Author Archives: Susan Spann

Don’t Get Caught in the Royalty Net

By Susan Spann

My last guest post here at the RMFW blog took an overview look at publishing rights, with a focus on the “Big Four” – Exclusivity, Geography, Translation, and Formats.

Today, we’re taking a look at royalties - specifically, at royalty calculation and the contract language which bases an author’s royalties on “gross” or “net” sales proceeds.

Royalties are the money an author receives from a publisher on sales of the author’s work.

The amount of the royalty usually varies by format, with typical percentages averaging 9-10% on hardcover sales, 8-9% on trade paperbacks, 5-6% on mass market (sometimes also called “rack sized”) paperbacks, and 25% on ebooks.*

Many contracts also contain “escalation clauses,” which increase the percentages once sales pass a stated numerical threshold.

When the author receives an advance, the publisher pays the author a lump-sum payment (sometimes in several installments) which is credited against the royalties due on future sales. When authors receive an advance, the author receives no royalty checks until the author’s royalties on actual sales (less returns) exceeds the advance amount. 

At first glance, royalty calculation seems pretty simple: sales price multiplied by the royalty percentage equals royalty due … right?

Not exactly. You need to read (and understand) the fine print in your contract.

Publishing contracts calculate royalties in one of two ways:

Gross royalty calculation (sometimes phrased as calculation on “list price” or “price received”) means the author’s share of sales is based on amounts the publisher receives, with no deductions (except for returns, severe discount sales, and review copies, as well as a couple of other standard situations where royalties are never–or almost never–due). A gross royalty clause calls for calculation of the author’s royalties based on the publisher’s list price or the money the publisher receives on sales, without deductions for publishing costs or other costs incurred by the publisher. This is the best form of royalty for the author, and the one an author should try to insist on.

Net royalty calculation means that the author’s share of royalties is based on some amount less than what the publisher actually receives. The contract language will use the word “net” or specify that the publisher can deduct certain sums or expenses from the sales proceeds before calculating the author’s share. In cases where the publisher insists on net royalty calculation, the author must insist that the contract specify exactly what expenses the publisher can (and cannot) deduct before calculating the royalties due to the author. Unspecified “net royalty” clauses are dangerous for the author, because the publisher can reduce receipts (and therefore the author’s royalties) by deducting all kinds of costs that the publisher should normally bear.

Remember: in traditional publishing situations, the publisher–and the publisher alone–bears the costs of producing, distributing, and marketing the books. The author does not and should not share those costs.

The language to watch for reads: “Publisher will pay Author X% of Publisher’s net receipts (or net profits) on sales of the Work.”

Paraphrases of this language are equally bad.

When a contract uses the word “net,” or allows the publisher to deduct sums other than taxes and shipping added to the purchase price (meaning taxes and shipping paid by the purchaser over and above the price of the books) authors should, at a minimum, be wary. If changing the contract to gross royalties isn’t an option, and the author still wants to go through with the deal (there are reasons to make such a choice, but only after consultation with a trusted agent or attorney) the author must ensure that “net” is thoroughly and specifically defined and that publisher deductions are based upon “actual, documented” costs – not estimates or undocumented “costs.”

Not all net royalty contracts represent blatant attempts to defraud the author – some reputable publishers do use them – but authors must be very careful about agreeing to royalties based on net, and should never do so without professional advice.

One final word about the term “net” – in recent months, I’ve seen a couple of publishers’ contracts which use the word “net” but define the term in a way that actually represents a gross royalty calculation. Unless you’re well-versed in publishing legalese, you might not be able to tell the difference.

The best way to ensure your rights are properly protected? Find an agent or an attorney you trust and never sign a contract without professional review and advice.

*(Note: these numbers hold if you’re published by a New York publishing house. Digital-only presses, POD publishers, and small independent houses may (and usually do) vary.)

Have questions about this or other publishing legal issues? Please feel free to ask in the comments – I’m glad to help!

