More is better in crafting publishing rights contracts: The more rights that a contract covers the more revenue streams it makes available for publishers.

In order to maximize the value of the relationship and to ensure optimal profits, the parties negotiating contracts must speak the same language with a mutually clear definition of terms. To that end, the Book Industry Study Group’s (www.bisg.org) Rights Committee (co-chaired by MetaComet’s own David Marlin) has recently released a draft of its Controlled Rights Vocabulary, a standardized set of terminology that can be applied to any rights transaction or contract. Based on existing standards when possible, the vocabulary is comprehensive yet flexible enough to adapt to marketplace changes, and it applies to all areas of the publishing industry and all common book rights transactions. The model divides rights into separate components such as content, format, market, sales channel, duration, payment terms, limitations, and other useful segments.

Improving communication between publishers, authors, and agents with a standardized vocabulary is one step toward crafting better contracts. But realizing the full benefits of contracts requires a robust royalty accounting system. This system will allow you to quickly and efficiently search your database for standardized terms to determine exactly which rights are covered and how they can be used.

Take for example a children’s book author and illustrator who creates a popular book. If the contract specifically addresses rights for other mediums–television, film, online video, audiobooks, merchandising, and e-books, among others–the publisher is prepared to shop the book creatively and quickly react to incoming offers. Say the publisher is approached by a merchandiser interested in putting the book’s characters on a T-shirt or a cable TV network is looking to produce a cartoon version of the book. Including these rights in the original contract is of course necessary to profit from such opportunities. But the ability to efficiently search the contract to ensure that such rights are covered is also necessary, which is precisely what a strong royalty accounting system and/or rights management software should provide.

An important caveat to acquiring rights is that they are only as good as a publisher’s ability to monetize them.  An author or agent may be more amenable to handing over additional rights if they have some flexibility to get them back should the publisher not adequately promote them.  This new concept is being pioneered by Cursor, a company with a publishing arm called Red Lemonade. Red Lemonade is a community-driven platform that merges social media and publishing, essentially calling upon a community of readers to help determine which books will be published and in what formats. The company allows authors to earn money from digital downloads, print editions, limited artisanal editions, revenue sharing programs, user fees, or other formats suggested by those participating with the website. Red Lemonade offers another unusual feature: dramatically shortened contract durations. Rather than the standard “life of copyright” contract that gives publishers control of an author’s work until it is released to the public domain (long after the author has died), Red Lemonade offers three year contracts with an option to renew annually.

Creating high quality content is the best way to cut through the media clutter. Engaging work helps authors build an audience as well as gain the attention of other mediums interested in licensing their work. But a comprehensive contract, combined with a flexible royalty management system, provides authors and publishers with the strongest foundation for success and profit.

Opportunities exist for English-language publishers to expand into profitable and growing markets around the world. While this certainly includes the European Union and its large English-speaking population, increasingly it is customers across Asia most interested in English titles, especially in e-book form. Publishers with robust rights and royalty management will be poised to take advantage of this booming overseas demand for both new and backlist titles alike.

Setting up royalty software and rights management systems is the first step towards pursuing and profiting from customers around the world looking for English-language e-books. To venture into this realm profitably, you need to have quick and easy access to your available rights, and to ensure that you are collecting revenues and properly distributing royalties.  Even if you’re not focused on overseas markets right now, having the flexibility to move quickly is paramount. Now is the time to ensure that your publishing contracts include global distribution rights and electronic rights, and that your rights management software is sound.

For publishers of various sizes, e-books offer advantages over printed books when it comes to international markets. For instance, e-books are not subject to the same distribution challenges associated with getting physical books into bookstores. Plus, digitizing your content makes it easier and less expensive to translate it to other languages as compared to translating and reprinting physical copies, thus increasing licensing opportunities.

China in particular is a huge market for English-language e-books because the country doesn’t have ready access to many translated books, yet it boasts a population increasingly fluent in English as a second language.

