Just a standard contract

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Alex Adsett
15 March 2014
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Alex Adsett

I often have authors approach me for publishing contract advice with the almost sheepish disclaimer “this looks pretty standard”, with the usual follow up, “so it will probably be alright”.

I always want to ask, “how do you know?”, and unless you are an author who has done their research or published before, do not just trust that every publisher will send a contract that complies with industry norms. Even if the publisher tells you it is a standard contract, they (a) might be fibbing, but also (b) might be wrong. Just because it is perhaps that publisher’s everyday contract, does not mean it is in accordance with the broad industry standards that authors should expect to receive.

I am not blaming the publishers (except the fibbing ones) as many operate within their own bubble, and even if they wanted to, government regulations frown on any commercial competitors getting together to set commercial terms. So here are some of the key “standards” that are broadly accepted as the base commercial terms across the Australian publishing industry, and what every author should know before negotiating their publishing contract:

  • 10% RRP print royalty. It is standard for the publisher to pay 10% royalty based on recommended retail price (Note: RRP is very different to net receipts) on all print editions (including the subsequent paperback edition that will go on to backlist for decades).
  • 25% net receipts royalties for ebooks from traditionl publishers. Traditional publishers (ie. those who publish print first and ebook) pay a lower ebook royalty than the digital publishers.
  • 40%-50% net receipts royalties for ebooks from digital-first publishers.Digital-only (or digital-first) imprints pay a higher royalty of 40% to 50% of net receipts.
  • High discount clause. It is standard to reduce the author’s royalty if very high discounts need to be offered to promote booksales, but very high discounts are defined as 55% or higher (and usually at least 61%), and never below 55%.
  • Home royalties.Royalties on sales in New Zealand should be paid at the same rate as Australian sales, and for American publishers, Canadian royalties should be paid at the same rate as the US sales.
  • Splitting print and digital rights.Digital-publishers should not acquire print rights if they are not planning on exploiting them, and print-publishers should not acquire digital rights if they are not going to do an ebook edition. Many digital-only imprints acquire an option on print rights instead of acquiring the print rights as well, or agree to revert the print rights if not published within two years of first publication of the ebook.
  • Subsidiary rights.Any subsidiary rights sale for translation or overseas editions should be split 75% to the author and 25% to the publisher. Most other subsidiary rights can be split 50/50, but never less than 50%.
  • Film rights.Unless the publisher has a firm film strategy, it is standard to allow the author to retain film, television and merchandising rights. If the publisher does acquire these rights, the author should receive at least 80% of any film sale.

And, because there are a lot of sharks out there, I want to add a warning not to automatically trust anyone who tries to say that they are a new and exciting kind of publisher, who will “only” charge you $XXX to publish. Any company charging an author money to publish, automatically moves the publishing dynamic from making a living from book sales, to making a living from the author. Authors need to do careful research before handing over any upfront “contributory” payments to a pay-to-publish company.

About Alex Adsett

Alex is a publishing consultant and literary agent who offers commercial contract advice to authors and publishers, including for print, digital, film and self-publishing contracts. She also represents select genre authors as a more traditional agent. Find out more on her website.