Monday, December 3, 2012

Liz's Lair: What To Look Out For in Contracts

Today, there was supposed to be a guest blogger--actually a trio of them--but that didn't work out, so you're stuck with me again. Fortunately for you, I attended my RWA chapter's December breakfast meeting on Saturday, and I am full of new stuff to tell you.

Kristin Nelson from the Nelson Literary Agency was our guest, and boy did she have a lot to tell us. I had the privilege of sitting with her, and she is just as gracious and fun as she is smart and savvy. Anyway, she talked about the changing landscape of the publishing industry. Since so many of us are publishing on our own with smaller presses, I found her advice on contracts very informative. Even though I have the world's greatest agent who spends a potload of time rewriting contracts to make them the best they can be for her clients, I am still glad I heard what she had to say so I can share it with you guys.

First of all, she told us that romance is leading the charts in sales at 14.3%--no big surprise to those of us writing it--and that 26% of the romance sales are digital. Again, no big surprise. To break that down, those sales came from Amazon at 25%, other e-sales sites at 19%, book clubs at 11%, Barnes and Noble at 11%, and only 4% from Barnes and

About the Random Penguin merger--she said it will mean fewer opportunities for debut authors as they combine lines at the two houses. Crap! As if getting published wasn't hard enough. And she mentioned the upswing of digital first imprint publishers who only do print runs if a book is selling really well as an e-book.
As far as these kind of contracts go, she said to think of it as you NEVER getting your rights back since they will always be available online.

Kristin went on to explain something to watch for when you are faced with a contract and have no one like Christine to be your bulldog in negotiations. Three different phrases mean a big difference when you sign.

World Rights -- publishers would love to have all these.
World English--means all the English-speaking martket (Australia, New Zealand, etc.)
North American--the US and Canada

The more rights you can keep, the better you are.

She got into the difference between Agency Model versus wholesale which is the basis for the DOJ lawsuit against the big 6 and Apple. In a nutshell, the wholesale model allowed Amazon (and anyone else) to buy a book at 50% off and then sell it for less. Why would they want to do that, you ask? Think about it. How many kindles do you think Amazon sells when people know they can download books at that kind of discount? Yes, they lose money on those sales, but they make a fortune off all the Fires they sell. The Agency Model is kind of like price-setting. On all my books, for example, there is a disclaimer on Amazon that says the price is set by the publisher (Penguin who has not settled the lawsuit yet.) In other words, they are not allowed to discount any of my books because of the Agency Model.

Then Kristin got into a really important area of contract negotiations that every author should be aware of, especially since it is so hard to get an agent these days and a lot of you are doing your own contracts.

The OPTION clause. This gives the publisher first dibs on your next book.

Wait! Your next book??? You read it right. So many of you out there have probably signed a contract with this language without realizing what it really means. As written, if you publish romantic suspense, ANY other story you have has to go through them first, even that non fiction you have under the bed. And that's not all. Some of the contracts even say you are required to submit a FULL manuscript and they have up to a year to decide. So, let's see. You've written an entire manuscript and have waited almost a year only to have them pass on it. See how that clause works? It's not in your best interest to sign something that reads this vague. Pinpoint it. Make them say they have first dibs on your next romantic suspense in the SERIES only and even then--only give them a proposal to make their decision.

No wonder they want you to sign that. They now have all the power.

And another one to watch for is the non-compete clause which basically says you can't write anything else that might compete with the published  work or that might hinder the sales in any way.

That, my friend, is why I am walking away from a NY house and an editor that I love. We couldn't get them to reword this clause, and now that I write for Midnight Ink and self publish, I can't live with the broadness of that language. It's too big of a risk in today's litigious society. It could easily be said that my straight mysteries with sex and bad language might hinder the sales of my G rated cozies, and before you know it, I'm being sued.

Don't laugh. It has  already happened where an author signed a contract and then self pubbed something the publisher had already passed on. When her editor (Penguin) freaked out and demanded that she take it down off Amazon, she refused. They reacted by cancelling her contract and then asking for the advance back. When she said no way, they sued her. You can read about it here.

So, I guess the moral of the story is--if at all possible, get a literary attorney to have a look at your contract before signing anything. If not, do your homework before signing on the dotted line. And even if you have a great agent like I do, it is always smart to be aware of what she is negotioting in your behalf.

