The Business Rusch: Competition

The Business Rusch: Competition

Kristine Kathryn Rusch

 

Just a few years ago, traditional publishers had a monopoly. They controlled the distribution of books. This meant that the publishers dictated terms to booksellers and they dictated terms to writers. What resulted was what happens whenever anyone controls a marketplace: lots of nasty business practices, lots of unfairness, and lots of take-it-or-leave-it ultimatums.

Those of us who got our start in traditional publishing turned ourselves into strange pretzels as we tried to survive the craziness. We put up with behavior that we wouldn’t tolerate in our personal lives, closed our eyes to the damage that we couldn’t stop, and did our very best in a bad situation.

Traditional publishers never got in trouble for their monopoly because they studiously avoided working in tandem—Random House did not collude with Bertelsmann to control pricing, for example. But they did—often—play follow the leader. If one publisher came up with a good way to make extra money, then the other publishers quickly followed suit.

You’re seeing the same behavior from the airline industry right now. The various major airlines control the not-so-friendly skies. When one adds a baggage fee, or a leg-room fee, or a fee to use the damn bathroom, another one does a variation on the same thing, until the only way that a passenger can protest this kind of behavior is either get their Congress critter as riled up as they are or refuse to fly altogether.

But eventually, we all need to get somewhere thousands of miles away very quickly, and unfortunately, that means that we have to interact with the airlines—against our will and to the detriment of our pocketbooks.

Just a few years ago, the only way to get a book was to interact with the traditional publishing industry in one way or another, either through a bookstore or the library. Even those folks who frequented used bookstores still had a finger in the publishing industry, because the book had to be published first before it ended up as an already-read pee-stained copy on some dusty shelf.

This meant that a writer who wanted an audience larger than their friends and family had to work with the publishing industry. And if the writer’s project didn’t have Success written all over it in big silver letters (meaning it wasn’t Harry Potter meets Edward Cullen in a battle to the un-death, with hobbits and one pretty girl looking on), then that writer got paid a pittance for joining the club. And the writer was grateful for that pittance because She Was Published.

Just a few years ago, publishers had given up on building careers, deciding instead to launch newcomers all the time in hopes that they would become the latest Stephenie Meyer or Suzanne Collins. So the idea of building a career one midlist novel at a time had faded, and a lot of writers—who had been at this for decades—made noises about retiring or moved to comics/gaming/screenwriting or became teachers, truck drivers, or bitter drunks sitting in the corner of every writers conference within driving distance.

At the same time, publishers had given up on independent bookstores, making them pay full wholesale price for a book while giving a chain like Borders a deep discount for that same book. Which meant that the chain bookstore could sell that book at half-price or lower, while the independent, which probably paid half of the cover price, couldn’t discount at all.

Publishers didn’t care as long as they made their four-to-six percent profit every year. And because no one protested their business practices, there was a lot of skimming, and forgotten royalties, and unreported foreign sales. Who was going to fight the big bad publisher, anyway? A writer? Give me a break. The agents? Most agents soon figured out that they made more money if they went to bed with the publishers instead of the writers.

(I blame Hollywood contaminating the agent pool by teaching them the old joke: He was so dumb that he slept with the writer.)

Expect an agent to defend a writer’s work, actually negotiate a contract, make a decision that favored the writer? Only if that writer was (and is) the agent’s cash cow. The midlist writers got screwed from every direction—agent, publisher, it didn’t matter.  All the while the agent and the publisher kept telling the writer, “That’s the way it is, sweetie. Take this deal. It’s the best we can get in these tough economic times.”

And you know what? Given the realities of publishing just a few years ago, it might have been the best they could get.  Editors fought for their writers…until it became clear that an editor could lose her job over fighting too hard. Agents fought for their writers…until it became clear that the agent wouldn’t sell to that publishing company any more if she fought too hard.

Writers shrugged and gave in. Or worse, writers had no clue what they were signing or what they were doing, and believed the agent/editor/publisher when they said, “Sweetie, you’re not worth any more than this.”

It was—and still is— the rare writer who stood up for herself.

I’ve been trying to get writers to stand up for themselves for years now on this blog. I just published a group of blog posts as a short book for writers called Surviving The Transition: How Writers Can Thrive In the New World of Publishing, and the point of that book isn’t to convince you all to go indie and publish everything yourself.

I’m a realist. I know that most writers will never go indie, even if it is in the writer’s best interest. Writers rarely make the hard choices for their best interest. Writers—established or not—are desperate to be published, and will probably sell their grandmother (for one-one-thousandth her worth) just to get their novel published by a regional press.

So why am I pissing in the wind? Because I know that a lot of you are listening. You say so, and then you prove it by negotiating deals that surprise me, standing up for yourself in new and creative ways, and then reporting back.

Instead of giving up on the writers who decided to stick with traditional publishing for everything like some of the gurus of indie-publishing have (going so far as to call these writers “stupid,” when they are not), I would rather figure out ways to make publishing—traditional or not—better for all of us.

Because if I had my druthers, I would indie publish and traditionally publish. I don’t like having all of my eggs in one basket, even if I own the basket myself.

So, selfishly, it’s better for me if a bunch of us shove traditional publishers kicking and screaming into this new world along with us.

None of us writers will ever agree on the best contract terms. What’s good for me won’t be good for you. You have different circumstances.  I may not need a hefty advance. You might. I might think that a royalty rate on e-books that’s too low is a deal-breaker. You might not. And so on.

But we can—and should—agree on one thing:

We should be willing to walk away when a traditional publisher offers us terms we don’t like.

