Friday, March 31, 2017

Subsidiary rights

Monday's blog post elicted a question from Lisa Bodenheim

I'm confused about subsidiary rights. I had thought marketing and sub-rights belonged with the publishing company not the agency.

Who controls subsidiary right is negotiated when the book is sold. Sub rights can be licensed to the publisher. They can be retained by the author/agent. (Sub rights don't have anything to do with marketing.)

We try to retain the subrights cause it means more money for our author.  Here's the breakdown:

Publisher controls translation rights:
Book licensed to French publisher for $1000.00
Royalty statement credited for $500.00 (one-half of the amount) because money received from sub rights controlled by the publisher are split with the publisher.
Domestic agent commission (15%) ($75.00)
Amount remitted to author: $425.00

Author/agent retains translation rights:
Book licensed to French publisher for $1000.00
Comm to French sub-agent (10%) ($100.00)
Comm to domestic agent (ie me) (10%) ($100.00)
Amount remitted to author: $800.00

Whether translation rights are licensed to the publisher is negotiated at the time of sale.  You'll see it mentioned in the Publisher's Market deal announcments as:
(1) World (publisher controls translation rights);

(2) World excluding X (publisher controls translation right for everything excluding X);

(3) World English (author/agent has retained translation rights-the deal is for the English language book throughout the world); or

(4) North American English (author retains translation and English language in everything but the North American market)

The trick with retaining sub rights is you must have a way to sell them. Retaining them just to hold on to them isn't usually a good idea.



Lisa Bodenheim said...

Thank you Janet. This breakdown is soooo helpful. Almost double the income? What a huge difference that makes for an author. So in essence, when the agent partners with the author to retain subsidiary rights, it sidesteps a middleperson.

And I see there's a difference between commissioning fee for agents--15% when publisher deals with sub rights and 10% when agent deals with sub rights. Thought it's still a win/win for agents too, even at the lower commission rate.

Colin? Another one for the Treasure Chest.

Colin Smith said...

So, one might ask why an agent would ever let the publisher handle sub rights. The only answer I can think of is if the agent or agency doesn't. For example, if all my Sharkly dreams come true, and Joanna--I mean YOU were to represent my wonderfully hilarious novel, Janet, you would negotiate World English rights with the publisher, because you have the skilled and talented Kathleen Ortiz and Mia Roman there at New Leaf to hand foreign sub rights. Other agencies might not be so blessed. Correct?

I ask because it seems to me this might be a consideration when writers are deciding between offers of representation.

Colin Smith said...

Lisa: Indeed! I can add it to the new "Gems" page. :)

E.M. Goldsmith said...

Lots of questions but I will start with a few:

1. Does publisher take care of all media formats for books I.e. Hardback, paperback, electronic (Kindle), and audiobooks. Are royalty rates different per media type?
2. Is it usual for writer/agent to maintain sub rights on all English rights (UK, Canada, Australia) or are those generally sold together? It looks like author does better if agent sells each translation separately? How do royalties pay out for books sold abroad?

3. Film and video game rights and options? How are those generally handled by author/ agent situation? How long are options held generally?

I am so curious about what happens during the whole book sale process.

Carolynnwith2Ns said...

Um, we know Colin, and Colin knows Janet's tank-buds, therefore we know Janet's fellow swimmers too. Because of Colin I feel like an insider.

Knocks on door, no answer.
Rings bell, no answer.
Smoke signals.
No answer.
Okay so I'm an outsider.

OT, youngest daughter in surgery right now. Yowza.
Going to edit to keep my mind off things.

Colin Smith said...

2Ns: I met Mia the day I visited the Reef. I think Kathleen was out, however. Prayers for your daughter, and big hugs for you. :)

Carolynnwith2Ns said...

Thanks Colin.

You're special because you know special people.
I'm jealous.

Amy Schaefer said...

Hugs to you and your daughter, 2Ns. Medical woes are the worst.

subrights, as I understand it, are one of the negotiable parts of a contract. Publisher X might offer you a certain advance for world rights for paper, ebooks and audio. Then your agent goes back and says no, you can have this and that. And so on. In some cases, if the publisher has better distribution than your agency thinks it can sell independently, it may make sense to give them more rights in exchange for a larger advance. Some niche first books can be a tough sell for subrights, so it might not be a big disadvantage to give those rights up. And there are also clauses about rights reverting to you if the publisher doesn't use them in a certain period of time. These are all things a good agent will walk you through, holding your hand.

As usual, it all comes down to "it depends". Isn't it nice to know we'll never have to stop fretting about the various iterations of what might happen?

Brigid said...

I was so sure I'd wake up to a contest announcement. But I woke up to a snuggly baby who stretches like a milkdrunk kitten, so I'm not complaining. Much.

