Common Book Publishing Terms Every Author Should Know

It is very exciting when you’ve gone through hours of labour expressing your thoughts in writing and a publisher gives its nod of approval by offering you a publishing deal. Nothing is more rewarding for a writer who wants to wear the badge of “published author.” Sadly, as with many other creatives, some writers fail to look at the fine details of their publishing contracts before they sign on. For some writers, all will be well in Blueberry Hill but for others, ignorance of the details of their publishing contract can cause future pain.

Every contract is different. Every contract should be carefully studied. My standard refrain is, when a contract is put in front of you, it is always a good idea to have a lawyer review it to ensure that you understand your obligations under the contract and that your interests are adequately protected. In situations where you have little bargaining power, you may be forced to accept the other party’s standard terms. When you are faced with a take-it-or-leave-it scenario, you should seek the advice of a legal adviser knowledgeable in the area of business before you accept, sign, and bind yourself to the contract. Nevertheless, there are some common book publishing contract terms every author should know and look out for in their publishing agreement.

Traditionally, the publishing equation is thus: an author writes a manuscript, a publisher invests in packaging, producing, and selling a book from the manuscript; from the sales of the book, the publisher earns a return on their investment and the author earns royalties. Underlying this equation is the licensing of rights from the author to the publisher. The aim of the publishing agreement is to set out terms that are mutually beneficial to the author and the publisher. One that achieves a balance between the author’s control of their copyright and the publisher’s business interest, which is primarily to make a return on their investment.

There are three things that authors must consider in deciding the scope of rights to be granted to the publisher:

1. The ability of the publisher to effectively exploit the rights that they are granted;
2. The necessity of releasing other rights to protect the publisher’s primary publishing interest; and
3. The financial investment of the publisher (including any advance to the author) in relation to the rights the publisher is seeking to control.

So here are some common book publishing contract terms to pay close attention to when considering your publishing contract.

Scope of Rights Granted

The copyright holder of a literary work has the exclusive right to exploit the work for commercial gain including reproducing the work in any material form; publishing the work; performing the work; creating adaptations of the work for film, television, theatre, or radio; and creating products or merchandise based on the work. 

The primary focus of a book publishing contract is the publishing right in the work. The author may choose to license all of the other rights (also known as the subsidiary rights) in the work to the publisher or limit the rights to only those required for the publishing of a book and/or eBook and/or Audio Book in the English language or in all languages. 

The publishers will require an exclusive license to protect their investment. This simply means that no other person can deal with the rights in the work that are covered by the publisher’s license.

Territory

The agreement can limit the territories within which the publishers can exercise the rights granted to them exclusively, those which are non-exclusive, and those which are excluded entirely. The agreement can include or exclude geographic areas but authors must carefully negotiate, define, and set out the areas that are included. 

When negotiating the territory, consider the publisher’s ability to effectively exploit the work in those territories. You must consider whether the publisher has the resources on its own or through its partners to exploit the work outside of its main market. If not, it is wiser to limit the territory to the area(s) where the publisher has a strong presence. Your faith in the publisher’s ability to exploit the work will determine whether you grant a worldwide license or limit the territory to Nigeria, or Anglophone West Africa, or the entire Africa, or Africa and Europe, etc. You may also grant an exclusive license in one territory and a non-exclusive license in others. It will all depend on the publisher and their proven ability to effectively represent the book in the territories granted. A publisher with a small operation in a little corner of town with no national or foreign affiliates is likely unequipped to hold exclusive worldwide publishing rights for your book.

Royalties

Publishers pay authors royalties representing a percentage of the recommended retail price of the book. The royalties rates may differ for different forms of the book and sales from different territories. For example, the royalties on hardback copies may be higher than the royalties on paperback copies. The royalties on eBooks and audiobooks may also be different. Furthermore, the royalties on copies sold for export may also be set at a different rate.

Royalty rates will differ but there tend to be standard ranges in every market. If you are not sure whether you are being offered a good royalty rate, you should ask other authors or author/book associations to ascertain what the standard royalty range in your market is.

Advance Payments and Accounting

Some publishing agreements include an advance payment. An advance payment is a signing bonus paid to the author before the book is published. The advance is usually paid against all future earnings that are due under the agreement. This means that your book must earn in excess of the advance before you start receiving any additional royalty payments. The author must have a clear understanding of how earnings will be accounted for and when payments will be made. You should also know how frequently you will receive a statement of sales from the publisher and what will be included in the statement.

Option on Future Work

Often referred to as the right of first refusal, the option on future work deals with the publisher’s interest in future works by the author. It gives the publisher the first and exclusive opportunity to read the new work and sets a time limit for them to decide whether they want to publish it. It can also state in advance on what terms they will publish, for example, it could be on the same terms as those covered in the Agreement. The option clause can cover the author’s ‘next full-length work’, or ‘next two full-length works’, or ‘next work in the same series as the Work’, etc. Where the option is for more than one work, then the agreement may include words that release the author from offering further works to the publisher if they refuse the first work.

Termination and Reversion

The duration of copyright is the life of the author plus 70 years and some established publishers expect to acquire a license for the entire duration of the copyright. Care should be taken to include termination provisions to allow the reversion (return) of rights to the author. There are several options for achieving this. The agreement can be terminated for breach of any of the material terms and failure to remedy the breach. Termination can also be based on a minimum sales agreement such that where the number of copies available for sale falls below an agreed number and the publisher fails to re-issue or reprint the work within an agreed time period, the agreement is terminated and the rights revert to the author. 

Your publishing agreement will include other provisions. These are just some of the common book publishing terms that every author should know. Every publishing contract is different as publishing companies deal on terms that suit their business interests. It is your responsibility to understand the fine details in the agreement before committing to them with your signature.