Business Musings: Then And Now
Recently, Dean told me about a conversation he was having on Facebook with a group of writers who, in the 1990s, shared the table of contents in an anthology featuring stories about the X-Men. Apparently, that anthology has just gotten an audio edition, and one of the authors in the anthology was thrilled about that.
Then Dean threw some cold water on the excitement. Who’s getting the royalties? he asked. No one knew.
Yes, the project was work for hire, but the writers weren’t paid a flat fee. They were paid an advance against royalties, for all forms of the book.
Dean hadn’t heard about the audio edition ahead of time. Nor had the other authors. I’m pretty sure the writer who announced it just stumbled on it. And once Dean asked the question, the others began wondering as well.
This project—twenty years old—has a somewhat tortured history. It was packaged by a packager so notorious that when he died unexpectedly, the people who had worked with him weren’t upset about his death at all. In fact, when a certain sf convention tried to hold a memorial for him, they couldn’t get anyone to speak at it.
This packager had lied and cheated and abused his writers so badly that they had nothing kind to say about him, even if they were the type of people who would have been inclined to make nice after a death. He stole and embezzled and sold his companies—to himself, sometimes—and managed to always come out smelling…okay, I guess.
When he died, his financial affairs were such a tangled mess that I heard about the troubles the estate had untangling them. I’m not sure how that ended up.
But here’s the thing. X-men is part of Marvel which is part of Disney. Someone still believed they had the rights to that anthology, and could license it in audio. That audio money probably went straight into licensor’s pocket, not realizing that the authors had contracts that stipulated royalties and not a flat fee.
With the arrival of the audiobook came the realization that the book is still in print, which meant it’s still earning money. I’ll wager, although I haven’t checked, that it has an ebook edition (which it didn’t originally have). All of this means it’s been earning royalties steadily for twenty years, which, at least in our household, have not been paid in (ahem) twenty years.
Does that mean Dean and the other writers are owed millions? Naw. Probably not even thousands. Maybe a few hundred each maximum. But that’s nothing to sneeze at.
And therein lies a dilemma for writers. Do they pursue those few hundred dollars? Do they hire an attorney to figure out who actually is exercising the rights? Or do they just shrug and say, Them’s the breaks, and move on to other things.
In the past, them’s the breaks was the best option, particularly since you could get blacklisted for speaking up. Agents usually didn’t fight for their writers, either, preferring to do business with slimebuckets like that packager in the future rather than protect the writers.
The real key to handling a mess like this one is to be an asshole right from the start. Which means paying attention. Noticing when the royalty statements stop coming in, then getting loud about it the first time one got missed. Now, with social media options, there are a variety of ways to get loud. If no one answers your letters (certified and emailed), then talk about the problem on social media, and tag the offending company. That usually gets a reaction right away.
Honestly, though, this post isn’t about how to get the money from someone who screwed you (and in this case, some heir of the slimebucket or the IP holder or someone else who inherited the problem).
This post is, as its title says, about then and now.
A few weeks before this debacle surfaced, I wrote a sticky note for my pile of possible blog topics. It says, succinctly:
Old system = make $$ for others. Pittance for you.
New system = make $$$$$$$ for you, and some for others.
I’ve been thinking about that in the connection with licensing for writers. If we maintain our own intellectual property, and if we publish the work ourselves, we own every part of that copyright. We license it to various companies which then make some money off the derivative product they produce.
Most writers are aware of how this works in connection with movies or film. The writer writes the book, and then gets paid for the movie. But the book remains in print, and selling (with the right contract). The writer gets the book money and the movie money.
But as we’ve seen with all of the licensing posts, the smart writer—whom we will now call the IP holder—gets extra money from all of the licenses. Including (for example) an anthology with stories by a variety of writers, licensed to a different book company than the IP owner has, then licensed to an audio book company, and licensed to an ebook company, maybe licensed to foreign publishers for copies in various languages other than English.
And voila! the original IP now has one derivative work (an anthology), which in turn, has its own derivative works (audiobooks, ebooks, books in different languages) all of which earn money.
Because the IP owner has held onto all of her copyright, and only licenses the property, she’s making a goodly chunk off of all of those derivative works, as well as the original work.
And what about the writers of the short stories and the translators and the narrators? They all make a smaller sum of money off that tiny bit of the property they worked on. They might’ve made a few thousand off the work they did, with royalties and new derivative works (like audiobooks) giving them an occasional hundred or two hundred dollar boost over years.