If I remember correctly, JK Rowling retained all ebook rights (were there ebooks in 1998?) and that served her very well...

Colin Smith said...

Brigid: Awwwwww!!! :D In 1998? There were pdfs... :)

Helen DeWitt said...

So is 50% now the standard publisher's cut on foreign rights? When my first book was published the publisher had world rights and took a 40% cut of translation rights and people later told me this was highway robbery, it should have been 25% tops. Has that changed?

BJ Muntain said...

EM: As I understand it (and I'm sure Janet will speak to this more authoritatively. I am neither an agent nor a lawyer of any kind)...

1) It depends on the contract. I believe the rights are generally print, electronic, etc. So if you only assign print rights to the publisher, they'll take care of hardback, paperback, trade paperback, etc. All other rights are subrights, and are subject to the contract. I do believe, though, that it's normal for electronic rights to be part of the print contract. All other rights, I believe, are subrights. As for royalties... yes. They are often different. Hardback and electronic are usually higher than paperback. I believe audio is usually lower, if it's through the publisher, but my memory may be failing me there.

2. I think (and this is conjecture, because I have seen some instances of this) that English rights are more likely to be split if the book is originally published in the UK. Don't forget, there are other English language markets. India, I understand, is a fairly large English market. And Janet has mentioned that there can be some confusion over those rights depending on whether the book is originally published in the UK or the US.

3. These rights (film, video game, etc.) are also negotiated. The publisher may want them, though if the publisher doesn't have the means to produce these, then it's better they not get those rights.

Most of this information, I've gleaned from this blog and from sessions on contracts I've attended.

Generally, though, as I said above, you want to avoid assigning subrights to publishers that have no way of dealing with them. So you really don't want your small publisher to have your film rights, because there are very few (if any) small publishers that can get your book in front of a producer. But with large publishers, I've heard of film deals being announced before the book has been released.

Also: What Amy said.

Thanks, Janet! Great post! (I love this stuff. I eat it up. I learn about legal stuff wherever I can find it, and Janet has taught me a LOT. (Yes, I've also read most of my city's bylaws - the ones that pertain to me, anyway and can tell you exactly what is noted as a 'crosswalk' and what hours of the night are considered 'quiet'.))

2Ns: Prayers for your daughter, and for you.

Brigid: Ah, the pre-ebook electronic rights. I believe there were ebooks then, but not many. I think the technology (beyond the PDFs Colin mentioned) was just beginning to be developed. JK published with a smaller publisher, so she was probably better able to negotiate that at the time. But many publishers assumed that their contracts also included ebooks, even though ebooks weren't a thing yet. There were some lawsuits between authors and publishers in the early 2000s over this. That's why these days, many contracts include wording something like "author retains rights to all future technology" (That is nowhere near the official legalese - I just started my coffee, and my vocabulary is faulty.) Good for JK to have the foresight to retain her ebook rights!

Holly Abston said...

I've been lurking and reading your blog and the Query Shark blog for a couple of years now. Thank you for your generosity in sharing so much insight, wisdom, and information. I write and illustrate picture books, so unfortunately can't query you, but I am grateful for the education!

Colin Smith said...

Hey there, Holly!! Welcome out of lurkdome! Technically, you can query Janet your PB. She actively encourages people to query her whatever they write, since there are times something she doesn't normally rep blows her away. That doesn't happen often, but just to say, you can... :)

Feel free to join the comment fun!

Claire Bobrow said...

Another great post today. It's like getting a Master's degree with one's morning coffee! I'd be curious to hear the answers to E.M. Goldsmith's questions.

2 Ns: wishing your daughter smooth sailing today, and a speedy recovery.

Hi Holly! Nice to see another picture book author jumping in :-)

Elissa M said...

I'm wondering if how an agent handles subsidiary rights is something to ask when offered representation. Knowing that an agent/agency has the means to handle various rights could make a difference when deciding between competing offers.

Carolynnwith2Ns said...

Thanks all for your good wishes and prayers. My sweet girl is in recovery and will be okay.
Ya know, they never tell you about Steel Magnolia days like this. It's awful but over.

french sojourn said...

2Ns; Great news, thanks for the update.

Claire Bobrow said...

"They" don't tell you about a lot of stuff. Life = crazy surprises.

So glad to hear your girl's doing fine, 2Ns.

RosannaM said...

2Ns Glad to hear your daughter is out of surgery. Hugs to you and prayers for speedy healing for her.

Interesting post and a clear reason we need a skilled negotiator on our behalf once we dip our toes into the publishing business. Maybe even a sharkly one...

BJ Muntain said...

Elissa: Janet covered this on Monday, in her What to ask an agent after you get an offer post. :)

2Ns: Great news!