India is another market with a promising potential for English language e-books: English is widely spoken and taught in many schools; there is a demand for English titles across multiple genres; and there is limited access to printed books in English.

These large markets in China and India bring with them their own popular tastes and needs. While a limited number of English-language bestsellers are available in translation in both countries, many popular titles are not–and the quality of the local translations is an entirely separate issue. The rise of the middle class in China and India has produced an increased interest in literature from both their own countries and from around the world. And where an appreciation for literature was once largely confined to the upper educated classes of India and China, cultural literacy has entered the mainstream in these two most populous nations on earth.

Augmenting this general rise in reading is the demand for e-books on technical subjects in the realms of medicine, general science, computer science, business, and other specialized genres. These types of books are usually not translated, in either physical or e-book form, so readers expect to read them in English already. This also opens up the potential to digitize and license your backlist titles covering these topics.

Children’s e-books written in English are another segment of the industry poised for growth, and not just in Asia. The number of available e-book titles for young children, tweens, and teens is growing, though not at the rate of books for adults. However, as more young people begin using e-book readers and other digital tablets at home and at school it is reasonable to expect children’s e-books to rise in popularity in the coming years. Plus, the ability of e-books to incorporate video and other enhanced content is of particular interest to the young reader demographic which could also cause e-book readership to increase.

In this digital world overseas markets and customers are closer than ever. Being equipped with the best possible rights and royalty management system will help you reach them wherever they may be while ensuring that both you and your authors are maximizing profits through efficient licensing and collection capabilities. This new profitability requires both knowing what rights you have available and ensuring that you collect on your licensed content – the core function of a rights management solution.

The following press release from the Association of American Publishers highlights what we believe is the value of quality, curated content, and the related importance of having robust rights management software and tools.

Press Release from Association of American Publishers
Tuesday, 09 August 2011 | Andi Sporkin

“BookStats” Also Examines Trends in Print and Digital Formats,
Sales Distribution Channels

New York, NY and Washington, DC; August 9, 2011 — BookStats, the deepest, most comprehensive statistical survey ever conducted of the modern U.S. publishing industry — capturing its size, scope, revenue and rapid strategic expansion across multiplatform content and sales distribution channels — is being released today.

Spanning 2008-2010, BookStats offers data and analysis of the total industry and the individual Trade, K-12 School, Higher Education, Professional and Scholarly markets. Produced jointly by the Association of American Publishers and the Book Industry Study Group, its highlights include:

Overall U.S. publishing revenues are growing

Publishers’ net sales revenue has grown annually; 2010’s $27.94 Billion is a 5.6% increase over 2008.

Overall U.S. publishing unit sales are up as well

Publishers’ 2.57 Billion net units sold in 2010 represent a 4.1% increase since 2008.

Americans, young and old, are reading actively in all print and digital formats

2010 total net sales revenue in the consumer-focused Trade market is $13.94 Billion, increasing 5.8% since 2008 (and excluding 2011’s e-book sales surge). Both Adult Fiction and Juvenile (non-fiction and fiction) have seen consistent annual gains.

Education publishing holds steady and, in some segments, shows solid growth

Higher Education’s $4.5 Billion net sales revenue for 2010 represents a significant 23.1% increase over 2008. K-12 School, the industry’s second largest category by net sales dollar volume, reached $5.5 Billion revenue in 2010.

Professional and Scholarly publishing shows gains

The Professional market’s $3.7 Billion net sales revenue was +6.3% over 2008. Scholarly publishing experienced 4.7% growth since 2008, with $191 Million net sales revenue for 2010.

“The BookStats study indicates that the publishing industry is healthy and growing during a time of unprecedented change,” said Dominique Raccah, Founder and CEO, Sourcebooks and Chair of the BookStats Committee. “Publishers in every sector of our business have made significant investments in content and technology to better serve their audiences’ needs and those efforts seem to correlate with the results we’re seeing.”

