Business Musings: Let’s Talk Real Business, Shall We?

Two weeks ago, I posted about agenting changes, and linked to a Hollywood Reporter piece about the new writer/agent relationship. Many of you had sent me that piece, because it is shocking in its happy talk about what is, essentially, a predatory scheme.

I promised you all three posts inspired by this piece. The agenting piece is the expected one, along with last week’s post about the value of IP.

This week’s post…well, it’s for those of you who understand business.

The one thing I didn’t mention from The Hollywood Reporter piece is how it starts. It uses the Netflix film Spiderhead as an example of a page-to screen deal.

Spiderhead is an adaptation of a George Saunders short story, “Escape From Spiderhead,” that first appeared in The New Yorker in 2010. Magazine pieces that become a movie or a TV show have occurred since movies and TV shows existed. I wrote a blog about the IP journey of a little article published in California Magazine in 1983, an article titled “Top Guns.” It’s now the subject of a legal battle…well, read it. And realize that the writer of the article, Ehud Yonay, profited from the first movie deal, because he signed a contract with California Magazine that did not prey on his movie rights.

What’s fascinating about Spiderhead, and the reason it led the article on publishing trends in The Hollywood Reporter is that, according to THR, something “revolutionary” happened. “Before the opening scene of the dystopian drama starring Miles Teller, Chris Hemsworth and Jurnee Smollett,” author Seija Rankin breathlessly writes, “the New Yorker logo [appears] on the screen.”

Hmmm. That bothered me and didn’t bother me. Just like watching the Apple TV series, Slow Horses, and noting that both Soho Crime’s logo and the logo for Mick Herron’s British publisher at the end. I was rather excited to see both publishers get credit, although I don’t know contractually why either of them did.

I have a sneaking suspicion that I might not like what I learn. Or maybe I will.

Because I’m of two minds about what I’m going to write in this post.

The two minds are, essentially, my writer brain and my publisher brain.

These days so many of us are writer/publishers. We own publishing companies that publish our own work. Sometimes we own publishing companies that publish our own work and the work of others.

Usually, this blog takes the side of writers 100%. Writers should get credit; they should own the intellectual property that they created; and they should get paid real rates for the work they sell to other companies.

But…

I also have owned several publishing businesses. I’ve worked for a few too. I like seeing that the businesses have fair contracts for writers, but there’s a stage where the publishing business can take “fair” too far.

We did, in the early days of Pulphouse Publishing, back in the 1990s. The rights we licensed from our authors were miniscule and did not include reprint rights or other auxiliary rights at all. In the earliest of early contracts, we didn’t even have the right to get a reduced fee for a reprint or foreign edition. We licensed one use for the Hardback Magazine, we exercised that single use, and that was all.

Which meant, when it came time to sell the business, we had nothing to sell. The books we produced, which were mostly limited edition hardcovers, had no reprint rights, no resale rights, no IP whatsoever.

Whoops. One of the reasons we had to repay so much debt was because we had made a mistake by being too generous with our authors, giving them all something they had never even asked for.

We rectified that mistake with contracts for succeeding businesses. Our contracts are among the most fair in the business, but they do reserve some rights for future projects, because without those rights, the business would have no IP.

As many of you know, I have a lot of IP and contract knowledge. I have been told many times that I would be a good agent because of it, even more times that I should go to law school so that I can do some good as an entertainment lawyer. Those comments always make me laugh.

Because even if I were interested in those things, I wouldn’t do them. I would be a good agent. I know how to do a rights-grab in my sleep, much better than most agents ever do. And as a lawyer, well, my job would be to protect my client.

The clients of entertainment lawyers are writers—yes—but just as often, the client is a publisher or a studio. Right now, without law school, I could create a credible first draft of a contract that would benefit a publisher, or one that would benefit a studio, or one that would benefit a writer.

Keep in mind, my friends, that the best contracts are the ones no one likes. The best contracts are compromises between two parties. Each party gets something and gives up something. Which means that good contracts have sections that each party dislikes.

Let’s circle back to Spiderhead, though, shall we?

Spiderhead was produced by Condé Nast Entertainment. When I saw that, it really caught my attention. Condé Nast—the publishers—have an entertainment company? That explained a lot.

And it showed how little I’d been paying attention.

Somewhere along the way, Condé Nast had rebranded itself as a global media company. Condé Nast Entertainment was launched in 2011. Condé Nast’s website says:

[Condé Nast Entertainment] extends the company’s reach through the development of original content across film, television, social and digital video and virtual reality.

According to The Hollywood Reporter, Condé Nast Entertainment hired its president, Agnes Chu, away from Disney+ …

with a mandate to be as proactive as possible with the IP from the magazine group’s legacy brands like Vanity Fair, GQ, Vogue and The New Yorker. Her (largely female) team … scours lineups for big- and small-screen potential, often bringing stories to the development marketplace before they’re published.

These deals, according to the article, will give Condé Nast more clout. Or as The Hollywood Reporter puts it:

A more prominent seat at the development table gives CNE more negotiating power to score big wins like the Spiderhead title card, which Chu hopes will strengthen brand identities for the magazines.

And it will give them that.

They’re not the only ones doing this. Vox Media is as well.  Vox just scored a large deal with Inventing Anna on Netflix, based on an article by Jessica Pressler. Here’s the throwaway line in another Hollywood Reporter article:

About a week after the article’s May 2018 publication, Pressler (and New York, which owned the rights to the story) received a few emails from people who were interested in adapting it for the small screen.

The writer in me screams about that little parenthetical phrase “And New York, which owned the rights to the story…”

The contracts with Vox must have been awful…or Jessica Pressler actually works for Vox and signed away any interest in those rights. I know that there’s been a serious fight with Condé Nast about who owns what rights, which has been going on since 2013. I tried to look up where it stands now, and it’s just plain confusing, which tells me that some freelancers are able to push back against the corporate rights grabs.