Casey Karp said...

Argh, darn it. Long comment didn't post. *sigh*

Cw/NN, very glad to hear it's all gonna be okay.

EM, BJ covered your questions well, but lemme throw in a couple of additional thoughts.

1) Yes, royalties differ by media type. For example, I'll be getting a slightly higher percentage per hardback sold than per paperback. In both cases, it's a percentage of the list price. However, for ebooks, I'll be getting a much larger percentage--but it's of the net (in essence, what the book actually sells for after discounts, promotional sales, and so on). That's a big difference.

2) As usual, it's all about what the contract says. Most publishers will want both physical and electronic rights, but not always. There are (mostly) small publishers who only want the electronic rights because they're betting on the future being electronic, and they don't do paper.

3) As BJ hinted, many publishers had (and still have) clauses in their standard contract claiming rights to any format yet to be invented. That's how they snagged electronic rights when ebooks took off, and in many cases paid authors next to nothing. Unless you've decided to let your publisher handle all subsidiary rights, you probably want to negotiate out those "future formats" clauses. Even if you are letting them handle subsidiary rights, you may want to get rid of that clause--who's to say they'll handle format X well, or even at all?

Lennon Faris said...

Another thing I didn't know I didn't know! Thanks, Janet!

2Ns - so glad to hear everything went well for your daughter. Only one of my kids has ever had a procedure where she went under anesthesia. Ten minute procedure ...I cried. Hope your girl continues to do great.

Unknown said...

Some days I wonder if I would have written a novel if I knew all of these ins-and-outs beforehand. I was so naive! But, now I know and I feel so much more prepared for query round two. (And the ms is so much better). Thanks to Janet and all for the great info!

Colin Smith said...

2Ns: Yay! Good news. Here's to a speedy recovery! :)

Kathy: Reading this stuff, I sometimes wonder if I'm sure I want to get into all these waters! But, you know, it's sounds like fun really. Sort of. And, going back to the post about not giving up your day job, if your income doesn't depend on getting published, you can (I think, anyway) relax a bit and enjoy the process. I mean, come on. Who wouldn't love watching agents and publishers fighting over who gets to publish your novel in China? :)

Joseph S. said...

Yesterday was a hectic day and I missed out on the quitting your job discussion. Since I did quit my (nice) job, I had some experienced thoughts on it. Maybe later.

On today’s topic, I like Amy Schaefer’s comment. As Janet R. notes, it’s a point of negotiation and a point of who can do a better job overall. A publisher may increase or decrease (as the case may be) the advance, or a publisher may have a marketing network already in place worldwide. For example, I imagine my WIP would do well in Brazil, Spain and Germany. One of the the many things I don’t know is would it be better in those counties if the book remains in English or if is translated, or would it do better if we use one foreign publisher or one for each country or group of countries. Or is the increased net payout for retaining the right more than offset by a reduced advance payment, and of course how successfully your agency negotiates with foreign publishers.

The more answers you get for those and other variables, the better your decision (shot in the dark) will be.

A similar analysis goes for retaining movie rights I would imagine.

Joseph S. said...

Kathy and Colin

I think if more people worried about and evaluated the risks of marrying that "special someone" the way we fret over the future of our books, there'd be fewer marriages.

Unknown said...

Joseph :) My husband and I promised each other to, "engage it [life, marriage] fully," and support each other no matter what came along. That attitude makes for a rich life. I think it would make for a rich writing life too. And having that kind of a supportive relationship with an agent wouldn't hurt!

Panda in Chief said...

Welcome Holly!
Although Janet does not rep kid lit, New Leaf has at least one agent, if not more, who rep picture books. I know at least one PB author/illustrator repped by Joanna Volpe, so go for it!
Plus how fun to swim with sharks! Good times.
Have a great weekend, everyone!

Panda in Chief said...

Also re: yesterday's discussion on quitting one's day job, I quit mine 29 years ago to paint full time, and while it hasn't always been easy, it's always been interesting. I should add that I have no dependents, other than feline ones, and not even that now. I also learned to contemplate the expenditure of every nickel, and have had reasonably good health.
Also my jobs were menial and low paying, so there's that too.

If I had an nteresting job that paid well, might have taken a different road. After being self employed so long, I am pretty much unemployable, so panda on I must!

Susan said...

For at least a few hours today, I didn't know what day it was. Oy, what a week it's been. Carolynn, praying for a speedy recovery for your daughter. For everyone else, I hope you had a great week and if not, I hope you have a better weekend!

Panda/Anne: Yes, panda on, you MUST! Your fans demand it! <3

I'm off to shake the remains of the day away by diving into some writing. Let's see where these characters want to go now...