\nNational Writers Union April 1994
\n13 Astor Place
\nNew York, NY 10003
\nPhone (212) 254-0279<\/p>\n
(Services provided to members:
\ncontract advising, agent database,
\ngrievance handling, health care
\nplans, New York and San Francisco
\nJob banks for writers.)<\/p>\n
STATEMENT OF PRINCIPLES ON CONTRACTS
\n BETWEEN WRITERS AND ELECTRONIC BOOK PUBLISHERS<\/p>\n
by the National Writers Union
\n Produced by Philip Mattera<\/p>\n
Book publishing is at the threshold of a new era. An industry
\nthat for hundreds of years has put ink on paper is now delivering
\nmore and more of its wares in the form of floppy diskettes and
\nmultimedia CD-ROMs; some publishers are also beginning to
\ndistribute books via on-line networks. Although the electronic
\nbook publishing industry is young and still very much in flux, it
\nis not too early to try to establish some standards for the
\nwriter-publisher relationship in this field. This document
\nrepresents an attempt by a major writers’ organization to come up
\nwith some general principles that we hope will be adopted in
\ncontracts between writers and electronic publishers, primarily
\nfor works distributed in disc form.<\/p>\n
These principles address the four main types of projects writers
\nand electronic publishers would enter into: ones in which the
\nauthor of a print work who holds electronic rights licenses them
\nto an electronic publisher; ones involving original electronic
\nprojects centered on a writer’s text; ones centered on the work
\nof numerous writers or other creators; and ones in which the
\nwriter’s work plays a secondary role in an original electronic
\nproject dominated by other content such as music or video.<\/p>\n
In all four categories the writer’s traditional role is altered.
\nElectronic books, by their nature, involve elements beyond the
\nstringing together of words. The skills of programmers, computer-
\ngraphic designers, musicians, videographers and others are also
\nrequired. Creating a book almost invariably becomes a
\ncollaborative effort, in some cases as complicated as that
\ninvolved in making a film. Figuring out how to participate in the
\nnew nature of authorship will be a challenge for every writer who
\nwants to become involved in electronic publishing.<\/p>\n
It will also be a challenge for publishers. If electronic
\npublishing is going to thrive, it will need the diversity and
\ntalent of the most creative members of the writing community.
\nSetting fair standards will be essential in encouraging writers
\nto make the leap from print to the digital world.<\/p>\n
I. COPYRIGHT. In print publishing most writers are accustomed to
\nholding the copyright on the books they write. It is only under
\ncertain circumstances (textbooks, reference works, etc.) that
\nauthors may be put in a work-for-hire position, i.e. one in which
\nthe copyright vests with the publisher or other commissioning
\nparty.<\/p>\n
There is no reason why the principle of authors retaining their
\ncopyright should not be extended to the electronic realm. In
\ncases where a print work is adapted to electronic form or an
\noriginal electronic work is centered on a writer’s work, there
\nshould be no question but that the writer would retain the
\ncopyright on the text portion of the work while licensing it to
\nthe publisher. Where there are numerous writers, each would hold
\nthe copyright on his or her text. Separate copyrights could exist
\nfor the user interface, retrieval software or additional
\nmultimedia elements inserted in the work.<\/p>\n
The matter is more complicated when the writer’s contribution to
\na multimedia work is less predominant, e.g. a CD-ROM mostly made
\nup of electronic photographs or video clips, with the text
\nlimited to simple captions. In the case of such electronic coffee
\ntable books it might not be unreasonable for a writer to be
\nbrought in on a work-for-hire basis on the premise that the
\nwriting is a contribution to a collective work. However, if the
\nwriting is more extensive and has to be closely coordinated with
\nthe producers of the other creative content, it might make sense
\nfor writers and the other creators (who may be acting in a
\npartnership) to hold joint copyright in the entire content.<\/p>\n
II. GRANT OF RIGHTS. The publishing rights granted by a copyright
\nholder to a publisher typically cover three main issues: the
\ngeographical scope of the rights, the formats in which the rights
\ncan be exercised, and the duration of those rights.<\/p>\n
Electronic book publishers typically want the right to distribute
\nthe work throughout the world, and some want rights in all
\npossible formats. Whether the author wants to grant such sweeping
\nrights should be a matter of negotiation, in which a broader
\ngrant of rights should be reflected in the size of the advance
\nand the royalty rates.<\/p>\n
One important principle that should characterize all deals, is
\nthat publishers, after some reasonable amount of time, forfeit
\nrights for any formats they have not exploited. The practice of
\nsitting on rights should be discouraged.<\/p>\n
In addition, given the rapidly changing nature of electronic
\npublishing, there should–unlike the practice in print
\npublishing–be a time limit even on rights that are exploited. An
\nauthor should not be tied indefinitely to a publisher that may
\nnot be adequately promoting or distributing the work or is
\nfailing to keep up with changes in technology.<\/p>\n
III. CREATIVE CONTROL. It is customary in most print book<\/p>\n
contracts for the author to have ultimate creative control over
\nthe content of the work–except for the publisher’s right to
\nensure that the work conforms with some generally accepted
\nstandards of style, spelling, grammar, etc. and that the book is
\nnot obscene, libelous or an infringement on someone’s copyright.