In other words: The IP holder is making a large fortune and in smartly and properly licensing her work, she is also helping other artists make money.
And let’s have one tiny moment to acknowledge the benefits of this to the IP holder (besides money). Her work gets discovered by audiobook consumers, by readers in other languages, by ebook readers who happen to like the work of one of the authors in that anthology. That discovery leads the reader to find all of the other work by the IP holder, making a new fan who buys not only the original work of the IP holder, but all of the derivative works (and cool swag) that the fan can find. From pens to t-shirts to necklaces, from YouTube shorts to book bags to hats with logos, from video games to card games to board games—you name it and some fans will buy it all.
The IP holder has made connections, fans, and money from her IP, and it will continue earning for her as long as she maintains the copyright—and signs the right kind of contracts. (Please don’t ask me what those are. Look at this link and start reading the contract posts. Or buy the book I made out of those posts, Closing The Deal On Your Terms.)
The fact that you, as a writer and IP holder, can do that with not just one book, but with everything you’ve written, is what I find the most exciting about licensing, and why I’ve focused on it for the past year. As soon as I can catch a breath, which looks like March, I’ll be putting those posts together in a book, which will probably come out in time for the Las Vegas Licensing Expo in May. (See you there?)
But the one thing that’s missing from all of those blog posts is the succinctness of what has changed.
Now, if you’re a courageous business person who controls your copyright—your intellectual property—and signs good contracts (which leaves the Big Five/Four/Whatever traditional publishers out and a whole lot of small ones too), then you can make more money than you could ever imagine.
That’s so different from twenty years ago. Back in the day, the then of this post’s title, writers had no choice but to sign those bad contracts from traditional publishers.
Think about this: the publishers paid a relatively small amount—four to five figures—plus some royalties of maybe 6% of the cover price of the book (which most publishers found a way to avoid paying) to control all forms of the book that could be imagined. I never signed those contracts, but writer friends did, and more writer friends do now, because the contracts have gotten worse. Much worse.
So…on a property that does not become famous, a writer gives that property up to a traditional publisher for maybe $5,000 or $10,000 total. But that property—a not-famous property—could earn the writer millions over the lifetime of the copyright—if the writer published it herself and handled her own licensing.
And the nifty cool thing about the writer controlling her own property is that while she’s negotiating deals and writing more and earning as much as possible from this one piece of her entire oeuvre, she’s also making it possible for companies from clothing manufacturers to cover artists to gaming companies to make money off the property too. Those companies, by the way, will pay salaries and hire other artists to create derivative works from that property.
So the earning, even if it is in small amounts, will spread across hundreds of people over the lifetime of the property.
I know that because I’ve seen it happen hundreds of time with licensed properties that Dean or I wrote for in the 1990s, when we were writing our way out of debt. That X-Man anthology is but one of many licensed properties that we had a small part in that are still earning money for the IP holders.
We’re just not the IP holders.
And I have to say, kudos to whomever is smart enough to know that an X-man anthology will sell in audio book. Whoever is keeping that property alive for the IP holder. That’s how it should work.
The way it should not work is the way that traditional publishing and traditionally published writers do it. The traditionally published writer in 2020 licenses her entire copyright, through clauses she doesn’t understand, in 20+ page contracts that her agent has negotiated “for” her. The agent really hasn’t: first of all, most agents aren’t lawyers and legally shouldn’t negotiate the contract…but it doesn’t matter. What they actually are doing is looking at the payouts, a few clauses here and there, and the option clause for the next book.
All those other horrid clauses, the ones that actually take copyright from the author? Well, those stay in…along with one that gives a piece of the copyright to the agent.
That’s how we get to…writers make a tiny bit of money on their original work while others earn a fortune off it.
If I want to play in the X-Man universe as a writer, I know the rules: they own the copyright. They are in control of the property. I’m playing in their world. I’m fine with that.
But when someone takes all of my original work and pays me a pittance for it (because they know how to sell it or they have prestige or some other nonsense), then I have tons of trouble with that. Especially since traditional publishers rarely exercise all the rights they’ve licensed. So all that money, all those opportunities to get new fans, they never happen because no one maintains the IP.
Licensing your work to a traditional publishing house in the U.S. (and the U.K., sadly) follows the contract above. The writer always gives up oceans of money in exchange for some money. And also gives up copyright and clout and the possibility of new fans and anything else positive you can think of.
Yet I watch writer after writer after writer after writer do it over and over and over again.