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 Susan Spann is a publishing attorney and author from Sacramento, California. Her debut mystery novel, CLAWS OF THE CAT (Minotaur Books, July 2013), is the first in a series featuring ninja detective Hiro Hattori. The sequel, BLADE OF THE SAMURAI, will release on July 15, 2014. Susan blogs about writing, publishing law and seahorses at http://www.SusanSpann.com. Find her on Twitter @SusanSpann or on Facebook.

 

Do You Know Your (Publishing) Rights?

By Susan Spann

The grant of rights to the publisher is among the most important (and trickiest) terms in a publishing contract. Although the paragraph itself is seldom long, it’s often connected to several others, not all of which are obvious during an initial read.

Regardless of the length or complexity of the terms, it’s critical for authors to understand the rights the contract grants to the publishing house.

The most expansive (and most commonly requested) rights provision grants the publisher “exclusive, worldwide rights to publication and distribution in all languages and in forms and formats now known and hereafter developed.”

Although short, the quote above contains the four primary factors authors need to consider in any grant of rights:

1. Exclusivity. Rights granted “exclusively” to the publisher cannot be granted to or utilized by anyone else (including the author) for the duration of the contract (which normally lasts for the term of copyright in the work, unless termination language in the agreement gives other options). It’s normal (and not abusive) for publishers to want exclusivity. The publisher is investing time and money in your work, and deserves to profit from that effort (as do you!). Just make sure the publisher has the resources to exploit the rights granted in the contract. A small, U.S. only publisher may not need exclusive worldwide rights. Exclusive North American (or U.S.) rights may suffice. Then again, it’s difficult to publish ebooks effectively without the right to sell them on the Internet, and Internet sales often cross borders.

2. Geographical Reach. Since the publisher will normally want exclusivity within its territory, pay attention to the manner in which that territory is described. Options include “worldwide” (formerly “throughout the universe”) or any lesser territorial boundaries the parties agree upon. U.S. rights are different than North American rights – so pay attention and be sure to ask if you have any question about the geographic and territorial descriptions in the contract.

3. Languages. The contract should specify what languages the publisher’s rights include. Contracts which merely state “exclusive, worldwide rights” are generally deemed to include all languages. If you intend to grant only English-language rights, the contract must say so. If the publisher wants a more extensive grant of language rights, be sure the publisher has the capacity to translate accurately and distribute in those markets. A poor translation is sometimes worse than no translation at all. On the other hand, you shouldn’t refuse foreign language rights to a publisher with a proven track record and the capacity to translate and market your work abroad.

4. Forms and Formats. Most publishers will request “all forms and formats”  – author, BEWARE. Does this include film, TV, and gaming too? It shouldn’t. Those rights aren’t tied to a publisher’s right to publish the book in print and ebook formats. Make sure your publisher has the capacity to act on all of the formats you grant, and that you don’t give away formats the publisher doesn’t need or deserve. It makes little sense to grant print rights to an e-only publisher – and is equally nonsensical to refuse e-book rights to a major brick and mortar house. Be aware that “all forms and formats” now includes mobile devices and potentially also app, gaming, TV, film, merchandising, and many more. A specific carveout is required if you want to retain those rights.

There are other factors that merit additional consideration, too, and which may appear less commonly in publishing deals. These can include film and TV rights, editing, the use of outside “co-authors” and/or editors, and several other issues. These often take a back seat to the “big four” we discussed today, but they remain important, and we’ll take a look at a few of them next week.

The “right” clause depends on many factors – there is no “one size fits all” – so be vigilant and pay attention, and make the right business decision for you and your book.

Today’s big take-away lesson is this: pay attention to the grant of rights, and know what rights you’re agreeing to give your publisher. A proper grant of rights lays the foundation for a positive, long-term business relationship between the author and the publisher – and that, of course, is good for everyone.

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 Susan Spann is a publishing attorney and author from Sacramento, California. Her debut mystery novel, CLAWS OF THE CAT (Minotaur Books, July 2013), is the first in a series featuring ninja detective Hiro Hattori. The sequel, BLADE OF THE SAMURAI, will release on July 15, 2014. Susan blogs about writing, publishing law and seahorses at http://www.SusanSpann.com. Find her on Twitter @SusanSpann or on Facebook.

