With any commercial enterprise, there are at least two sides of any question to be considered. In the case of negotiating a publishing agreement, depending on whether you are the creator of the work or the publisher, you will have different goals and therefore different needs to be addressed in the contract. Likewise, whether you are able to achieve some or all of your objectives will depend upon your relative bargaining strength.
A typical publishing agreement will cover many issues. If the project is big and if a large sum of money is to be paid by the publisher, you can expect the agreement to be even longer. That being said, we shall look at some basic provisions that will appear in most publishing agreements from the points of view of the publisher and the author. Our hypothetical case involves a person ("A") who has written a novel ( or "the work") and has found someone ("P") willing to publish the work. However, if A were an artist or photographer instead of a novelist, many of the issues would be similar.
What Rights Will "A" Grant? The first major clause will involve the "grant of rights." Because A wrote the novel, she owns the copyright in it. In order for P to be able to perform any of the services which involve the "bundle of rights" owned by A (such as to print, publish, distribute and sell the novel), A must "grant" (i.e., authorize) certain rights to P so that P can perform these tasks.
However, to make it worth P's while, A will be expected to grant P "exclusive" publishing rights. The next question likely will be, over what territory will these exclusive rights extend? The publishing rights could be worldwide, or some smaller territory such as: the United States, North and South America, the European Union. Similarly, the rights could extend to the English language version only or include translations into other languages. The bundle of rights can be further subdivided considering whether P will be authorized to publish in hard cover only, or will P have the rights to offer the novel in paperback, abridged form, as a sound recording or in electronic formats.
What Are Primary and Subsidiary Rights? Basically, primary rights are those which the publisher intends to exploit directly and subsidiary rights are those which the publisher intends to license to third parties. Examples of subsidiary rights are the dramatization of the work; motion picture and television rights; commercial rights related to product merchandising.
What Is the Term of the Publishing Agreement? Most often the term of the grant of the rights will last as long as the copyright lasts, i.e., the life of the author plus 70 years. However, there will be built-in circumstances that can shorten the term for some or all of the rights involved. For example, the agreement can provide that P must publish the novel by a certain time period or the rights will revert to A. Also, embedded in the Copyright Act is the right of the author or her heirs to terminate the transfer of rights at a point between 35 and 40 years after signing the agreement or publication of the work.
What Will "A" Be Paid? Depending on her bargaining strength, A could receive an advance, a royalty based on P's sales, and a share in the exploitation of the subsidiary rights.
The advance would be against future royalties. In a slightly different scenario, if A was still to write the book, she might receive part of the advance upon signing the agreement and the balance when the manuscript was accepted by P. Because for any number of reasons the book may not generate enough sales to cover any advance, P is not likely to agree easily to a generous advance without having a great deal of confidence in what A can deliver.
Book royalties typically can be calculated either based on the suggested retail price of the book or on the publisher's net income. In either case, there will be allowances for returns and promotional and review copies. Royalties would not be paid until any advance had been repaid as well as any expenses that P charged A, such as an expense for the inclusion of art work. Moreover, the actual royalty paid could vary depending on whether it was applied against the sale of the hardback as opposed to the paperback versions of the novel.
A's share for the subsidiary rights would likely be calculated as a percentage of the revenues which P receives when it licenses those rights to third parties.
When Will the Novel Be Published? Generally, it will be solely up to P to make decisions about the time and manner of publication of the novel including how the book will be edited, it's title and the paper stock used. It will be up to P to print, promote, advertise and set the price for the novel. As a counter measure, A can likely require that P publish the novel by a date certain after the agreement has been signed, possibly within two years, or else loose its rights in the work.
What Else? This is just a sampling of what issues are covered in a publishing agreement. Other noteworthy items include ownership of the copyright; representations, warranties and indemnities by A as to the originality of her work; manner of accounting for royalties; options on future works; and non-competition.