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STATEMENT OF PRINCIPLES ON CONTRACTS
BETWEEN WRITERS AND ELECTRONIC BOOK PUBLISHERS
by the National Writers Union
Produced by Philip Mattera
Book publishing is at the threshold of a new era. An industry
that for hundreds of years has put ink on paper is now delivering
more and more of its wares in the form of floppy diskettes and
multimedia CD-ROMs; some publishers are also beginning to
distribute books via on-line networks. Although the electronic
book publishing industry is young and still very much in flux, it
is not too early to try to establish some standards for the
writer-publisher relationship in this field. This document
represents an attempt by a major writers' organization to come up
with some general principles that we hope will be adopted in
contracts between writers and electronic publishers, primarily
for works distributed in disc form.
These principles address the four main types of projects writers
and electronic publishers would enter into: ones in which the
author of a print work who holds electronic rights licenses them
to an electronic publisher; ones involving original electronic
projects centered on a writer's text; ones centered on the work
of numerous writers or other creators; and ones in which the
writer's work plays a secondary role in an original electronic
project dominated by other content such as music or video.
In all four categories the writer's traditional role is altered.
Electronic books, by their nature, involve elements beyond the
stringing together of words. The skills of programmers, computer-
graphic designers, musicians, videographers and others are also
required. Creating a book almost invariably becomes a
collaborative effort, in some cases as complicated as that
involved in making a film. Figuring out how to participate in the
new nature of authorship will be a challenge for every writer who
wants to become involved in electronic publishing.
It will also be a challenge for publishers. If electronic
publishing is going to thrive, it will need the diversity and
talent of the most creative members of the writing community.
Setting fair standards will be essential in encouraging writers
to make the leap from print to the digital world.
I. COPYRIGHT. In print publishing most writers are accustomed to
holding the copyright on the books they write. It is only under
certain circumstances (textbooks, reference works, etc.) that
authors may be put in a work-for-hire position, i.e. one in which
the copyright vests with the publisher or other commissioning
party.
There is no reason why the principle of authors retaining their
copyright should not be extended to the electronic realm. In
cases where a print work is adapted to electronic form or an
original electronic work is centered on a writer's work, there
should be no question but that the writer would retain the
copyright on the text portion of the work while licensing it to
the publisher. Where there are numerous writers, each would hold
the copyright on his or her text. Separate copyrights could exist
for the user interface, retrieval software or additional
multimedia elements inserted in the work.
The matter is more complicated when the writer's contribution to
a multimedia work is less predominant, e.g. a CD-ROM mostly made
up of electronic photographs or video clips, with the text
limited to simple captions. In the case of such electronic coffee
table books it might not be unreasonable for a writer to be
brought in on a work-for-hire basis on the premise that the
writing is a contribution to a collective work. However, if the
writing is more extensive and has to be closely coordinated with
the producers of the other creative content, it might make sense
for writers and the other creators (who may be acting in a
partnership) to hold joint copyright in the entire content.
II. GRANT OF RIGHTS. The publishing rights granted by a copyright
holder to a publisher typically cover three main issues: the
geographical scope of the rights, the formats in which the rights
can be exercised, and the duration of those rights.
Electronic book publishers typically want the right to distribute
the work throughout the world, and some want rights in all
possible formats. Whether the author wants to grant such sweeping
rights should be a matter of negotiation, in which a broader
grant of rights should be reflected in the size of the advance
and the royalty rates.
One important principle that should characterize all deals, is
that publishers, after some reasonable amount of time, forfeit
rights for any formats they have not exploited. The practice of
sitting on rights should be discouraged.
In addition, given the rapidly changing nature of electronic
publishing, there should--unlike the practice in print
publishing--be a time limit even on rights that are exploited. An
author should not be tied indefinitely to a publisher that may
not be adequately promoting or distributing the work or is
failing to keep up with changes in technology.
III. CREATIVE CONTROL. It is customary in most print book
contracts for the author to have ultimate creative control over
the content of the work--except for the publisher's right to
ensure that the work conforms with some generally accepted
standards of style, spelling, grammar, etc. and that the book is
not obscene, libelous or an infringement on someone's copyright.
Most publishers will assert greater control over matters such as
cover design and jacket copy, but often authors will have the
right of approval in these areas.
A similar degree of author's creative control should extend to
electronic publishing. Texts should not be altered in any
significant way without the consent of the author, who should
also be consulted on the packaging of the disc.
Where there are substantial multimedia elements in the work, the
issue of creative control is more complicated. Some electronic
publishers may say that, in the same way that print publishers
generally don't consult with authors on what typeface will be
used, they should have exclusive control over issues such as user
interface. This is a mistake. A successful multimedia work is one
in which interface, images and sound are in harmony with the
text. The best approach is for creative control to be a
collective matter, involving publisher, writer and contributors
of other creative content, rather than the hierarchical approach
used, for example, in the film industry.
Indeed, under the Berne Convention and federal law, moral rights
protection is much stronger for visually-based works than it is
for text. The rights of integrity and paternity will become
increasingly relevant for multimedia works.
IV. "MANUSCRIPT" ACCEPTANCE. One of the major sources of friction
between print authors and publishers is the issue of manuscript
acceptability for books that are contracted on the basis of a
proposal rather than a finished work. A substantial number of
such works are deemed unsatisfactory when they are delivered a
year or more later, and the publisher seeks the return of the
advance, which the author invariably has long ago spent. Writers'
groups charge that many of these rejections are for reasons that
have nothing to do with the quality of the work--that the real
explanation is that the original editor has left, or the house
has been taken over and the new owner doesn't like the project,
or the house has simply changed its mind.
