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.