\nMost publishers will assert greater control over matters such as
\ncover design and jacket copy, but often authors will have the
\nright of approval in these areas.<\/p>\n
A similar degree of author’s creative control should extend to
\nelectronic publishing. Texts should not be altered in any
\nsignificant way without the consent of the author, who should
\nalso be consulted on the packaging of the disc.<\/p>\n
Where there are substantial multimedia elements in the work, the
\nissue of creative control is more complicated. Some electronic
\npublishers may say that, in the same way that print publishers
\ngenerally don’t consult with authors on what typeface will be
\nused, they should have exclusive control over issues such as user
\ninterface. This is a mistake. A successful multimedia work is one
\nin which interface, images and sound are in harmony with the
\ntext. The best approach is for creative control to be a
\ncollective matter, involving publisher, writer and contributors
\nof other creative content, rather than the hierarchical approach
\nused, for example, in the film industry.<\/p>\n
Indeed, under the Berne Convention and federal law, moral rights
\nprotection is much stronger for visually-based works than it is
\nfor text. The rights of integrity and paternity will become
\nincreasingly relevant for multimedia works.<\/p>\n
IV. “MANUSCRIPT” ACCEPTANCE. One of the major sources of friction
\nbetween print authors and publishers is the issue of manuscript
\nacceptability for books that are contracted on the basis of a
\nproposal rather than a finished work. A substantial number of
\nsuch works are deemed unsatisfactory when they are delivered a
\nyear or more later, and the publisher seeks the return of the
\nadvance, which the author invariably has long ago spent. Writers’
\ngroups charge that many of these rejections are for reasons that
\nhave nothing to do with the quality of the work–that the real
\nexplanation is that the original editor has left, or the house
\nhas been taken over and the new owner doesn’t like the project,
\nor the house has simply changed its mind.<\/p>\n
It’s too early to tell whether electronic publishers will adopt
\nthese same practices. What would be better is for the industry to
\nregard advances as an investment that entails a certain risk. If
\nby the time the author delivers the text the publisher has for
\nwhatever reason changed its mind about the project, or if the
\nwriter has made a good faith effort but has produced something
\nunsatisfactory, then the project should be cancelled and the
\nadvance written off as a business loss.<\/p>\n
If the publisher feels the writer has not made a serious effort
\nto fulfill the contract, the publisher should file an arbitration
\nclaim (see item X below).<\/p>\n
V. ROYALTIES. The electronic book publishing industry is still
\ntoo young to have the kind of more-or-less standard rates seen in
\nthe print world. For the time being, rates will be negotiated on
\na case-by-case basis. However, royalty rates should be higher for
\nelectronic books on discs than for print books to reflect the
\nlower costs of production and the fact that the full income
\npotential after cost recovery is unknown, and, at the very least,
\nshould be fairly divided and accounted so that authors may share
\nin any long-term financial success of the product.<\/p>\n
Royalty rates should be even higher in situations such as
\nnetwork distribution of electronic books or “CD-ROM on Demand” kiosks, in
\nwhich production costs may be negligible.<\/p>\n
There is one practice, however, that should be adopted widely
\nfrom the start: that of paying royalties based on the list price
\nof the work rather than the net. The experience of print
\npublishing is that where royalties are paid on net (mostly small
\npresses or reference works), there is simply too much potential
\nfor abuse on the part of the publisher. Authors tend to be
\nsuspicious of the mysterious figures that appear on royalty
\nstatements and often feel ripped off when they realize what a
\nsmall percentage of the list price they are receiving.<\/p>\n
It is true, however, that for some electronic publishers, a
\nsubstantial portion of their sales come from discs that are
\nsupplied to hardware manufacturers to bundle with their CD-ROM
\ndrives or multimedia kits. Electronic publishers argue that they
\ncould not possibly afford to pay list-price royalties on these
\ncopies, which are sold at huge discounts.<\/p>\n
This issue can be addressed by adopting the print publishing
\npractice of paying lower and\/or net royalties on those specific
\ncopies that are sold outside of normal trade channels. (In the
\ncase of electronic books, normal trade channels would include
\ncomputer and software stores as well as book stores).<\/p>\n
VI. ROYALTY STATEMENTS. Royalty statements are the bane of print
\nauthors. Most of them are indecipherable documents that seem to
\nconceal more than they reveal. Some print publishers, however,
\nhave begun to revamp their statements to provide more detailed
\ndata (though this sometimes makes them less rather than more
\nintelligible).<\/p>\n
Given the sophistication of new technology, electronic publishers
\nshould follow the best practices of the print industry. Royalty
\nstatements should include complete information on the number of
\ncopies produced, shipped, returned, and remaining in stock.