Why is that important? Because traditional publishers have to realize that they are no longer the only game in town. Those old take-it-or-leave-it attitudes no longer apply. Their monopoly has vanished, and we as writers need to reinforce that with each and every contract negotiation.

And—by the way—don’t expect your agent to have the same attitude. The agent model thrives in the old world of publishing with the monopoly, and struggles in this new world of publishing. It’s only a handful of good and ethical agents who even acknowledge that the writer can sometimes be better off without a traditional publisher, without trying to rope that writer into some company affiliated with the agency itself.

So as I say almost weekly in this blog, the writer has to educate herself on copyright and on contracts and on business. Every month, I tell you guys to buy the Copyright Handbook from Nolo Press, and every month most of you ignore me. But you need it now more than ever. And you need a good intellectual properties attorney to handle your contract negotiations with you, with your oversight.

The other area we as writers should completely agree on is this:

We should never ever ever ever sign a blanket non-compete clause.

As traditional publishers slowly realize that they no longer have a monopoly, they’re acting worse toward writers instead of better. They’re trying to scare writers or worse, force them into behaving a certain way.

Remember that I am not a lawyer nor do I play one on TV. You should always keep that little thought in mind when I discuss contracts or legal terms. Mostly I talk about them from my own extremely opinionated point of view.

And in that point of view, I believe that one of the most insidious things a traditional publisher has in the contracts these days is something called a non-compete clause.

The clause often goes like this:

“The Author agrees that during the terms of this Agreement he will not, without written permission of the Publisher, publish or authorize to be published any work that might compete with the Work.”

(The capitalized Work refers to the book that is the subject of the contract.)

Sometimes the clause continues with this:

“The Author also agrees not to publish any other work without written permission of the Publisher for two years after the publication of the Work.”

The net effect is to prevent the writer from writing anything else without the publisher’s permission. Since the first part of the clause goes for the term of the Agreement, and the term of the Agreement is often dictated by sales, then that means that for a writer whose book (under this Agreement) becomes a bestseller, this writer will always have to ask his publisher’s permission to write anything else—including blog posts.

Even the more limited “also agrees” clause for two years or six months or whatever “after the publication of the Work” is terrible. Because that still puts a writer’s entire career at the mercy of his publisher. It took three years from purchase to publication of my first novel. If you add the two years of the clause on top of that, I wouldn’t have been able to publish anything without my publisher’s permission for five years.

Those five years established me as one of science fiction’s premier short story writers. I won the John W. Campbell Award for Best New Writer in those years, based not on the novel (which hadn’t come out yet) but on my short science fiction. I also sold nonfiction, mystery fiction, and horror fiction, none of which I could have published if I had signed that clause. I would not have been able to make a living as a writer.

Writers who now indie-publish their backlist or their other work that the traditional publishers have turned down cannot do so under that clause.

These clauses are horrible and insidious and, some believe, unenforceable. (The Passive Guy, who also works as a lawyer, has expressed that opinion in his excellent (and much more detailed) analysis of a non-compete clause.) The reasoning goes that such a clause is actually a restraint of trade. You can’t interfere with someone’s right to earn a living.

The problem with an unenforceable clause is this—if you sign a contract with that clause in it, thinking it unenforceable, and your publisher decides to enforce it, then you’ll end up in court arguing your case. Even if you have a good case—a winnable case—you’ll still lose years of your life and maybe tens of thousands of dollars defending yourself.

Do you want to do that? I certainly don’t.

The best way to avoid such a mess is to refuse to sign such a clause in the first place.

Walk away from that contract. Walk.

Carrie Vaughn did just that a few years ago. Think about this: at the time she walked from her publisher, she had become a New York Times bestselling author—you know, she had joined the ranks of the writers who supposedly have clout in this business. But her traditional publisher refused to budge, expecting her to cave.

She did not. She got another traditional book deal and did not have to sign a non-compete clause to do so.

Her experience came just as the indie book publishing revolution started. Who knows what choice she might have made today.  What’s fascinating to me was that her traditional publisher was unusual in those days for asking for such a clause.

It’s standard now. Traditional publishers have gotten draconian rather than easing off. They’re trying a lot harder.

And watch for this. The traditional publisher might be willing to remove the offending non-compete clause, because the same thing might be covered elsewhere in the contract. The other places the non-compete shows up are the option clause:

“The Author agrees to let the Publisher see the Author’s next Work. The Author warrants that no other Publisher may see the next Work until and unless this Publisher has refused the Work. Even then, the Author agrees to give the Publisher the right to match any offer from a competing publisher….”

I’m doing that one from memory, because I haven’t signed crap like that ever and I haven’t seen it in a contract of mine for years, although I see it all the time in other writers’ contracts.

Notice there’s no timeline here. The publisher can sit on the “next Work” for a decade if he wants to, and the writer can’t do anything else with the property. Also, the phrase “next work” can apply to non-fiction, coffee-table books, sports books, or science fiction. It’s not specific. So if you sell your publisher an urban fantasy, he might demand to see the cookbook you’ve just finished—and he might prevent you from ever publishing it.

Think that won’t happen? This one has existed since the dawn of publishing contracts and it stalls writers’ careers all the time. You need to chop your option clause down to something completely specific—“Author agrees to let the Publisher consider the Author’s next novel in the urban fantasy series about sexy trolls written under the name [whatever you sold the book under]. Publisher has 30 days from the turn-in of the Work to make an offer on the next Work.”

Note that this clause isn’t dependent on publication, which can be dicey and might never happen. And even if the publisher dilly-dallies, it doesn’t hold up a writer’s career. She can pull the next book after the publisher has had thirty days to consider it.