It's too early to tell whether electronic publishers will adopt
these same practices. What would be better is for the industry to
regard advances as an investment that entails a certain risk. If
by the time the author delivers the text the publisher has for
whatever reason changed its mind about the project, or if the
writer has made a good faith effort but has produced something
unsatisfactory, then the project should be cancelled and the
advance written off as a business loss.
If the publisher feels the writer has not made a serious effort
to fulfill the contract, the publisher should file an arbitration
claim (see item X below).
V. ROYALTIES. The electronic book publishing industry is still
too young to have the kind of more-or-less standard rates seen in
the print world. For the time being, rates will be negotiated on
a case-by-case basis. However, royalty rates should be higher for
electronic books on discs than for print books to reflect the
lower costs of production and the fact that the full income
potential after cost recovery is unknown, and, at the very least,
should be fairly divided and accounted so that authors may share
in any long-term financial success of the product.
Royalty rates should be even higher in situations such as
network distribution of electronic books or "CD-ROM on Demand" kiosks, in
which production costs may be negligible.
There is one practice, however, that should be adopted widely
from the start: that of paying royalties based on the list price
of the work rather than the net. The experience of print
publishing is that where royalties are paid on net (mostly small
presses or reference works), there is simply too much potential
for abuse on the part of the publisher. Authors tend to be
suspicious of the mysterious figures that appear on royalty
statements and often feel ripped off when they realize what a
small percentage of the list price they are receiving.
It is true, however, that for some electronic publishers, a
substantial portion of their sales come from discs that are
supplied to hardware manufacturers to bundle with their CD-ROM
drives or multimedia kits. Electronic publishers argue that they
could not possibly afford to pay list-price royalties on these
copies, which are sold at huge discounts.
This issue can be addressed by adopting the print publishing
practice of paying lower and/or net royalties on those specific
copies that are sold outside of normal trade channels. (In the
case of electronic books, normal trade channels would include
computer and software stores as well as book stores).
VI. ROYALTY STATEMENTS. Royalty statements are the bane of print
authors. Most of them are indecipherable documents that seem to
conceal more than they reveal. Some print publishers, however,
have begun to revamp their statements to provide more detailed
data (though this sometimes makes them less rather than more
intelligible).
Given the sophistication of new technology, electronic publishers
should follow the best practices of the print industry. Royalty
statements should include complete information on the number of
copies produced, shipped, returned, and remaining in stock.
Authors should be in a position to know when their work is close
to being out of stock or out of "print."
Electronic publishers should avoid the antiquated practices of
print publishers, in which it typically takes 90 or 120 days
after the end of the semi-annual accounting period before the
publisher supplies the author with the royalty statement and a
check for any monies owed. In an industry producing works for use
on computers, it would be only appropriate to follow a time frame
more appropriate to the computer age. There is no reason why
accounts should not be settled within 30 days of the close of the
royalty period. Following the practices of many other businesses,
publishers should pay a penalty of 3-4 per cent for each month a
royalty payment is delayed.
VII. TERMINATION. Print book contracts typically provide for the
termination of the grant of rights if the publisher does one of
several things: fails to publish the book within a reasonable
amount of time, fails to pay royalties, or allows the work to go out of
print.
All of these provisions should be adopted in electronic book
contracts. Yet the concept of "out of print" has to be re-thought
in the electronic era, when small quantities or even single
copies of a work can be reproduced easily and cheaply. The real
criterion for whether a publisher can retain rights is whether
the work is still being actively marketed.
The sensible procedure would be to require the electronic
publisher to notify the author when it has decided that it no
longer makes sense to make even minimal efforts to promote the
work. At that time the work would be deemed "out of promotion,"
and the rights would revert to the author, who may choose to
purchase all or some of the remaining copies at a big discount.
VIII. OPTION. The option clause common in print book contracts is
a holdover from a time when the author-publisher relationship was
more like a marriage rather than the one-night stands prevalent
today. The clauses are ultimately unenforceable (in legal or
practical terms) and serve mainly to inconvenience the author.
They have no place in electronic book contracts.
IX. NON-COMPETITION. Another controversial provision in print
book contracts is the clause that bars the author from publishing
another work that the publisher thinks would directly compete
with its edition. Some non-competition clauses are written so
broadly that they could undermine an author's writing career.
If non-competition clauses are going to be used at all for
electronic books, they should be written as narrowly as possible,
i.e. they should only bar the publication of another work on the
exact same subject using the same materials, and for a specific
time period that is essential for the success of the original
work. In addition, such clauses should not inhibit the right of
the author to publish the same material in formats the rights to
which have not been granted to the publisher.
X. ARBITRATION. The cost and time involved in filing a lawsuit
often prevents print authors from challenging contract violations
on the part of their publishers. Arbitration helps to level the
playing field by making cheaper and speedier justice possible.
Electronic publishers should acknowledge the fairness of
arbitration and make it a standard feature of their contracts
with authors.
XI. AFFORDABILITY & ACCESS. Although issues of pricing and
affordability of books have not traditionally been addressed in
print book contracts, these are matters that should be of concern
to both writers and publishers in the electronic book industry.
As electronic books begin to replace printed ones, discs should
not be priced so high that they are affordable only to a small,
relatively affluent portion of the population. As various forms
of electronic publishing reduce the cost per unit of
manufacturing and delivering book-length works, a share of those cost
savings should be passed on to consumers in the form of
lower prices. Electronic books, like their print counterparts,
will become an essential component of civilization, so they
should be as accessible as possible to everyone. Lower prices
will also help to make electronic book publishing into the mass
market ultimately needed for economic viability.
Lower prices alone will not ensure universal access. Many people
cannot afford even the computers and CD-ROM drives needed to read
electronic books. The electronic book publishing industry, in
partnership with writers and other creators, should take steps to
expand free access to their products through libraries and other
non-profit institutions.
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For more information, email Philip Mattera: slope@panix.com