The World is My Oyster

26 May

{Thanks to Robert J. Sawyer for suggesting this topic}

One of the most controversial topics in publishing these days is the matter of territorial rights.  And, as usual, the driving force behind the controversy is the world-wide growth of e-books.

Territorial rights, put simply, are the rights to publish a book in a specific location.  These rights are often defined by language and divided based on history and market size.  Traditionally, for example, an author might sell North American English language rights, which gave the publisher the right to publish and distribute books in the USA, Canada and, oddly, the Philippines.  British and Commonwealth rights covered pretty much the rest of the world – though India was sometimes excluded because of variations in local law around copyright.  If you were an author with clout and a good agent, you could sometimes separate out Canadian rights or Australian and New Zealand rights.  Similarly Spanish rights were separated into Spain and Latin America and so on.

This system was supported by both publishers and authors – though more so by the latter than the former.  Often publishers would ask for world-wide rights in English (to prevent duplicate editions in their own territory) along with subsidiary rights to licence the work in other territories or countries.  They would split the licence fee 50/50 with the author.  Not always the best deal for the author (since the publisher could sell the rights for cheap or work a deal with one of its own subsidiaries) but it had the advantage of being simple and effortless.  Authors and their agents preferred more limited rights so they could themselves sell rights in other territories and get 100% of the fees.  Negotiations were often quite vigorous but both sides were essentially committed to the territorial rights model.

There were reasonable arguments for this.  It wasn’t simply because it gave you (publisher or author) the ability to sell the same thing twice (or 6 or 8 or 12 times).  Local publishers and distributors bring local knowledge of markets – often providing editions in different formats with different covers and even variations in spelling.  They were better placed to find the audience for that particular book.  Of course, that doesn’t explain why a UK publisher should control the market in Australia or Kenya… but still, the basic principal was sound.  In addition, it was cheaper to publish locally than export books for sale.

Then came e-publishing and on-line distribution.  Suddenly, customers (you notice that only now does the issue of readers come into this question) could find books on-line BUT THEY COULDN’T BUY THEM.  If the rights hadn’t been sold or licensed in their territory, their money was literally no good.  Amazon.com would not mail them the physical book in the UK; nor would it allow them to download the e-book.  For books, the Internet stopped at the shores of England.  You could window-shop but you couldn’t buy.  Not surprisingly, some people got annoyed – some even to the point where they had friends mail copies from the USA or the obtained pirated digital copies from who knows where. Books sold in England faced the same difficulties with American sales.  E-books don’t require the same publishing infrastructure and are essentially free to ship; the growth of China and India as cheap places to design and print physical books may also be a factor in reducing arguments for territorial rights.

Suddenly publishers and authors were no longer on the same side of the argument.  A wedge had been driven between them.  Not every publishing company reacted in the same way.  Some have stuck with the territorial model; many that did happen to have a global system of subsidiary companies which makes them well placed to continue to ‘sell the same thing twice.’  In some cases, it was moot. Certain countries don’t have a sufficiently developed WIFI system to support Kindle downloads.  But change is coming rapidly.  As recently, as 2008, some national publishers (notably in Australia) were arguing for a further separation of territorial rights.  By 2010, the arguments had grown more heated with some saying globalization was the way of the future and others still defending territorial systems.  A year later, the UK publishing company Bloomsbury, which published the Harry Potter books, announced it planned to abandon territoriality and seek world English (and possibly foreign language rights) in future deals.

So where are we today?  Increasingly publishers are reluctant to sign deals that don’t grant world (at least English) rights and almost always want both print and digital rights. Subsidiary clauses still exist but, in many cases, nationally based publishers may try to actually export physical books or sell digital ones world-wide rather than license them elsewhere.  Distribution companies increasingly offer or require world-wide distribution which puts pressure on small publishers to obtain wide-ranging rights.  All of this generally means less money for authors though not necessarily a lot more money for publishers.  Of course, self-published authors always have world-wide rights to their books – though marketing and distribution remain a huge challenge (though that, too, may be changing).  If, in addition to being a good writer, you’re also a whiz-bang business person and an avid marketer, self-publishing does become increasingly attractive – but the reality is, not every author is or wants to be a salesperson.  To succeed you have to participate in the process but… anyway, that’s a different blog.

Remember Australia? In 2008, one publisher was arguing for a narrowing of territoriality; in 2013, another was describing their growing role as a global publisher.

So where does Bundoran Press stand?  I had to answer that question recently when I made an offer to an expatriate Canadian writer for a novel.  I wanted to buy world English rights for print and digital and made an offer at the high-end of what I can afford; most other rights were retained by the author.  The agent responded with a desire to only sell Canadian rights for the same deal.  I proposed to sweeten my offer slightly (see, negotiation) and explained my position with respect to distribution, etc. But ultimately the author insisted so the deal fell through.  It was a good book and I would have liked to publish it but I simply couldn’t agree to just Canadian rights.

Why not, you might fairly ask?  It’s true that most (though not all) of the books Bundoran sold in the past were sold in Canada but that was before we had an international distribution deal.  It was also before Bundoran published a book by a non-Canadian (our first American writer is currently working on his second draft of a book for this fall). The Canadian market for science fiction is solid but not huge and, if I want to grow the business, I have to sell books in the US.  The American market by itself is more than half the market for English language books in the world; Canada is about 5%.  And, frankly, every book sold beyond North American borders increases the chance that I will still be publishing books three to five years from now.    It didn’t help that the author in question didn’t even live in Canada (or North America for that matter) and so would be of limited help in trying to market the book.  Even if she had lived just down the block, I would not have been interested in Canadian rights.

Like everything else in a publishing contract, territorial rights are negotiable.  Like every negotiation, what is agreed on depends on how much clout each side has. It also depends on what each side is prepared to sacrifice.  An author with a significant track record – and who works hard to make himself or herself a success – will get more, in terms of advances, rights retention and so on, that an author who is just starting out and is desperate to see their book in print.  Having an effective agent – many first time authors don’t have any kind of representation – can also help.  Publishers will also attempt to protect their own interests in these negotiations.  Large publishers may be able – through foreign subsidiaries – to benefit from retaining territoriality through the subsidiary rights system.  As fewer and fewer publishers dominate global markets (the Penguin – Random House merger takes effect in August), they will have greater power to impose the model that makes them (not authors) the most money.  Beginning and even mid-list authors may have little choice but to agree.  Small publishers will have to figure out ways to balance their own revenue needs with the risk of international distribution (and it is a risk!) while still offering concessions to attract the best novels possible.  For example, I offer a better than industry standard royalty on e-books, don’t try to grab a whole passel of subsidiary rights and have crafted a slightly more author-friendly rights reversion clause than is generally offered.

Time will tell if this Canadian based publisher can take on the world and still make money for both itself and its authors.

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