Plus, the option only applies to the next book in the urban fantasy series about sexy trolls that she wrote under one name. If she decides to write a second urban fantasy series about sexy trolls under a different name, the option doesn’t apply. Nor does it apply to her mystery about deadly trolls, her coffee-table book depicting trolls that live among us, or her nonfiction sports book about metaphorical trolls who manage basketball teams.

Finally, the other place the non-compete nonsense is showing up is, believe it or not, in the warranty section. The warranty section of a contract used to be boilerplate—the author warrants that she didn’t copy the novel verbatim from some famous writer, etc.  Now traditional publishers use the warranty clause to hide all kinds of stuff that they don’t want the writer (or the writer’s representative) to notice.

One of those things is the non-compete. It shows up in the warranty section like this:

“The Author Warrants that she will not publish another work without Publisher’s express permission.”

And that’s it. It does the same duty as the non-compete clause, but it’s usually buried in more obscure language between clauses about publishing delays due to Acts of God, and the author certifying that she has the legal right to sign this particular contract.

So even if you cut one part of the contract, it might not matter. You have to cut all references to the non-compete wherever it appears.

I’m getting reports from several writers, not just the Carrie Vaughn piece, that many traditional publishers refuse to cut the non-compete clause. If you like your publisher and don’t want to walk, you can often defang the clause, like I showed with the option clause above.

You could add language like “For six months [or one year or two years] from the publication of the Work, the Author agrees that he will not publish or authorize to be published any similar work under the same name which would injure the sale of the Work.”

Note that there’s no publisher’s permission involved. And the publisher would have to show damage, that the sales were injured. A time-limit also helps.

Also realize that any promises your editor (or agent) makes to you in e-mail doesn’t count. Whatever changes you make have to be in the contract. Promises made in e-mail don’t count if they’re not in the contract itself. I’ve had a lot of contracts with easy-going editor/publishers who got fired or moved up the corporate ladder and got replaced by the demon spawn from hell.

Now I approach all of my contracts, even if they’re negotiated with really nice reasonable people, as if that person will get fired and replaced by said demon spawn from hell. Because I’ve experienced this ride before and it ain’t no fun.

Why am I harping on the non-compete clause at the expense of the royalty clauses or the advances or any other egregious thing that might be in a publishing contract?

Because the non-compete clause is the way that traditional publishers are using to hang onto their monopoly. So they can’t control the entire industry any more? No big deal. They can control their writers.

You think the publishers won’t enforce these clauses? They will, if push comes to shove. And it just might, particularly if you’re successful.

So put this one in your goodie bag. Do not sign a blanket non-compete clause. Ever.

And those of you who are indie published, you might think you’re out of this fight, but you’re not. If you sign with Kindle Select, you’re agreeing to a non-compete clause. If you make a movie deal and you don’t read the contract, you will probably sign a non-compete clause.

Think it doesn’t happen? It happens all the time. The Puzo estate is dealing with just such a thing right now, with book sequels to The Godfather, and this baby’s in litigation.

Don’t let anyone tell you what to write. Ever. Ever.

If you keep that as your philosophy, you will avoid the worst of the non-compete clauses. The net result will be that you will retain complete control over your writing and your career. You won’t sacrifice it because someone tells you it’s the only way to get published or the only way they’ll do business with you.

If it’s the only way they’ll do business with you, why would you want to do business with them?

Walk away.

You’ll be doing us all a favor.

I blog every week on the publishing industry, taking time away from what I consider to be my actual work—writing fiction. I lose about 3,000 words of fiction every week to do this, which means that I lose revenue. In order to continue doing the non-fiction blog, I do need to earn money from it. Which means from you, the readers, because I’m going direct to you with the information, no middleman.

Last week, I left off this little coda, and sure enough, donations dropped off, like they do every time I fail to mention the donate button below. So in addition to sending me your comments and your e-mails, please consider leaving a tip on the way out.

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“The Business Rusch: “Competition” copyright © 2012 by Kristine Kathryn Rusch.

 

 

 

 

 

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52 Comments

  1. Wow there is so much to learn. I am writer who was thinking about doing both-traditional pub and self pub. I didn’t think about all the little clauses out there that could prevent me from doing this. It makes you think about it all. Thanks.

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    • Glad I helped you think about all this, Vera. :-)

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  2. <>

    BOY, does that resonate with me.

    I’m currently in a very contented situation, self-publishing my backlist and writing frontlist for a publisher which, in addition to paying me well and in a timely manner, treats my work with respect, publishes it well, and treats me as a valued professional partner in the the publishing process.

    Prior to arriving at this happy state of affairs, I spent 20 years writing for a variety of publishing houses. Although I had some =very= good editors (also some disastrously unprofessional and abusive ones), every publishing house I was at for 20 years treated me like a diseased hooker.

    Happily, the digital revolution ensures that I now have alternatives I never had before. Ten years ago, my career experiences reached such an unprecented nadir, I decided to switch to another profession (so I went off to grad school), because my own experience was that earning my living as a novelist invariably meant that every publisher I worked with (as well as all the agents I worked with, and a few of my editors) treated me like a scab-ridden, aging, expendable crack whore with body odor. But now, of course, conditions are changing so much (and so fast!), there are far too many choices available (and more becoming available all the time) for me ever again to wind up feeling I can’t get published unless I get on my knees and open wide for every publisher that gets off on spitting in my hair and kicking me while I’m down there with my face buried in its crotch.

    (Sorry about the imagery.)