The Hollywood Reporter hints at the conflict in the agenting article with this little paragraph:

Yet the magazine writer’s place in such option deals remains murky, because staff and freelance contracts often give publishers first dibs to option the work in their pages on terms advantageous to the publication.

From what I can see, a lot of those “terms advantageous to the publication” go like this: For an extra $1200 to $5000, the writers give up all TV/film rights for at least a year or more. Which means that when the article is hot and getting a lot of attention, the global media companies own the rights, not the author.

If you want to know how I feel about that, read all the previous two blogs and damn near anything else I’ve written.

Now…let’s take a business step forward, shall we?

Because we’re publishers now.

I don’t want any of you publishers who publish people other than yourselves to become these icky rights-grabbing kind of people. So, I’m only going to talk with the companies that have grown out of one or two authors indie-publishing their own work.

There are a lot of companies like that now. WMG is one. I personally know of at least twenty others.

When we founded WMG, I made two rules. The first was that when it came to novels, WMG would only publish me or Dean. Why? Because I knew what would happen inside the company with the other employees if we bought novels from other writers, and those novels took off. The company’s attention would go to the other writers’ novels—as it should. Those novels would be earning the lion’s share of the income.

But we had founded the company for our writing, so I mandated that we would not sully that initial vision by publishing others. (That decision has a lot of other benefits, including keeping us from paying out a lot of money in royalties to people not ourselves.)

The other rule I had was that we would grow the company to incorporate things that are not publishing. Things like audio books and—oh, I don’t know— “film, television, social and digital video and virtual reality.”

We started to go that way, but the person we hired to handle our audio was not up to the task. (Which shouldn’t have surprised me. We were in small town Oregon, after all.) I really regret that we didn’t handle the audio part of our company well, but we were about six years ahead. If we had continued with my vision, we would have had an entire inventory for Findaway Voices and other places.

We didn’t.

I also wanted us to do some minor film production, like Suzanne Brockmann is doing. She’s making indie films that she funds through Kickstarter.

As I’ve blogged many times about licensing, the only limit we have now in our publishing companies is our imagination.

Oh! And time.

I could handle the audio books for our company. I have the training. I know what I’m doing, and in Lincoln City, we had the equipment and an audio room.

I would have to give up writing novels. It looks like Brockmann has mostly done that.

I don’t think that’s a viable alternative.

But…

Here’s what the Condé Nast and Vox Media part of these hideous Hollywood Reporter articles inspired in me.

Those big conglomerates are already thinking about various ways to turn their written IP (magazine articles and short stories) into other derivative works ( “film, television, social and digital video and virtual reality”) under their own logos.

That means they will own much more of the IP than they would have if they had used a standard magazine agreement.

As a writer, I want to urge you writers to be careful of the agreements you sign.

As a publisher, though, who owns a small company outright, who doesn’t license these kinds of rights to the short stories we license from other writers, who will never license these rights to other people’s short stories, you need to think about these things.

As a publisher who publishes my own work and my husband’s work, and who makes enough to keep a staff working full time as well as several contractors, I’m very, very inspired by this.

A title card for me, the writer, when I license movie rights is something I always ask for. I never thought to ask for a title card for my publishing company.

And I should, because it does, as Chu said, strengthen brand identities.

I am not there yet. And neither is WMG. But as I look at what these larger publishers are doing with their own IP, I can see a future for WMG.

It took Condé Nast eleven years to get to this point. I have no idea how long it took Vox Media, but I’ll wager the timeline is similar.

These kinds of companies aren’t built overnight. It takes forever to make licensing deals. Negotiations go on for months, sometimes years. Development takes even more time.

Companies like CNE have dedicated staff who handle the licensing deals. Some large companies, like Warner Brothers, have lawyers and other staff who handle licensing of a single property—like the movie versions of The Batman.

These are the kind of things that we as business people should be looking at for our businesses. We should think about ways to expand our IP, to get it in front of as many eyeballs as possible, and to ensure that it will have a life of its own.

Of course we have to make sure we have the right kinds of contracts. We can’t license away our IP for $1200 or $5000 when someone else could earn millions (like these CNE and Vox writers have). Nor should we become voracious rights-grabbing companies that take other people’s IP because those people aren’t smart enough to hire an attorney.

What I mean here is that we need to develop vision for our company. Big vision, the kind that imagines a lot of different licensing deals for each property. The kind of big vision that also guards our business and expands its brand identity by negotiating a title card for our publishing business as well as for our author name.

Is this pie-in-the-sky? Of course not. The one thing that decades of business training have taught me is this: If you don’t ask, you never get what you want.

I’m always surprised by the way that people respond to a simple ask. Sometimes they tell me what I want is impossible. Sometimes they tell me that “not even [insert Big Name here] gets that.”

Then I come back with, “I’ll beg [Big Name] never asked for it.” And usually, the person I’m negotiating with will pause, think for a moment, and then say, “Let’s see what we can do.”

Back to compromise. We’ll see what we can do. (If you’re no good at negotiation, believe me, it’s not as hard as it seems. Pick up my book, How To Negotiate Anything.)

I hope you understand me. I don’t condone how Condé Nast and Vox Media treat their writers. I want more and more writers to fight back against those contract terms.

But…the business side of me finds a lot of inspiration in the side companies that Condé Nast and Vox have set up. Companies that have now become strong enough to make some good deals.

Someday I hope to gain that kind of clout for my publishing business. But it takes time. It takes work. And it takes vision.

We’re not there yet.

But we will be.

Someday.

***

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“Business Musings: Thinking Like a Business,” copyright © 2022 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / nialowwa.