\nAuthors should be in a position to know when their work is close
\nto being out of stock or out of “print.”<\/p>\n
Electronic publishers should avoid the antiquated practices of
\nprint publishers, in which it typically takes 90 or 120 days
\nafter the end of the semi-annual accounting period before the
\npublisher supplies the author with the royalty statement and a
\ncheck for any monies owed. In an industry producing works for use
\non computers, it would be only appropriate to follow a time frame
\nmore appropriate to the computer age. There is no reason why
\naccounts should not be settled within 30 days of the close of the
\nroyalty period. Following the practices of many other businesses,
\npublishers should pay a penalty of 3-4 per cent for each month a
\nroyalty payment is delayed.<\/p>\n
VII. TERMINATION. Print book contracts typically provide for the
\ntermination of the grant of rights if the publisher does one of
\nseveral things: fails to publish the book within a reasonable
\namount of time, fails to pay royalties, or allows the work to go out of
\nprint.<\/p>\n
All of these provisions should be adopted in electronic book
\ncontracts. Yet the concept of “out of print” has to be re-thought
\nin the electronic era, when small quantities or even single
\ncopies of a work can be reproduced easily and cheaply. The real
\ncriterion for whether a publisher can retain rights is whether
\nthe work is still being actively marketed.<\/p>\n
The sensible procedure would be to require the electronic
\npublisher to notify the author when it has decided that it no
\nlonger makes sense to make even minimal efforts to promote the
\nwork. At that time the work would be deemed “out of promotion,”
\nand the rights would revert to the author, who may choose to
\npurchase all or some of the remaining copies at a big discount.<\/p>\n
VIII. OPTION. The option clause common in print book contracts is
\na holdover from a time when the author-publisher relationship was
\nmore like a marriage rather than the one-night stands prevalent
\ntoday. The clauses are ultimately unenforceable (in legal or
\npractical terms) and serve mainly to inconvenience the author.
\nThey have no place in electronic book contracts.<\/p>\n
IX. NON-COMPETITION. Another controversial provision in print
\nbook contracts is the clause that bars the author from publishing
\nanother work that the publisher thinks would directly compete
\nwith its edition. Some non-competition clauses are written so
\nbroadly that they could undermine an author’s writing career.<\/p>\n
If non-competition clauses are going to be used at all for
\nelectronic books, they should be written as narrowly as possible,
\ni.e. they should only bar the publication of another work on the
\nexact same subject using the same materials, and for a specific
\ntime period that is essential for the success of the original
\nwork. In addition, such clauses should not inhibit the right of
\nthe author to publish the same material in formats the rights to
\nwhich have not been granted to the publisher.<\/p>\n
X. ARBITRATION. The cost and time involved in filing a lawsuit
\noften prevents print authors from challenging contract violations
\non the part of their publishers. Arbitration helps to level the
\nplaying field by making cheaper and speedier justice possible.
\nElectronic publishers should acknowledge the fairness of
\narbitration and make it a standard feature of their contracts
\nwith authors.<\/p>\n
XI. AFFORDABILITY & ACCESS. Although issues of pricing and
\naffordability of books have not traditionally been addressed in
\nprint book contracts, these are matters that should be of concern
\nto both writers and publishers in the electronic book industry.<\/p>\n
As electronic books begin to replace printed ones, discs should
\nnot be priced so high that they are affordable only to a small,
\nrelatively affluent portion of the population. As various forms
\nof electronic publishing reduce the cost per unit of
\nmanufacturing and delivering book-length works, a share of those cost
\nsavings should be passed on to consumers in the form of
\nlower prices. Electronic books, like their print counterparts,
\nwill become an essential component of civilization, so they
\nshould be as accessible as possible to everyone. Lower prices
\nwill also help to make electronic book publishing into the mass
\nmarket ultimately needed for economic viability.<\/p>\n
Lower prices alone will not ensure universal access. Many people
\ncannot afford even the computers and CD-ROM drives needed to read
\nelectronic books. The electronic book publishing industry, in
\npartnership with writers and other creators, should take steps to
\nexpand free access to their products through libraries and other
\nnon-profit institutions.<\/p>\n
# # #<\/p>\n
For more information, email Philip Mattera: slope@panix.com<\/p>\n