BookStats examines the industry from three distinct angles: by publishing categories, publishing formats and sales distribution channels.

More highlights about overall publishing

More highlights about publishing categories including breakdowns of fiction and non-fiction

More highlights about publishing formats including hardcover, paperback, e-books, internet and bundled products and services

More highlights about distribution channels including physical and online retail, independents, export sales, wholesalers/jobbers and institutional sales

BookStats’ methodology includes source data from nearly 2000 publishers, additional databases and resources. How BookStats was built

The complete BookStats survey is available for purchase along with a supplemental online dashboard enabling customization of the data. How to purchase BookStats

AAP is the national trade association representing 300 premier U.S. publishers of high-quality entertainment, education, professional and scholarly content, produced using the most current technology, reaching the world. For more information, visit www.publishers.org BISG is the leading U.S. book trade association for standardized best practices, research and education about publishing; its membership includes publishers, retailers, manufacturers, distributors, wholesalers and librarians. For more information, visit www.bisg.org

Media contact:
Andi Sporkin, AAP — asporkin@publishers.org and 202-220-4554

BookStats purchasing contacts:
Tina Jordan, AAP — tjordan@publishers.org and 212-255-0275
Angela Bole, BISG — angela@bisg.org and 646-336-7141

As you may have heard and experienced, selling books is tougher than ever these days. But it’s not all grim news. The silver lining is that this challenging atmosphere is also creating new opportunities. The proliferation of apps, ebooks, online readers, and related Web-based outlets is opening up new avenues for revenue sharing through permission and licensing opportunities. The key is getting your royalty management and rights management in order first.

Be prepared for this new world and you’re more likely to prosper. If moving whole books, whether hardcover or paperback, is slowing down, consider seeking audiences for chapters, specific pages, or similarly segmented digital content. For example, if you’re in the business of publishing how-to manuals or similar instructional books seek out websites that focus on your area of expertise and offer to license them blocks of content. The website might find creating regular, valuable content to be too time consuming for them to handle and would welcome the chance to take this out of house, as long as the price is right. Again, make sure your licensing is secure and your royalty accounting software sound before you begin reaching out and you’ll be ready for business. And keep in mind that each licensing situation is unique. You don’t have to rely solely on standard licenses. Sometimes they are just a great way to begin a negotiation.

As you venture into new formats you will likely experience a greater volume of transactions at smaller price points, so make sure your royalty software is working for you as things get more complicated. And without proper rights management systems and processes in place revenue, both present and future, will be lost. But here’s more good news: once your royalty software and rights management systems are running and scalable, you can begin finding new audiences and selling to them immediately.

Here’s an example: once you digitize your content it becomes much easier and less expensive to translate it to other languages as compared to translating and reprinting physical copies; hence, more potential markets and more licensing opportunities. By reducing the burden of licensing, and using dependable rights management software, you increase business.

The global demand for digital content also opens up your backlist to new licensing opportunities as well. If parts of printed books in your list are outdated you can digitize just those chapters or sections that are still relevant and find them a new audience as part of an ebook, interactive website, or other online source.

A secondary, but not insignificant, byproduct of seeking out new audiences is the benefits it will have for your publishing brand. By bolstering your reputation as a forward-thinking publisher or content collector, content creators will come looking to you to benefit from your prowess. Once you’ve proven that you can increase the reach and scope of their audience, you become an asset.

The writing is on the wall (or more likely the screen)–the publishing world is in the midst of seismic change. By getting your content digitized, licensed, and ready to sell and having robust rights and royalty management, you can spend your valuable time and resources pursuing new audiences and customers rather than chasing the pack.

On May 5th 2011, Mike Shatzkin, David Marlin and Heather Reid presented findings from a rights management survey conducted through the auspices of BISG, managed by IdeaLogical, and sponsored by CCC.

Following is the presentation:

Rights Mgmt MIP Presentation 05-05-11