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