    And, yep, this was all sh*t I would NEVER put up with in my personal life. Yet I put up over and over and OVER and over with the most demeaning, denigrating, malicious, insulting, demoralizing, obnoxious, irresponsible, inept, inappropriate, dishonest, and demented SH*T in my professional life for YEARS. Everyone in my personal life was always AMAZED at the sh*t I was putting up with in my professional life, because they all knew perfectly well that no one would EVER get away with pulling that sort of crap in my personal life. And I put up with it because, in our profession, there was usually no other way to keep getting work.

    It’s good for ALL of us—VERY good—that that is changing rapidly now and will keep changing.

    Reply
    • Um…powreful imagery, Laura. LOL. But yes, the traditional publishing industry does treat its writers poorly, even its bestsellers and expects us to be grateful. And now it’s getting worse, not better. [head-shaking]

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  3. “until the only way that a passenger can protest this kind of behavior is either get their Congress critter as riled up as they are or refuse to fly altogether.”

    P.S. As it happens, I’m also fed up enough with airlines to make changes (I’ve had delays of 12 hours or more on my last 3 airplane trips, and what really BURNED me about this was how INCREDIBLY =RUDE=, =OBNOXIOUS=, and =ABUSIVE= the airlines and their employees were throughout each of these experiences–as WELL as the fact that I had, each time, spent =hundreds of dollars= to… cancel half my plans while sitting in airport food courts for 15 hours). So I’ve been investigating alternate modes of transportion for my next few trips, and will be traveling by car, bus, and train as much as possible from now on. (In particular, I’m pleased to see how many independent, affordable, well-reviewed intercity bus services can get me where I’m going.)

    When you screw up your whole industry and treat everyone you rely on (such as writers or passengers) like scabby crack whores instead of like valued professional partners or valued customers, you have to expect that smarter, sharper competition will come along, and that your suppliers and your customers will prefer to deal with them instead.

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  4. I recently encountered this in a magazine contract. The non-compete clause would bar me from publishing an article on the “subject” in a comparable magazine in perpetuity.

    Okay, so it didn’t say “in perpetuity”, but that was the effect of a little clause that was buried in one sentence. I asked for a time limit—which is normal, so that the magazine will be the first one to release your article, and you don’t release another one sooner.

    The ‘zine wouldn’t budge, trying to convince me why their clause was a good idea, using some flawed logic that assumed all comparable magazines have the selfsame audience forever.

    I said “Bye.”

    This was a non-fiction ‘zine on a niche topic (unrelated to writing). Publishing companies aren’t the only ones who bury fangs in contracts.

    Reply
    • I’ve run into terrible magazine contracts for non-fiction, Carradee, mostly through trade magazines (magazines for a particular profession). Most of the people writing for those magazines are professionals in the business, not professional writers, so they have no clue. And sometimes all you can do is walk away. Good for you that you did.

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  5. One of the problems is that most writers don’t what to be writers; they want to be authors[1]. They don’t want to get involved in the business aspects of writing. But they have to realize one truth: if you want to get paid for writing, you _must_ deal with the business or you’re going to get screwed.

    [1] http://www.deanwesleysmith.com/?p=6190

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    • Exactly, Goldhawk.

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  6. These crazy non-compete clauses are one of the reasons I’m glad I never managed to get a trade publishing deal; I’ve had to sign them while working in IT, but there it just meant that I couldn’t work for a direct competitor for a year after leaving the company (and that was probably unenforceable if the competitor wanted me enough to pay any legal fees). These are far worse.

    In the last year I’ve gone from ‘wow, I wish I could sell this book’ to ‘I really don’t want to have to deal with all the ways a publisher would try to screw me if I sold them this book’.

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    • Edward, you can negotiate the clauses away if you know what you’re looking for. And if the company doesn’t want to play nice, don’t do business with them. It’s that simple–and that hard. But yes, as I said to another commenter, things have gotten much worse than they were before. And with most agents in bed with the publishers (or worse, becoming publishers themselves), most writers don’t even realize they no longer have an advocate.

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  7. Informative and eye-opening as always. My co-author and I are about to self-pub through Amazon and have considered the Select program, but haven’t made a definitive decision. Will have to give that careful consideration.

    Thanks Kris!

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    • Robbyn, there might be a use for Select, if you’ve published a lot of books and you want to use that Select book as advertising. Otherwise, the program does not benefit a writer in any way, despite what the people from the Kindle boards say.

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  8. It just astonishes me that publishers want to hamstring their writers like this. Seems incredibly short-sighted. They don’t want their writers publishing anything else? Hello? What about the fact (which you mention here frequently) that having more titles available make an author more visible, and thus more likely to sell?

    Head-shaking. Amazing.

    Thanks, Kris.

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    • I agree, Pati. It is short-sighted and rather astounding.

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  9. I have to disagree that Select is a non-compete clause, Kris. It does not affect my other works in any way. I can have as many works as I want where ever I want them while having one or more work in Kindle Select. They can be new works. They can be old works. They can compete or they can not compete. As a matter of fact not only can I do that… I do it.

    Your advise is excellent 99.9% of the time but there you are simply wrong.

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    • JR, sorry. It has a non-compete clause. Just a different type. You may not sell your book with any other company besides Kindle. That’s a worldwide non-compete clause. Sure, you can sell other books with other companies, but if you sign up with Select, for that one book, you can’t go anywhere else unless you cancel your contract with Select. By definition, that’s restricting you. And it won’t allow you to sell with competitors. Ergo, a non-compete clause.

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  10. Excellent article.

