E-rights Update

February 8, 2013

Over the past few years, the popularity of e-readers, EBooks, iPads and tablets have increased dramatically.

The Final Report to Government by the Book Industry Strategy Group (BISG) in September 2011 confirms this pattern.  Once Australians finally decide to adopt new technologies, the take-up-rate is very rapid.  Since the BISG, the Government set up the Book Industry Collaborative Council (BICC) in June 2012 to assist with implementing recommendations made by the BISG.

So how are illustrators and authors faring in the brave new world of ‘e-rights’?

Industry initiatives

The Australian Society of Authors (ASA) acknowledges that industry practices concerning how e-rights are dealt with in publishing agreements are ‘still evolving’.

The ASA continues to be involved in the BICC and has published a Model E-Publishing Agreement template for digital only agreements.   This template contains the industry recommended standard terms for ‘fair and equitable’ e-rights agreements, including the minimum recommended royalty rates for digital only formats.

Issues for negotiating e-rights agreements

While industry guides are helpful, illustrators and authors still face obstacles negotiating e-rights clauses in publishing agreements.  It can be particularly difficult for illustrators, who are often ‘asked’ to accept as a fait accompli the terms that have already been negotiated with the author.

It pays illustrators and authors to be extremely clear about the formats in which their works are to be licensed electronically, the mechanisms for calculating royalties and the information the publisher will be required to provide in royalty statements as these areas differ dramatically from traditional publishing agreements.

One practical tip is to separate e-rights from printed formats and deal with them in a separate e-rights licence agreement.  This helps to avoid confusion from the use of terms which no longer apply to e-rights, such as the concepts of ‘subsidiary rights’ or concepts that need to be modified such as ‘out of print’.

The term ‘subsidiary rights’ has historically covered all residual formats (such as performance rights, film and TV rights and electronic formats) that were outside the scope of the ‘primary rights’ for printed hard copy and paperback editions.   Subsidiary rights are not relevant in an e-rights licence.

Illustrators and authors often receive ‘push back’ from publishers when attempting to negotiate different terms to the standard terms used by publishers and this may include pressing for additional information to be included in royalty statements. 

Seek as much information as possible in royalty statements in in addition to the ASA Preferred Inclusions on Royalty Statements set out in the Model E-Publishing Agreement.  Additional information, such as the total number of copies sold in numerous formats can be helpful when monitoring compliance. 

Practical tips

 -  There should be a precise description of the electronic or digital formats being licensed including by reference to the application or way in which the work will be published (e.g. on an eBook reader or application for use on a tablet) as different royalty rates will apply

-  Short term licences of no more than a few years should be used for electronic formats

-  Copyright should remain vested in the author or illustrator with a provision that when the licence ends or is terminated all rights revert back to the author/illustrator

Royalties and the mechanisms for calculating royalties can vary dramatically depending on whether the agreement is for electronic or digital formats, a combination of print and electronic formats and the model used (e.g. % of the list price or a % of net receipts where distributors or ‘e-tailers’ are involved)

It can be far simpler and easier to deal with e-rights using a separate e-rights licence agreement and to exclude e-rights from any existing agreements that are for printed formats only

The ease of production of e-books should go hand in hand with an ease in reporting royalties.  The ASA Model E-Publishing template recommends a quarterly reporting period with statements provided within one month of the end of each quarter;

Re-work or remove definitions from traditional publishing agreements if they are used in an e-rights licence where these concepts no longer apply (such as ‘subsidiary rights’)

Ensure that e-rights agreements meet the minimum industry standards published by the ASA (for example, advances are still recommended for e-formats) and obtain your own advice.

Keep a close eye on how your work is being used

Policing how your work is being published in different formats can be time consuming.  However, it can pay authors and illustrators to keep a very close watch.  The following practices have been discovered by an illustrator:

  • publications which do no include a copyright notice accrediting ownership of copyright by the author/illustrator;
  • publications of eBooks without prior permission from the illustrator/author
  • publications of eBooks without any agreement in place covering electronic formats;
  • publications of eBooks without any payment of royalties to the illustrator/author
  • removal of a cover illustration with a replacement copy to attempt to avoid the obligation to pay the illustrator;
  • allowing related or associated companies to publish titles using a replacement cover image to avoid the obligation to pay the illustrator.

Successful negotiating does come down to managing the relationship.  Illustrators may take some heart from knowing that an Australian illustrator has been able to negotiate with overseas publishers for separate e-rights licenses on favourable terms and to recoup unpaid royalties for breaches of old (paper based) agreements where the publisher ‘inadvertently’ published the work in un-licensed formats.

by Andrea Allan


agreements   Copyright   digital assets   electronic material   licences   rights

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