Examining the Elephant: Publishing Contracts, Part 1

By Susan Spann

Autumn has arrived, and it’s time to turn the monthly “legalese” column from thoughts on pitching to talk of publishing deals.

My legal practice focuses on publishing contracts, so it makes some sense to focus on the “terms and conditions” part of the publishing process here. In the months to come, we’ll talk about everything from negotiations to contract pitfalls (and if you have questions, please ask them – I’m glad to help!)

Today, we’re starting with a macro view of the contract: what is it, and why do you need one?

The many new publishing options have changed the “face” of contracts a little. Ask a self-published author about the “contract” and some will say “I haven’t got one, I use Amazon” (or CreateSpace, or Smashwords, or something else entirely) – but the reality is that every published novel has a contract. Sometimes that contract comes in a form that’s titled “Terms of Use” but that’s a contract, nonetheless.

The wide variety of contracts and terms puts me in mind of the old joke about three blind men examining an elephant. The one who felt the tail said “the elephant looks like a rope,” while the ones who examined the trunk and legs compared the beast to a snake and a tree (respectively). Authors with different kinds of contracts may see a different side of the publishing deal, but one thing unifies them all: every publishing deal involves a contract of some kind.

So, What is a Contract, Anyway?

If I offer to publish the books of everyone who reads this blog for a year, is that a contract? If I promise to publish your book because you read this single entry, is that a contract? If I promise to publish “the first good manuscript I read” – is that a contract?

Would it matter if we pinkie-swear? If I offered you money? If I published in electronic formats only?

The answer requires looking at the law.

Many people think of contracts as “agreements” or “promises” to do or not to do something. (Note that the law considers corporations and other forms of businesses to be “persons” who can enter into binding contracts as long as right biological person signs the contract on the company’s behalf.)

By law, a contract is “an agreement which creates legally enforceable obligations.” In plain English, a contract is an agreement you can force the other person to comply with, by means of a lawsuit if necessary.

People make all kinds of promises and agreements which are not contracts because the law refuses to recognize the promises as enforceable. An unenforceable agreement isn’t illegal but it creates no remedies – meaning the injured party has no recourse if the other party won’t perform.

The key, then, is knowing whether your contract is enforceable or merely an “illlusory” promise where the other party won’t have to follow through if he changes his mind.

Generally speaking, a valid, enforceable contract requires five things: an offer, an acceptance, consideration (which has more to do with money than with kindness), proper parties, and appropriate subject matter. 

That’s a lot to take in at once, but let’s break it down a little:

THE OFFER usually needs to be made in writing – either by terms of service or in a written contract created for the author. It needs to describe the terms of the deal in sufficient detail for the parties (and a court) to understand what’s actually being offered and what the terms of the deal will include. Beware: if something isn’t in the writing, it isn’t part of the offer or the deal.

THE ACCEPTANCE occurs when the author signs the contract or clicks “I accept” or “I agree” on a website’s terms of service

CONSIDERATION means “something of value given in return for the parties entering into the contract.” In the case of a publishing deal, this usually means (a) for the publisher, acquiring the rights to publish a work, and (b) for the author, publication and the promise of royalties on sales of the work.

PROPER PARTIES means people (or companies) with the legal authority to enter into the contract. Minors can’t form valid contracts (a parent or guardian has to sign on a minor’s behalf) and authors who enter a publishing deal have to own the rights to the work in question.

APPROPRIATE SUBJECT MATTER basically means the contract can’t be an arrangement to perform an illegal act (like a murder) or otherwise contain illegal terms (like selling the author into. Generally speaking, a contract to publish a book is considered “appropriate subject matter.” Also, be careful: a contract with bad terms (even oppressively bad ones) doesn’t become “inappropriate subject matter” – the general rule is that you can make as good a deal, or as bad a deal, as you are able. Subject matter questions are generally limited to whether the contract involves a promise to break the law. If not, it’s usually acceptable.
You’ll notice the things I didn’t mention. A contract doesn’t have to involve the exchange of money. It doesn’t have to be “fair.” it doesn’t have to promise certain things or guarantee the author money, success, or even publication (Surprise! Read the fine print!)

Makes your head spin, doesn’t it?