    I have a small quibble concerning Kindle Select. My publications have done absolutely nothing on Barnes & Noble, but I have had a little success on Amazon. Hence, as an experiment, I recently unpublished 4 of my 6 works on B&N and enrolled them in Kindle Select.

    If after ninety days, I notice no change, I’ll republish them on B&N. But if the Select Program proves beneficial, then I’ll probably stay with Select. It’s a fine line. You have to constantly keep abreast of what’s working and not working, and then be willing to shift if circumstances dictate it. After ninety days, I can always get out if it’s not working to my advantage.

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    • Peter, it’s the writer’s choice about how they conduct their career. I’m not discussing the merits of Select, although the more I read about it, the fewer merits I see. I’m discussing the fact that for 90 days, you’re restricted to Kindle’s sandbox only. That’s all. With an automatic renewal, so if you miss your window, you’re stuck again. Your choice, of course, but be aware that what you’re signing is a non-compete clause for that book.

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  11. FWIW, I totally agree. As it happens, right now I’m with a publisher who doesn’t impose these kinds of stupid clauses on its writers – no non-compete clauses, not even an option on subsequent books – and I couldn’t be happier. They’re not a “Big Six” publisher, admittedly, but not technically a small press either – they’re one of what are generally called “independent presses” in the trade (not to be confused with the new “indies”, i.e. self-published authors). I hope never have to make the choice of walking away from a contract, as I really enjoy working with publishing professionals who believe in what they are doing – it would be a painful decision…

    Reply
    • I am so glad that you’re with a good publisher, Anne. Be warned, however, that if the publishing company gets sold or the original team leaves, that the company might no longer be good. That’s why I always view contracts from the perspective of having them enforced by the demon spawn from hell. If the company is–as you say–doing good contracts now, then you’re protected if the company changes hands. But you must then watch future contracts. (And oooh, boy, am I jaded. )

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  12. Kris, truly a stellar post here.

    Before I began writing (and editing, and publishing the occasional antho) I worked for over 20 years as a successful self-employed decorative painter. Most of my clients were rich and often powerful people (their names… would frighten. LOL); and though most were pleasant, I learned very early on that the only bargaining chip the little person is their work–nothing else. Not I did I walk from several jobs over the years when I got red flags, but I never once regretted it.

    I fear most newer writers, offered even one of today’s modest advances ($3k?) would sign, or allow themselves to be talked into signing, pretty much anything. But you’re dead, dead right: and besides their own future good, there’s the greater good: every time somebody gives away the farm, it hurts us all. Whatever the pain, one should always, always have the courage to draw a line and say NO to a bully.

    What also amazes me TBH is that people smart enough and with sufficent command of the language to write a novel can’t read and parse a contract. It’s not that difficult! Which brings us to the Kindle Select terms, on which I also agree with you. The thing is horrible, but clearly and awful lot of people have signed up for it.

    In conclusion, thanks, and keep up this great column!

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    • We definitely agree, Dario. I too wonder why it’s so hard for writers to defend themselves contractually. I’ve actually had to have writers explain it to me, because apparently I was born with a do-not-screw-with-me gene. I guess most people never get that one. I love your example of your previous business. Spot on. Thanks for the comments.

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    • SFReader, a contract is a negotiation tool. Everything in it is negotiable. Everything. If someone tells you that boilerplate can’t be negotiated, they’re wrong. If someone tells you that a part of the contract has been there forever and can’t be negotiated, they’re wrong. (Usually that crap comes from an agent who tries [or doesn’t try] to negotiate something.) A contract is a starting point. When it’s signed by both parties, then it is set, but even then it can be amended or discarded with the approval of both parties.

      Thanks for the link to Robin Sullivan’s blog. She handled everything exactly right, including perhaps walking away from a six-figure deal because she (and her husband) didn’t like the contract terms. They looked at the contract and saw it for the career-killer that it is. And didn’t sign. No one should. That’s my point. Glad she reinforced it–two weeks before I wrote it. :-)

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  13. Eek! That shiver of unease I feel when I read about non-compete clauses is the same one that had me avoiding agents and publishing in general. I read copyright guidance when I was starting out as a writer in my teens and what I understood then made me wary. So wary, in fact, that I hardly posted out my work, just kept writing.
    Now I’ve put my work up online, and still own all my rights, I’m grateful: to you, to Dean, and many other writers who have shared these and similar experiences.
    P.S. These Business Rusch posts are the highlight of my Thursdays online!

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    • Thank you, Lee. And yes, that clause should make you shiver. It’s pernicious.

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  14. “And those of you who are indie published, you might think you’re out of this fight, but you’re not. If you sign with Kindle Select, you’re agreeing to a non-compete clause. If you make a movie deal and you don’t read the contract, you will probably sign a non-compete clause.”

    Right now, a movie deal is so far beyond my imagining, I’m not concerned there. But trust me: if one came along, I would have a good IP lawyer handle the contract for me. And I would send him links to this post and a number of yours and Dean’s and Passive Voice’s posts and say, “Tell me how we’re going to deal with these issues.”

    Until then, I kinda feel like Edward said it better than I could: “In the last year I’ve gone from ‘wow, I wish I could sell this book’ to ‘I really don’t want to have to deal with all the ways a publisher would try to screw me if I sold them this book’.”

    Reply
    • Good thoughts, Martin. By the time you get one of these deals, you might be far enough down the road in understanding this stuff that you can assist the attorney in finding your own way to deal with them. That’s why this business stuff requires constant study. It’s dry, but valuable.

      Reply
  15. Kris, in that case any contract is a non-compete clause since if I sell a novel to Penguin I can’t turn around and sell the same novel to any other company. They’d be pretty ticked if I then sold it to St. Martin.

