I have a question for you/your blog regarding first rights and turning a published short story into a novel. My short story has not been published yet, and in the end I’d rather have it as a novel than a short story. That being said, if I send the short version out to literary magazines now, do I run into trouble with rights when, on the chance that it does get published, I later query agents with the novel version? I realize this is a “what-if” question, but I would hate to make a rookie mistake, discovering that I never should have sent the short story out if I had grander plans for it, etc.
One of the HUGE problems with the increased transparency in publishing is that a lot of terms get thrown around by people who really don't understand what they mean. Case in point: "first rights"
There's really no such thing because first needs to describe some form of a publishing agreement. First serial? First electronic? First print?
What you're asking is whether a short story can later be republished as part of a novel. The answer is "maybe" and a lot depends on the contract you sign for the short story. You don't want to sign a contract that gives anyone the right to post the story online forever. (The publication clause should have an expiry date for the exclusivity period, or a way for you to recapture your rights after a certain length of time)
The second thing this depends on is the offer from the publisher on the novel. You MUST disclose that part of the novel was published previously as a short story. The good news is those things are called "writing credits" and they're good to have.
The good news? This repurposing happens all the time (think anthologies of short stories to start with) , so you won't have a problem "re-using" your short story as long as you've been careful about the contracts beforehand.
This is one of the reasons I insist my Fabulous clients show me every contract they sign even if I didn't negotiate it or get a chunk of their earnings from it.
Small press contracts are frequently snake pits and more than once this year I've jumped up and down about terms that my author simply can NOT sign. (Most publishers have been gracious enough to amend the contracts to conform to my suggestions, so you should not worry about negotiating yours either.)