisher for a certain period of time (two to three years) without the publisher’s consent. The prerequisite for this is that this (second book) would compete with the work covered by the contract (first book).
If you find such a clause in your author’s contract, the first thing to do is take a deep breath, because it means a massive restriction of freedom. Especially in fiction, it is possible that the follow-up novel is likely to compete with the predecessor (unless you change genre from romance to horror). It is true that such clauses state that the publisher may not withhold its consent “contrary to good faith”. But when is that the case? The formulation “contrary to good faith” is a so-called open legal concept that must be interpreted in each individual case. So no one can predict whether the publisher will have to give his consent later and, above all, whether he will actually give it if such an obligation exists. Thus, every author should think carefully about such a close alliance with his or her publisher. The amount of his or her share in the publisher’s proceeds and the amount of the advance are likely to play a role. In other words: If the publisher is prepared to invest significantly in the author, a non-compete agreement may be understandable and even acceptable in the end. In all other cases it is a matter of negotiation!
Incidentally, according to the judgement of the Hamburg Higher Regional Court of 19 September 2002 (Ref.: 3 U 175/00), a non-competition clause in an author’s contract is usually in the interests of the publisher in view of the economic risk involved and is therefore permissible.
4. Scope of work, delivery and correction
The scope of the work and the delivery dates should be clarified and acceptable to the author. It is customary to deliver part of the work in advance so that the publisher can get an idea of the progress of the work. If the author does not deliver the work on time and does not meet the deadline, the publisher is entitled to compensation. In any case, these claims for damages should be limited to the author’s fault.
The deadlines for proofreading should also be acceptable to the author (at least two weeks). It is important to differentiate between proofreading and editing, which involves revising the content of the text. If there is no provision for proofreading, it should be added.
The publication date of the book in the trade should be no later than six months after acceptance of the work. A period after which the publication date can be postponed by twelve months should be rejected. For example, three months would be acceptable.
5. Granting of rights
Now it’s time for the nitty-gritty of the author’s contract. This section often begins with the sentence “The author hereby grants the publisher the exclusive rights to exploit the work, unlimited in terms of territory, time and content, for all types of use.
If this wording is not changed, all the author’s exploitation rights are gone for the time being and until the copyright to the work expires. In other words, the author can never dispose of his work again (we will leave aside the rights of recall under the Copyright Act). Crass. So what to do? We split it up:
territorially unrestricted: if the publisher is large and has a worldwide distribution network (sub-publishers included), this may be acceptable. Otherwise: negotiate.
temporally unrestricted: Means, according to § 64 UrhG, until seventy years after the author’s death. So the author won’t live to see it, his children might and his grandchildren probably will. Therefore: negotiate again, ten to twenty years should be ok. Apart from that, the commercially relevant time span for exploiting the book is much shorter anyway.
unrestricted in terms of content: this wording should be deleted without replacement, as it deprives the author of the possibility to negotiate certain rights out of the contract.
In the case of filming rights, for example, the author should consider whether to transfer these to the publisher without restriction. Perhaps the author would like to have a say in the screenplay or influence the choice of director and actors. This is only possible if the rights still belong to him or if he has at least had a contractual right of co-determination guaranteed.
Merchandising rights should also not be transferred without restriction in the author’s contract, as they can interfere with the author’s moral rights, e.g. if the book title with the protagonist’s likeness adorns a soup packet. In general, the editing right can also be made dependent on the author’s consent.
In the case of many other rights, however, it makes sense to leave these to the publisher for exploitation.
6. Distribution of the work
Publishers do not want to be interfered with in the marketing and distribution of the book. Nevertheless, the author should at least have a say in the author’s contract. The design of the cover or the retail price can end up being just as important as the content.
It may also be possible to get the publisher to agree on the amount of the advertising budget and the planned measures (e.g. advertisements in daily newspapers, public publishing events, author presence at book fairs).
The publisher should inform the author of the amount of the respective print run in writing and without being asked. The same applies to the circumstance when the work is out of print. The author can be assured of a special right of cancellation in the event that the re-ordering of a print copy takes longer than 10 days. The same applies if the sale falls short of a minimum number of copies.
When it comes to fees, it’s the same as everywhere else in the creative industry: as a newcomer, you usually don’t get such a good deal (unless you are already known in the media from other contexts), while the established and successful author gets better conditions.
An overview of the conditions you can expect can be found here. Basically, it can be said that the usual participation for hardbacks ranges from 8 to 12 per cent. In the paperback segment, the usual participation is between 5 and 8 per cent, and for e-books between 25-30 per cent. It is also possible to increase the percentages when certain sales figures are reached, e.g. one percentage point from the 10,001st copy in the hardcover segment.
Just as important as the level of participation is the reference figure in the publishing contract. 10 per cent of the net proceeds is something completely different from 10 per cent of the net sales price. The net sales price is an objective figure that is naturally higher than the net proceeds. For example, manufacturing and shipping costs, agency commissions, taxes, third-party fees, etc. can be deducted from the net proceeds. An alternative would be to exclude certain deductions from the definition of net proceeds.
Clauses according to which the publisher only pays out royalties to the author when a certain number of sales is reached should also be rejected. The argument that one could not otherwise afford to publish the book is not convincing. A good publisher must set up his calculations in such a way that the business becomes profitable for him in the end without the author contributing to the costs.
The subject of advance payments: As an unknown author, it will be difficult to get hold of an advance. Of course, it strokes the artist’s soul if the publisher also expresses his conviction in the work in the form of an advance. On the other hand, one should not forget that it is only an advance that will be offset against the author’s later earnings. Under no circumstances, however, should the advance be repayable to the publisher if it is not covered by the revenues.
When regulating the settlement modalities, it is customary in the publishing agreement to grant the author the right to have the settlement documents checked by an external expert (e.g. tax consultant). If the audit shows that the publisher has settled to the author’s disadvantage, the author can claim compensation for the costs of the so-called audit according to the provisions of the contract. Most contracts only provide for this right if the discrepancy is 10 per cent or more to the author’s disadvantage. This percentage can also be tried to be negotiated downwards.
8. Store-price cancellation and maculation
It is advisable to include a precise number of copies in the publishing contract, which the publisher may cancel when the retail price is reached. Otherwise it can happen that you are surprised by this step on the part of the publisher or even see in the bookshop that your own book is on the junk table. One should also add an obligation on the part of the publisher to inform the author of an imminent or at least completed sale.
A special right of termination on the part of the author is possible in the event that book sales no longer reach a significant number of copies.
Some publishing contracts contain provisions on options. According to these, the publisher can oblige the author to offer his next work exclusively to the publisher for exploitation for a certain period (24 to 36 months). The author is thus prevented from looking for another publisher during this period. Sometimes he receives an option fee as a “consolation”, but this is usually not significant in terms of the amount.
The author should think carefully about whether he wants to enter into such a commitment and whether the publisher is worth it. On the other hand, the publisher’s side is also understandable. If he invests in the marketing of a book, the fruits may only pay off with the subsequent work. However, if this is published by a different publisher, you get nothing out of it.
If you have questions about the author’s contract or other topics, I will be happy to advise you. It is not necessary for you to come to my office for this. You can send me your concerns in advance by email (also with attachments). I will then make you a non-binding offer for a mandate and, if necessary, contact you by telephone. A mandate only comes into effect when the mandate is issued in writing.