Navigating the Confusing World of Rights and Royalties

Understand what rights you are selling and read the fine print on a contract.

Understand what rights you are selling and read the fine print on a contract.

Today I promised to share about rights and royalties. Right here in the first paragraph is my disclaimer: I am no expert. So, do your research before signing on the dotted line. Rights and royalties can be a bit confusing so hang in there. Publishing rights cover a multitude of art forms from music lyrics to artwork to e-books. Obviously, because this is a blog about writing, I will be focusing on writer’s publishing rights. So let’s begin.

All rights: After publication you may not resell your manuscript. This may seem reasonable at first blush. Read the fine print carefully. All rights can also cover your article appearing on the web or used in an anthology or portion used in other publications. Ask yourself if you are comfortable surrendering all rights for the price offered.

I had the experience back in the 80s of accepting an all rights contract for radio scripts I wrote for a ministry. They turned them into to narratives and these stories are still circulating today. I was thrilled to get my name out there and was naive regarding payment. So, at the time I was content. Now, however, I would be less likely to take a contract like this unless my goal is strictly building writing creds. We all need writing creds.

All rights on a book can include the novel itself, movie, international, e-book and audio rights. Be sure you have an agent or a contract lawyer look over the terms of the contract before signing. They know what to ask to protect your work and get you the best deal for future residual income.

First rights: You are offering the publication the first option to publish your work. First rights means the rights revert back to the author to resubmit it to another periodical. The publisher may have a clause in the contract instructing you to wait a specific time period before submitting it elsewhere.

Reprint rights: This is the resubmitted piece I mention in the first rights definition. There is no limit to the number of times you can sell reprint rights. Be sure to indicate this is a reprint in your query letter and where it appeared. Some publishers will not take reprints and unpleasant problems arise if you fail to mention this.

E-book rights: Although most book publishers are including these rights in the initial contract asking for all rights, some are not. If you retain the e-book rights, you can self-publish the same book as an e-book yourself or sell the e-book rights to another publisher. I’m sure you can see why most publishers keep those rights. You can also publish a backlist title in e-book. A backlist title is a book you already published, perhaps now out-of-print and the rights have been returned to you.

Movie-rights: This is a fun one. Movie rights can mean nothing in a contract if your novel is never optioned for a movie. But if it is—be sure you have an agent ready to negotiate those rights. By the way, optioning for movie rights is not the same as a contract for making a movie. It means I’ll pay you a little something to hang onto the idea of making your book into a movie. They hang onto the option for a few years until they decide to do it or circular file the idea.

How does a book author get paid?

There are three ways a writer can be paid for their book.

  1. Flat fee: a set amount of money paid on contract signing that you get to keep. The amount doesn’t change no matter if the book is a best seller or a flop.
  2. Royalties: a small amount paid to you for every book sold
  3. Advance against royalties: Money paid to you on signing a contract with a promise of more royalties should the book do well. They have a standard based on marketing research on what those sales numbers would be.

Advance against royalties is the most desirable. Here’s how that works. If the target is 20,000 (This a number I pulled out of the air) you will not receive a royalty check until after 20,001 books are sold.

Many small publishers only pay royalties. There is no advance, you receive royalties starting with book one. Royalties are usually paid semi-annually or annually. Some publishers may pay more often.

There have been a few sad occasions when publishers have demanded their advance back if a book sells poorly. Again, an agent or lawyer would catch those points and probably negotiate a better deal.

If your book never sells beyond the publisher’s established minimum expectations you will never see royalties.

What are residuals?

Residuals are continuous payments for your work. As long as your book is selling. These can come from international sales (books translated into other languages for example.)

Seek Legal help if you don’t understand your rights in a contract.

The key to insuring you don’t get tripped up over royalties, advances and rights is to have an agent. Unless you are a contract lawyer or an agent, don’t negotiate the contract on your own. Agents will be able to wade through the pages of information and point out areas of concern. Smaller manuscripts such as articles have smaller contracts you can usually understand without a lawyer. But then again, as I mentioned earlier, I had to consult a lawyer.

I know it is hard, but don’t be in such a hurry to get a contract for publication that you sign on the dotted line without paying close attention. Another example: a script that is purchased on spec can be tied up for years. At the end of that time it may never be produced.

The greeting card contract I signed took two years for the publisher to decide whether to use my verses. After two years they returned them to me. That was two years I couldn’t submit my work elsewhere.

I am learning to weigh which rights I am truly comfortable giving to publishers on any given project. I am more agreeable to small or no compensation from start-up publications than from well-established ones with a readership in the thousands especially if they sell advertising. If they want all rights that is a deal breaker.

Educate yourself as much as you can and seek advice from others more experienced. Again I place my disclaimer here: I am no expert.

So go forth, submit, and decide which rights are right for you.

Do you have anything else to add regarding royalties and rights? I’d like to hear your thoughts.

 

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