Before this series is through we’ll discuss all the elements of a contract, how to make an agreement legal, and how to protect your rights through the contract process.

For the moment, though, we’ll leave it here.

Did you know the elements of a valid contract? Do any of them surprise you?

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Susan Spann is a transactional attorney and former law school professor whose practice focuses on business and publishing law. Her debut Shinobi mystery, Claws of the Cat (Minotaur Books) released on July 16, 2013. You can find Susan online at http://www.susanspann.com, or on Twitter @SusanSpann, where she created the #PubLaw hashtag to provide business and legal information for authors.

Pitch Like a Pro (Part 2)

By Susan Spann

Last month, we took a look at the four vital elements of a winning “elevator pitch.” This week, we’re putting the elements together - just in time for Colorado Gold!

To play along, you’ll need a list with your novel’s protagonist, active antagonist, stakes, and high concept. (Remember: high concept might or might not make it into your pitch, but you need to keep it in mind throughout the process.)

It’s easier to see a pitch in motion when you’re actually seeing it thrown, so I’ll use my novel, Claws of the Cat, as our pitch example today. I’m using it mostly because the pitch worked as intended–it found me an agent, piqued an editor’s interest, and (in a slightly expanded form) ended up on the dust jacket of the completed novel. In other words: I know this one works, and when you need an example it’s nice to have a functional one at hand.

The original pitch:

When a samurai is brutally murdered in a Kyoto teahouse, a master ninja has just three days to find the killer in order to save the life of the Jesuit priest that the ninja has pledged his own life to protect.

(Note: Yes, this is rough. I’m sharing my original pitch to show you this can be done fairly quickly and doesn’t have to be absolutely perfect to do its job.)

Can you spot the four critical elements?

1. Protagonist: Here, a master ninja. Always lead with your protagonist, and use an archetype instead of the character’s name. Archetypes are more descriptive and harder to forget. Also, they give information about the novel that names alone cannot convey. Would you rather hear that “Sam” has to go find “Charlotte” or that “an undead barber” must locate “the kitten he left behind”?

Good pitches put the protagonist front and center. The listener must have no doubt who your book is about.

2. (Active) Antagonist: The pitch must tell us who or what the protagonist is fighting. (And It’s OK to imply the antagonist, as long as the stakes are high enough.)

Ask yourself: what’s the easiest way to describe what my hero is fighting? That’s your active antagonist, and you have to either state it outright or strongly imply it in your pitch.

Note: The active antagonist is NOT the various bells and whistles, twists and turns, hot dogs and lack of doughnuts that plague your antagonist along the way. Those are window dressing (even if they seem important) and don’t belong in the pitch. Big hero, big villain, big stakes get the job done here.

3. The Stakes: In Claws, the stakes are a ticking clock and the imminent execution of an innocent man, both of which appear in the pitch. Secondary stakes appear there too: the ninja has pledged his life to protect the priest – so if the ninja fails, he’s going to share the Jesuit’s fate.

Your pitch MUST explain what’s at stake in your novel. Fail at that, and the listener will not care. Stories require tension; tension requires stakes. In many ways, the stakes are the most important part of your pitch, because only the stakes make the listener need to hear the rest of the story.

4. High Concept: In my case? “Ninja detective.” However, you’ll notice my pitch never says those words. The pitch as a whole makes the concept clear.

The little details of your pitch convey high concept. “Master ninja,” and “find the killer” give a ninja detective vibe. “Kyoto teahouse” sets the novel in Japan, and suggests there’s a geisha or two in the mix.

Find the unique details in your novel. Wedge them into the spaces between your protagonist, your antagonist, and your stakes.

Every word in your pitch must add something to the whole. You don’t have room for filler words that do not “earn their keep.”

Try to use no more than one adjective per noun. Try not to use adverbs – they break the flow.

From your elements, build one sentence that describes your story in one breath’s worth of words.

If you can’t say your pitch in a single breath, cut it until you can. Then–and only then–revise until that sentence rolls off your tongue as easily as your name.

Don’t over-rehearse, but make sure the pitch is smooth and easy to say, because it’s easy enough to trip over simple phrases when you’re stressed, to say nothing of overcomplicated prose.