    I’m not arguing for Select for anyone who doesn’t like an exclusivity clause. If you don’t like Select, don’t sign up for it. But it doesn’t keep me from selling my other works where ever I want which is the point of a non-compete clause.

    Reply
    • JR, you are confusing apples and trees. Amazon is a bookstore. Just one. No more. And it is now telling you, the producer of goods, that you cannot sell your product in any other bookstore, even though Amazon did not help you produce that product or has any other say in that product.

      When you license a book to Penguin, they have a financial interest in that book. They bring it to market. It is fair to ask that you do not let another company bring the exact same book to market at the same time. That’s why contracts exist, so that both sides have protected their investment in the product.

      When Penguin tells you that you cannot bring a different product to market through Bantam, then Penguin is crossing a line–the same line that Amazon is crossing when it tells you that you cannot market your book to other stores. Penguin has no investment in the new product, so they have no right to protection or even consideration in this matter.

      You signed the Kindle Select contract, limiting your sales to a small percentage of people worldwide who shop at Amazon. That’s like only marketing your clothes through Target. That’s fine, if that’s what you want to do, but unless you’re a big name designer, it probably won’t benefit you in the long run nor will it help you in the long run.

      I know all you Kindle Select people think it’s just great. But I have only seen a few look at this from a true business perspective, which takes into account your entire career, which spans over decades, not months. And from that perspective, the more I look at Kindle Select, the less benefit I see.

      And now, as usual when I bring up Kindle, I am getting flooded with posts about it, when that’s not the point of this post. So I am cutting off any Kindle discussion that does not pertain directly to this topic.

      Reply
  16. By the way, I have not a regret in the world about signing up for Select. That probably has something to do with all the sales (not giveaways) that I have done since and the money in the bank. I’m funny like that.

    I have no reason on earth to think that Select is “horrible”. It isn’t for me anyway.

    Reply
  17. Kris, looking at this in animal training terms shines a bright light on what is happening in the traditional publishing industry. When a trainer is working at changing an animal’s behavior, the animal will engage in increasingly negative behaviors as the change is impressed upon it in an attempt to get its way and go back to the old behavior. Trainers call this increased pressure and bad behavior an “Extinction Burst”.

    Kids do it too. It’s called a temper tantrum or a excessive crying and whining in the hopes that Mom will give in.

    Therapists also recognize increasingly nasty behaviors and force to resist change by patients. I am not sure what they call it, but it is a recognizable aspect of any change implementation.

    The important thing in all three cases is to stand firm against the behavior until the desired behavior is achieved.

    I think publishers are going through something very similar. As change is thrust upon them, they try harder and harder to maintain control and keep things in their comfort zone. Unfortunately business doesn’t have loving or tough love trainers (writers) that will reward the new, desired behaviors and ignore the undesired behaviors. Although, now that I think of it, industries do have business consultants. Some are very good at employing a carrot (reward) for moving toward the new desired model. Probably, though, what will happen is that the publishing houses will go to the new model kicking and screaming and ending up much worse for the wear, not to mention having sullied their brand.

    I am having a really hard time trying to see why I should go for a traditional publishing model. It feels more like egoboo at this point than any good business model. But I am still watching.

    Thanks for a tremendously raw look at an important business issue.

    Reply
    • Thanks for the analogy, Thea. I hadn’t thought of that, but it’s really apt. I do know it’s human nature to get vicious when something you had (or power you had) gets taken away from you. Still, I’m taken aback by this. I guess I’m more of an optimist than I thought I was. I like to believe the best of my colleagues, not the worst. [sigh] And I do think there are uses for traditional publishers, but I will deal with that in six months, after a few things get settled in my career, and I can possible talk about them…

      Reply
  18. I had to grin when you brought up the airline industry, Kris. And nod in agreement at Laura’s comment about it, too.

    A number of years ago (before I got married and had kids), I earned a private pilot’s license. I used to fly myself all over the place: back home for my buddy’s bachelor party, to Pittsburgh for the weekend, to my then-girlfriend’s parents’ hometown to visit them, you name it. Every time I used commercial air, I cringed at how obnoxiously annoying, insulting, and inefficient it was (primarily because of the security theater in airports – and no, none of that adds a damn thing to the safety and security of air travel). I still do. I can’t afford to fly myself around now (general aviation gets pricey), but Lord knows I would in a heartbeat if I could.

    Of course, the problems in aviation are more the fault of the federal government than the airlines. If you want to talk about a fascist industry, air travel is IT.

    Publishing, by comparison, has no oppressive regulatory scheme in place to screw up the works for them – they’ve apparently managed that all on their own. Which makes it all the worse. Fortunately, there’s now a general aviation equivalent for writers to take. Except it’s a lot less expensive than GA. :)

    Reply
    • Thanks, Michael. That’s true. It is cheaper to indie publish than it is to fly your own airplane. And fewer people will get hurt if the writer is inexperienced… It used to cost about the same though. Which is why so few writers did it in the old days…

      Reply
  19. Another great and timely essay, Kris. After reading a number of these, I’ve come to understand something about our (the writers) contribution to these situations. No, I’m not talking about the lack of spine (though there’s plenty of that), but the SYSTEM, which falls into a category we’ve seen in other places.

    It happens every time one of two parties is involved repeatedly as a professional in a certain transaction, where the other party is an amateur. The pro knows all the ins and outs, the traps and escapes, but the amateur is doing this for the first time, or perhaps a few times. In this case, I’d venture to say that 99.9% of writers have not been involved in as many as ten contract negotiations in their whole life, while the publisher or agent may do ten of these a day.