Now on to the fun stuff--we continue the countdown for MURDER FOR THE HALIBUT.

29 More Days.

I'd love to hear your comments on this blog. I'll start off the countdown by giving away one free autographed copy of the book to one lucky commenter. All I ask in return is an honest review. So start talking!!


Heather said...

Liz- thanks for sharing this info. I don't know if I'll ever be in a position to need it, but it's always fascinating to learn how these processes work!
So excited for Murder for the Halibut!


Good stuff, Liz. Missed you!

Anonymous said...

erry Smith
Liz, I don't know that I will ever write. However, I really appreciate the info. in this article! You have to have an army of attorneys just to keep control of what YOU created. What a world we live in. Thanks again!

Anonymous said...

* Sherry Smith
My computer is dying....sorry!

Susie R said...

This is very interesting. In the last few months I have really made an effort to reach out and learn more about the authors I have bben reading. In doing this I have learned a lot about how the world of publishing has changed and how many of the authors are now spending as much time marketing themselves as they do writing!

Pauline Frisone said...

It is very interesting indeed. Looking forward to murder for the halibut.

jodipollack said...

Love your books Aunt Liz!! Can't wait for the next one!

Liz Lipperman said...

Heather, that is so true. And thanks for the nice words about Halibut.
Maybe you'll win one today!!

Liz Lipperman said...

Vicki, I missed you, too, Saturday.
Hope you had fun wherever you were.

Liz Lipperman said...

Hey, Sherry, I had no idea you had a desire to write. And yes, publishing is changing by the second these days. By the time you get a book written, it will be all different. Sigh!!

Liz Lipperman said...

Susie, you have no idea how much time we have to spend promoting. I once drove over a hundred miles to a library booksigning and sold 4 books. And the time spent on Facebook and Twitter really cuts into the writing time. I think I have pretty much established that I am undisciplined, so I really get bombarded.

that said, I hope I'm one of those authors you enjoy!!

Liz Lipperman said...

Hey, Pauline, thanks for your comment. Fingers crossed for you with

Liz Lipperman said...

Ah, Jodi, you are so sweet, and I love you dearly. Miss you, too. Can't wait for the reunion this summer.

old woman said...

As someone who is beginning to think that my little nanowrimo novel "might just" be good enough, I appreciate the information.

And, of course, look forward to "Halibut" on New Year's Day.

thanks so much--


A. J. Pompano said...

Liz, thanks for a very informative post. I would have never thought of some of those points. I can see why having an experienced agent is important.
P.S. We missed you at Crime Bake.

Dale T. Phillips said...

Liz, you're right about the contracts. Long-time writer Kristine Kathryn Rusch has been preaching this for some time, providing real-life examples. Check out her blog for the business side of writing. Essentially, some authors want to get published by a big house, so they'll sign anything. But later on, they discover the problems. Thanks for passing on the info to help writers.

Liz Lipperman said...

Old woman, (snicker!!) I love it that you are pleased with your Nano finished product. But even though you have a law degree, you should find a literary attorney WHEN you sell it.

And I love that you are such a cheerleader!!

Liz Lipperman said...

Ah, Ang, I missed being at Crime Bake this year, too, but I had to make a choice. Malice domestic won out. Are you going?

As for the contract stuff, you would be surprised at all the things Christine has to fight for with the boilerplates. EVERY contract is heavily swayed in the publisher's favor.

Liz Lipperman said...

Dale, I love her blog and do read it. As for NY houses, they are becoming less attractive not only for the low advances, but also because of the way they do business sometimes. I love both my publisher and my editor, but unless I am assured I can write for anyone else whatever I want to write, there will be no more contract signing for me.

Liz Lipperman said...

And the winner of the copy of MURDER FOR THE HALIBUT as picked by is A. J. Pompano. I'll be contacting you, Ang, for your snail mail address. Congrats.

And sending a big thanks to all of you who commented. There are so many blogs out there to read, and I appreciate that you picked mine today.

A. J. Pompano said...

Wow, that’s great! Thanks, Liz. I’m looking forward to reading and writing a review for MURDER FOR THE HALIBUT.