A single sentence is easier to remember, flows off the tongue, and inspires the listener to start asking questions–exactly what a good pitch ought to do.

Pull the four elements from your work and build your pitch. Build it strong and polish it to a shine–and then get out there and pitch with confidence!

Thank you for joining me here this week – I look forward to seeing many of you at Colorado Gold!

Bio: Susan Spann is a transactional attorney and former law school professor whose practice focuses on business and publishing law. Her debut Shinobi mystery, Claws of the Cat (Minotaur Books) released on July 16, 2013. You can find Susan online at http://www.susanspann.com, or on Twitter @SusanSpann, where she created the #PubLaw hashtag to provide business and legal information for authors.

Knock Your Pitch Out of the Park!

By Susan Spann

Since I’m doctoring pitches one-on-one at the Colorado Gold Conference in September, it seemed natural to start my posting here on the RMFW blog by looking at pitch construction.

I’ve got two guest posts between now and Colorado Gold, so here’s Part 1 of a 2-part series on “How to Build a Winning Pitch Pitch”

Now, there are many ways to construct a pitch, and I don’t claim my way is the only one. It is, however, the one I used when pitching my debut Shinobi mystery, CLAWS OF THE CAT, and the one I use when helping other people pitch.

Winning pitches do one thing: they make a listener want to read your book.

Always keep that goal in mind. If your pitch does not intrigue, it fails, regardless of its contents. You start constructing a pitch by culling four elements from your work. We’ll look at those elements today and then, on September 19, we’ll put them together (just in time for the RMFW Conference!).

1. Who is the protagonist? Describe him (or her) with 1-2 adjectives.

For example: a ninja detective.

2. Who is your active antagonist?

The active antagonist is the person, place, or thing the hero is fighting against for most of the novelthe thing that creates “the stakes.” This might or might not be the same as the antagonist the hero ultimately defeats or reveals, especially in a mystery novel, because unlike a synopsis, the elevator pitch does not reveal the ending of the story.

3. Stakes! (Preferably, through the protagonist’s heart).

Note that I haven’t asked about where the hero started the journey, how many quirky talking teapots (s)he meets along the way, or why there’s a pregnant emu at the turn from Act 2 to Act 3. For purposes of your pitch, none of that is important.

Having trouble with stakes? Try to answer the question: What does your protagonist have to accomplish before “the end,” and why will the world fall apart if he or she fails?

Answer it in one sentence or less. If you can’t, you might need to revisit your plot.

In my novel, the stakes are clear: a ninja detective must find a killer in three days time, or the ninja, his Jesuit friend, and a lovely young geisha will die. In addition, the death of the priest will plunge Japan into war with Portugal.

Those are stakes.

Stakes can be personal (death, financial ruin, homelessness, exile) or large-scale (war, natural disaster, the end of the world). Many novels feature both. A novel without stakes is boring, and a pitch which doesn’t reveal the stakes won’t pique a listener’s interest.

Which brings us to the fourth and final element of the pitch:

4. High Concept.

High concept is premise. It’s what makes your story unique. In a nutshell, “high concept” is a concept with mass appeal that you can sum up in one sentence or less.

The high concept for my mystery series is ninja detective. The high Concept for the movie JAWS is “killer shark.”

Your high concept might not appear in your pitch, but creating the pitch with high concept in mind will always result in a stronger pitch than one which ignores high concept.

Struggling with high concept? Try the “What if” method: summarize your story in no more than 15 words, the first two of which must be “What if?”

Between now and my next guest post on September 19, your homework is to pull these four elements out of YOUR work and get ready to pitch like a pro! Then, tune in for our second installment, in which we discuss transforming your elements into a winning pitch.

Do you have an elevator pitch for your work in progress? Does it utilize all four of these critical elements?

Bio: Susan Spann is a transactional attorney and former law school professor whose practice focuses on business and publishing law. Her debut Shinobi mystery, Claws of the Cat (Minotaur Books) released on July 16, 2013. You can find Susan online at http://www.susanspann.com, or on Twitter @SusanSpann, where she created the #PubLaw hashtag to provide business and legal information for authors.