    In other similar circumstances, the solutions all involve the amateur somehow engaging professional help on their side. And that can be limited by the expense of that help. So, your blog is that great exception, a place where any writer can benefit from the experience of you and all your network of contacts. And it’s not expensive!

    Which is why I’m always recommending to my wannabe writers, my students, that they become regular readers of your blog (and Dean’s) and that they make a contribution so you’ll be encouraged to continue your service.

    In a small but significant way, it may help even the odds a bit between the pros and the amateurs.

    Thank you, again.

    Reply
    • Very good points, Jerry (Gerald). In the past, writers relied on their advocates, with mixed results. (I think the Mario Puzo contract under dispute is a failure in the 1960s of his advocates, whether lawyer or agent, I’m not sure.) Very few people published this kind of information. You had to search for it. Now it is available if you’re willing to look for it, and easily available on the net. So that’s a welcome improvement, particularly when the agents have forgotten their job as agent/advocate and have become something else (I don’t even have a term for it). The IP lawyers, who mostly didn’t exist 40 years ago, are now getting a lot of business, and are often quite stunned by what they’re seeing in publishing contracts–harmful stuff to the writer. So I do what I can, and so does Dean & the Passive Guy, and a bunch of others. I know it’s tough for amateurs, but they can now become educated amateurs before they sign anything.

      Here’s the other thing about contracts, everyone. They’re not perfect. Not for either side. If they’re negotiated properly, both sides give up something important. Plus both sides will miss something. If you go for perfect, you’re not going to achieve it.

      Thanks again, Jerry.

      Reply
  20. Just a clarification. KDP Select has only a clause against competing electronic versions. It explicitly states that other formats, paper or audio, for instance, are not covered by KDP Select’s non-compete clause. That means that I can build a paper copy of the book with Amazon’s own CreateSpace and it could be purchased by the end user through Barnes and Noble.

    So, while this is a non-compete clause, it is fairly limited in scope and in time (90 days). It seems to be a good way for an unknown writer to gain some visibility that will hopefully translate into sales of future works. It is a non-compete clause that in some situations can give the writer a strategic advantage at the price of tactical disadvantage.

    Reply
    • Yes, I know, Rick. It’s only electronic, but it’s still a non-compete clause. If the writer understands what he’s giving up and believes that it’s worth his while (although I seriously can’t see why, given how small the Amazon Select base is) to give up all other worldwide electronic markets, then it’s the writer’s choice. Not a choice I would make because there’s no benefit to it besides a very short term potential advertising bump which usually doesn’t happen to most writers, but it’s always the writer’s choice.

      With all the analysis I’ve done, I can see no benefit to anyone from Select. Amazon is losing money on it, writers are losing money and audience in it, and readers have to pay $79 to get it, for benefits they can get without Select. Plus the Select membership is much, much smaller than anyone initially thought. So not only are Select writers going to Amazon only, they’re going to a small subset of Amazon’s customers only. Rather silly. (And yes, I know, Amazon is doing this to get marketshare. Select is a loss leader. DO NOT come back and explain Select to me.)

      Reply
  21. Great article, Kris, as usual.

    After I read your post I dug a little more into contracts, both in the US and my native Germany. Is it correct, that you grant your rights (whichever ones you give them) for the life of the copyright to the publishing house?

    Is that just one of those “We have always done it this way” kinda deals or is there a sound reason behind it? Because right now, that doesn’t make sense to me …

    Also … I haven’t read anything about these non-compete clauses in German contracts, so that is a good thing :). But at least I know they exist and can look out for them, whenever I finally get published somewhere …

    Reply
    • Frank, contracts are not for the life of the copyright unless they’re a bad contract. Every contract has a termination, and right now, in traditional publishing in the US, it’s usually based on sales. (If sales go beneath a certain number, then the contract is void.) The net effect of some contracts, especially for bestsellers, is that this sales clause makes the contract last for the term of the copyright.

      All of my German contracts, indeed all of my foreign contracts, are actual licenses, for five to ten years from publication. So if I sell to Germany Publisher A, German Publisher A has ten years to continually publish the book, with the right of renewal at the same or better terms if the book is selling well. The renewal isn’t automatic. If I hate German Publisher A despite good sales, I can turn down any offer and go to German Publisher B after ten years, or just pull the book off the market. My choice.

      I think all book contracts should be like that. I won’t sign a US book contract any longer, with all the shenanigans going on in the publishing industry, that is terminated based on sales or money. It will be a license of some kind.

      Reply
  22. “I too wonder why it’s so hard for writers to defend themselves contractually.”

    I’d say fear and desperation, at least for new writers. Until recently you got a trade publishing deal or nothing (unless you were willing to try print self-publishing), and they were so desperate for that first contract that they’d accept it on any terms in order to ‘get a foot in the door’. After years of rejection any sign of interest looked good even if it would be bad in the long term… similar to what I’ve read about abusive spousal relationships.

    Now we know that if we have a book marketable enough to get a trade publishing deal we have a book marketable enough to make a decent amount of money when self-published, so anyone in that position has other viable options. A few years ago most didn’t.

    Reply
    • “Now we know that if we have a book marketable enough to get a trade publishing deal we have a book marketable enough to make a decent amount of money when self-published, so anyone in that position has other viable options. A few years ago most didn’t.” Exactly, Edward. That makes all the difference. Publishers already know this, but they’re gambling that most writers will never figure it out. I had a traditional publisher tell me that 95% of writers will never take advantage of the new world of publishing in negotiations for a new contract, let alone indie publish a book. Sadly, I think he’s right. I’m trying to change that.

