The right to publish a book isn’t the only right that authors can grant to a publisher or retain for themselves. Authors may also grant or retain subsidiary rights in the book. A subsidiary right is the right to publish or produce the book in other formats, such as e-books, audiobooks, films or television shows, and more. This post details some of those rights and gives authors and literary agents insights on how and when to negotiate those clauses of a book publishing deal.
In reality, it is often very hard for an author to retain these rights for himself or herself entirely. As such, the author may be more successful negotiating for a larger split in the profits from these rights.
Television and Film Rights
Any author in this day and age knows that there is just as much, if not more, money to be made in adaptations than there is in book sales alone. As such, authors generally want to retain as many adaptation rights as possible, and the publisher will generally propose broad language that grants them a broad right to sell all the adaptation rights.
In particular, movie and television adaptations have a strong potential to earn authors a lot of money on top of their book royalties. Because these adaptations have such high earning potential, most publishers will want this right. However, some authors are successful in arguing that they should retain this right, especially if the publisher has never licensed a book to a production company or network before or if the author is represented by a literary agency with connections to movie and television producers, studios, or networks.
An author with a skillful literary agent may be better poised to exploit these rights than a publisher with little experience in the film and television industry. Many reputable literary agencies have special agents specifically charged with exploiting the subsidiary rights of the authors represented by those agencies. That being said, reputable publishing houses often have similar employees who are specifically charged with exploiting the subsidiary rights of the books they publish. It is important for authors to discuss this topic with their literary agent and their publisher to determine what arrangement is best.
E-books, Audiobooks, and Other Formats
There is also a large market for e-books and audiobooks that can be easily exploited as a secondary source of income for authors. As such, book publishing contracts will also regulate whether the author grants or retains the right to exploit the book as an e-book, audiobook, or in some other format.
Audiobook services like Audible are eager to increase the size of their audiobook library and are generally willing to buy almost any published book they can. However, many large publishers are allocating resources to exploiting audiobook rights in-house. These publishers may demand that the derivative right in audiobooks be granted, so the publisher can produce the audiobook in-house and distribute it within existing channels. In such cases, it is likely in the author’s best interest to allow the publisher to do so. Alternatively, an author may be represented by a literary agency with expertise and experience in the area of licensing books to e-book and audiobook companies. In such instances, it may be in the author’s best interest to retain these rights, so his or her literary agent can exploit those rights on his or her behalf. It is important for authors to discuss this topic with their literary agent and their publisher to determine what arrangement is best.
T-shirts, bobbleheads, posters, trading cards, bookmarks, and stationary are all common items on the shelves of bookstores. Frequently, these items feature characters and trademarks licensed from popular books. The authors of these books receive royalties on the sale of those items.
Successful authors that have retained the right to license their characters and trademarks to third parties may seek representation by a licensing agency. Licensing agents have a role similar to literary agents in that they receive a portion of the profits earned on deals that the licensing agent locates and negotiates on the author’s behalf. Licensing agents have connections to retailers, designers, developers, and other merchandisers that are looking for the latest craze to put on their t-shirts, video games, board games, and other products. These relationships make the licensing process easier to execute.
Similarly, many literary agencies and publishers have in-house teams that are tasked with locating interested merchandisers and negotiating merchandise licensing deals on the author’s behalf. Others may rely on third-party licensing agencies. Authors should discuss this matter with their literary agent and publisher to determine who is best suited to exploit these rights in a way that maximizes the author’s potential profits.
Drafting Subsidiary Rights Clauses
From a copyright law standpoint, all these licensing opportunities are considered derivative works. The right to make an adaptation is known as a derivative right. Here is an example of a broad adaptation clause that most benefits the publisher:
Author grants Publisher the exclusive right to sell, license, and otherwise exploit the derivative rights in the Work throughout the world during the full term of copyright and any renewals and extensions thereof except as provided herein.
By using the broad term “derivative rights,” the publisher receives the right to exploit the book as a motion picture, radio play, television show, audiobook, theatrical play, and any other possible format. Thus, it would benefit the author to negotiate this broad “derivative rights” language down to more specific, narrower terms that exclude specific adaptations which the author hopes to exploit himself or herself. If the author seeks to retain certain derivative rights for himself or herself, it is best to explicitly state that in the contract. If the author and the publisher will split the profits obtained from exploiting certain derivative rights, it is best to also explicitly state that in the contract. For example:
Author shall retain the exclusive right to sell, license, or otherwise exploit the Work as an e-book and an audiobook throughout the world during the full term of the copyright and any renewals and extensions thereof except as provided here.
Author grants Publisher the exclusive right to sell, license, or otherwise exploit all other derivative rights in the Work in all other formats, excluding e-books and audiobooks, throughout the world during the full term of the copyright and any renewals and extensions thereof except as provided herein. All sums from the sale of these rights or materials produced under those rights shall be divided so that the Author receives fifty percent (50%) of the net amount received.
It is important for the author to negotiate who has control over these rights and what the author’s royalty will be. Typically, the publisher will seek the sole right to negotiate and sign contracts in regard to subsidiary rights. However, a skilled literary agent will negotiate terms more favorable to the author.
This series informs authors, literary agents, lawyers, publishers, and other interested readers about the basics of book deals. It provides tactics and tips to be used when negotiating a book deal. It consists of three parts that cover negotiating the following topics:
- Registering Trademarks and Copyrights
- Exclusivity and the Grant of Rights
- Subsidiary Rights
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About: DJ turned JD highlights the latest legal updates in the entertainment and media industries, intellectual property, the internet and social media. The blawg is compiled and curated by Bobby Desmond. After working as a radio personality, Bobby attended the University of Florida Levin College of Law in order to pursue an in-house legal career at an entertainment or media corporation. He has interned at PBS with America’s Public Television Stations in Arlington, VA and at AMC Networks in New York, NY. He graduated in May 2018 and passed the New York Bar Exam in July 2018.