Just remember that the idea that I fit onto a single sticky note:
Old system = make $$ for others. Pittance for you.
New system = make $$$$$$$ for you, and some for others.
The old system still exists. It’s really good for the people who work in the old system as editors, publishers, and agents. It sucks for writers and creators of original material.
You want to publish things yourself. Suck it up, folks. Learn how to do the work and then do it. Stop worrying about prestige. (What is prestige, anyway? It differs according to everyone you talk to.) Do what’s best for your lifelong career.
You want to earn money for the rest of your life? Then stay in the new system and avoid the old.
Do the hard work. Become a business person and a writer. And ten years from now, you’ll still be in the writing and publishing business, while your traditionally published writers friends can’t sell another book and complain bitterly about it in the bar at conventions where they might sit on a panel.
Which future do you want?
I know which one appeals to me.
Speaking of the licensing expo and all of the licensing stuff that we’re doing, we’ve added one workshop into the mix for people who don’t know how to approach licensing. We’ll help you wrap your mind around how to think about it. (We did a version of this at the Business Master Class, and folks loved it.) Dean explains more on his blog.
Speaking of licensing, I make use of these posts in a variety of ways. I eventually put them in book form, for example, and then make the books into audiobooks (or I will when I get a chance).
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“Business Musings: Then and Now,” copyright © 2020 by Kristine Kathryn Rusch. Image at the top of the blog © Can Stock Photo / jirsak.
This reminds me of the doctor who sued S&S for selling an ebook version of his book, only to discover after the suit is filed that S&S had sold that division to Wiley like fifteen years ago.
Sadly, I can’t figure out which packager Kris means out of half-a-dozen candidates, all of whom did all of the things she describes… and all of whom were just as well liked/respected at conventions.
One other thing about “packagers” is that their business model is “agent with an actually defensible ownership interest”… except… about 75% of the time the “work for hire” contract typically offered by packagers is for works not actually eligible for work for hire treatment. (It was actually worse in the 1990s.) Contrary to the “received wisdom” in New York — because the 1909 Copyright Act didn’t do this — under the 1976 Act, “works for hire” have to fit inside a definition in § 101 or they’re NOT works for hire.
From what you’re saying here, it sounds as though one of the most important – if not THE most important – thing creators should do is hang onto the original contracts. Without that, it can be difficult to go into courts and claim rights.
In fact, I’m pretty certain that, due to buyouts/mergers/bankruptcies/other stuff, many of the original publishers/anthologists really have no clue as to what rights they have, or you have.
I want to mention the Peggy Lee court case, that clearly established that any medium that didn’t exist at the time of the contract, could not be taken away from a copyright holder, without payment. Disney took it as far as they could, but lost to Lee.
BTW, all of Disney’s current contracts now require FULL surrender of all rights in ANY medium.
Better to publish that song/book/whatever by yourself, and license that use of it individually. You may not get Disney, but you’ll put yourself in a better place for future money.
Sure glad I ran into you at the beginning of my publishing career – and decided to go indie even before that from doing my due diligence on self-publishing blogs. I have nothing to untangle.
I have tons of stuff to do, but know some of the questions to ask, and where to go to start finding answers to the ones I don’t.
There is so much information available that I still wonder about newbies who have obviously, from their inquiries on FB, etc., done absolutely nothing – and expect other people to answer basic questions. I prefer to reserve precious reserves – people who occasionally will help directly – for things I’ve researched thoroughly and can’t answer.
BTW, thanks for your posts. When I’m ready for the next level, I’ll buy your books and be more organized about the information. Right now it’s the ideas being seeded deep in the brain; later it will be the implementations, and I’ll want the latest books.
Kris, are you familiar with the song Machine by Imagine Dragons? It’s a great accompaniment to this post (and they’re from Las Vegas!).
Thanks for another fortifying post.
I like Imagine Dragons. I’m not sure which song it is, but I’ll look it up. Thanks!
What got my attention was that this was done in the 90s. Which means that the ebook wasn’t included in the contract, and quite possibly the audio rights weren’t as well. So someone is selling formats they don’t have the rights to.
Most likely, yes.
I wonder if the (if applicable) copyright infringement would be an easier angle to pursue, legally speaking, than the specifics of the missing royalties.
It would be just as difficult, I’m afraid.
“Do the hard work.”
That right there is why so many writers won’t succeed. Doing the hard work means getting over their fear. Or even worse–their lottery thinking. It’s rarely ever sheer laziness that stops them.