      Reply
  23. Since you’re once again (and rightly so) on the subject of contracts, let me offer a word of caution to those who enter contests in hopes of establishing some credentials.

    Our local daily newspaper runs a short prose (fiction and non-fiction combined in one category) contest each year. Winners receive a monetary prize and publication in the newspaper’s monthly seniors magazine (circulation 30,000).

    For the first time this year they added a clause to the contest rules: (I’m paraphrasing because I threw out the contest notice) We reserve the right to first publication of all submissions, whether or not they are winners.

    I don’t know whether or not such a clause is enforceable, but I sure didn’t want to be the test case should I self publish my non-winning entry at some future date. The way newspapers are going these days (and this is part of a large chain), who knows if Rupert Murdoch will be sitting across the desk when it comes that time.

    I’m sure it could be argued that submission to a contest with that as a clearly stated rule, would constitute first publication rights to the story. I’m not sure what the compensation would be (a contract isn’t valid without compensation), but some sharp lawyer could probably invent something.

    So, watch the wording of contest rules. The demon spawn from hell lurk there too, and seem to be gaining.

    SWSNBN

    Reply
    • Great points, SWSNBN. Contests have often had terrible rules for writers, and worse, many contests make you pay to enter. So you pay to lose all your rights. I don’t know if that particular clause has been enforced in a court, but some of the other contest rules have, and never for the writer. So thank you for the warning, and I hope folks heed it.

      Reply
  24. Oh dear, you really picked a hot topic Kris. I’ve spent a lot of time talking to writers, and it is amazing how many say, “But I don’t have any choice.”

    As to the Book Publishers trying to hold onto their Monopoly, the Record Publishers have been trying the same thing. I don’t know if you’ve heard of Courtney Love, but she gave a speech, and it is worth reading. The formatting is a little rough, but stick with it to the end, and try not to cry.

    Writers don’t look at Amazon, Apple’s iBook Store, and the Traditional Publishers from the right point of view. I’ve been trying to come up with an explanation which would make sense to everyone, and I think that I’ve now got one, or rather two. That I had to come up with two probably proves that I’m sexist. Sorry folks. But here they are.

    The Kitchen Baking Explanation
    If you bake, you’ll understand this one. Happens I like making cakes myself. You’ve got a kitchen, with a stove, pans, measuring tools, your baking supplies. You make up your mix using your tools, put it in the baking pans, cook it in the stove, and remove it to cool when it is cooked. Publishing is the spoons you used in baking. Just the spoons, nothing else. Your book is the cake you baked.

    The Home Renovator’s Explanation
    If you work on your house, you’ll understand this one. Happens I work on my house as well. You decide to build a bookshelf. So you buy the wood and fasteners. Carefully you design and build a bookshelf to fit beside your bed, stain it, lacquer it, and using a screwdriver from your toolbox bolt it to the wall. Publishing is the screwdriver you used to install the bookshelf, and the new bookshelf, is your book.

    In both analogies Publishing is a very small, and relatively unimportant portion of the creation of your book. The exact means used for Publishing can vary. Traditional Print, eBook only, Kindle Direct, iBook Publisher, Independent Press, etc.

    Publishing is a tool. Like all tools it should serve the writer. If it doesn’t, then it needs to be fixed.

    Wayne

    Reply
    • Exactly, Wayne. Tools work best when used properly, not indiscriminately like so many writers use publishing. :-)

      Reply
  25. Thank you so much for this blog post of warning. It really makes me believe in myself more as a writer. I realize that I can be a publisher and not get trapped into evil trad publisher or media (etc) contracts. And thanks to your advice, if I ever do have to deal with contracts, I’ll know how to approach it from a SAFE perspective! Thanks again, and I’m seriously dedicating my next novel to you and your husband Dean. Without advice from you two I wouldn’t have a single eBook available for purchase by now. I am so grateful and someday hope to have the means to be able to donate tons and tons to your blog posts and more! :)

    Reply
    • Thank you, Suz. Much appreciated.

      Reply
  26. Oh … so I probably have read that wrong then in regards to the length of contract. But if sales are a stipulation for the end of the contract … what about ebooks? Aren’t they pretty much “in print” perpetually?

    As for the German contracts … I think there is a difference in contracts between what you as an American author get for the translation rights and what I as an author writing in German would get.

    I saw a model author contract, issued by I think an author organisation/union over here. And if I read that right, it said “contract is for term of copyright, as specified by law” – which in turn means “life + 70 years”. But I could be way off base here (given my experience in such things, this is totally likely :), I’ll have to check that again more carefully …

    And yeah … about the “I think all book contracts should be like that. I won’t sign a US book contract any longer, with all the shenanigans going on in the publishing industry, that is terminated based on sales or money. It will be a license of some kind.”

    Common sense dictates this … I was kinda surprised that publishing contracts aren’t for a certain length of time, but rather by some nebulous, hard to prove thing like sales or money.

    Reply
    • You got it, Frank. With e-books and the low threshold for sales (usually) in contracts, books can be in print for the entire term of the copyright. That’s why the basic contract has to change.

      I should not be offered a different contract than you are as a translated work–except that–mine will be for a previously published work and yours probably won’t be. But otherwise the terms of the contract will be the same. I don’t even know about German author unions, so I can’t comment about that.

      We’ll see how the negotiations on my various upcoming contracts go. One company turned me down flat on a license. They asked why they would do that? I asked why wouldn’t I do it? We hit an impasse. I walked.

      Reply

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