Subsidiary Rights and Why We Keep Them

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Subsidiary Rights and Why We Keep Them

Meeting PinkiesIt is springtime here in New York, and as happens every spring, young hearts turn to thoughts of the Bologna Book Fair.

Or my old heart does, anyway. Every year, children’s books publishers and agents from all over the world gather in Bologna to buy and sell the rights to published and forthcoming books, to catch up with each other about trends, and to eat some truly excellent food. It is four days of constant meetings from nine to nine (some over drinks and dinner plates, true, but meetings nonetheless). From these meetings, many sales of properties are made to far-flung territories.

This can be a great benefit for a writer, the sale of individual rights to different countries. It means that the writer receives separate advances for each territory, and that each of those advances earns out on its own schedule. So even if the publisher in the US stumbles and the book does poorly here, it may still sell well elsewhere and the writer will still earn royalties. These separate income streams make it easier for a writer to actually make a living from writing.

Which is why we hold on to foreign and other subsidiary rights when we sell a project to a publisher. It can mean taking a smaller advance up front, or the outright rejection of an offer, and it can make us unpopular with certain publishers. Why? Because the publisher, of course, wants these rights, too.

When the publisher controls those rights and sells a foreign license, the advance for that foreign sale—and any royalties paid—are first applied toward paying back the publisher for the advance given to the author. Conceivably, a book could earn back its advance for the publisher without ever selling a single copy in the US. Good for the publisher, not so good for the author.

Not long ago, I had a conversation about this very subject with an editor, in which she explained her position. Namely, that an author should want the publisher to keep rights, because that makes it “easier for the publisher to earn back the advance and makes the writer more profitable for the house.”

Which sounds nice on the face of things, but has all sorts of buried sentiments and assumptions lurking within. Let’s unpack that sentence, so that we can see how very wrong-headed it is.

For one thing, the implication is that the publisher will be happy with the author and continue to publish that author happily for the next forty years if the publisher earns back its advances by recouping the money through foreign sales.

But that’s just not true. Foreign sales matter almost not at all to a publisher’s decision to publish future titles by an author. If the author’s books bomb at home and continue to tank domestically, while the publisher will be happy it recouped its advance in the foreign sales, it won’t feel any love for the author. The publisher will have covered its bets on the author, but it will also likely stop betting on that author at all. And the advance, while it may be large, is a mere fraction of the cost of bringing a book to market. So collecting some foreign advances (typically smaller) will do little to offset the actual cost of publishing a book.

So let’s say the publisher fumbles the publication in this market, but the book is a hit in France—well, the entity that most benefits is the publisher, not the author. Which, to that editor’s mind, makes perfect sense. The publisher, after all, gambled; why shouldn’t it earn back its money first?

But why should the publisher expect that the author will support the publisher? If anything, it should be the other way around, though even that is a questionable proposition. Instead, the author should find a way to make a living by exploiting as much as possible the rights to his or her work. And the publisher should pay advances it feels it can earn back via sales in its home territory.

One might also ask whether the publisher is even the best entity to most effectively sell those rights? Few—if any—publishers push hard for the sale of titles after a book’s debut year. The publisher’s list grows by dozens of titles each season, and those books require attention, while the backlist languishes. And the publisher’s subsidiary rights team? They collect their paychecks whether they sell a book or not. The success or failure of an individual title matters little.

That’s not the story for an agency, however. The agency gets paid only when it sells rights, so it works to keep the focus on older titles even when adding new ones to the list. (Because though the agency’s list will grow, it will never grow at the rate of a publisher’s.) Older titles are re-presented with new positioning, in the hopes that new sales can be made, new paychecks collected, and the author given a real shot at making a living.

Meeting Pinkies
  1. What about format rights? Like hardcover, paperback, and now digital? Do you think there should be a system more akin to the subsidiary model in place? Is there already?

    I think I once read that the publisher retains print rights, which means a paperback publisher could buy paperback rights from the hardcover publisher (I think that’s happened with Stephen King’s Carrie, although that was three or so decades ago).

    Reply

    • Well, I know that a few authors sell their hardcover and paperback rights separately, but that is very rare. It used to be more common for hardcover houses to sell the paperback rights to paperback publishers. This is why for the longest time Bantam published Catcher in the Rye, Del Rey published The Princess Bride, and on and on.

      But these days, nearly every house handles its own paperback publishing (in what is called vertical publishing), which only makes more sense: The house actually earns more money selling the paperback directly (about twice as much for the same number of copies sold).

      Publishing houses expect e-book rights as part of the rights package they buy, and to me, at least, that seems fair. It is, after all, a form of publishing.

      Reply

  2. Just another great reason why authors need an agent!

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  3. Thanks for posting this, Michael. I knew this was Upstart Crow’s position, but I’d never examined why.

    Along Will’s question of formats, are audiobook rights usually lumped in with print/e, or are they a different animal?

    Reply

    • Well, some publishers (the same one I was quoting in this post) would have you believe that they absolutely must have audio rights, but again, we prefer to sell those rights ourselves.

      Reply

  4. Does it make a difference if the publisher has branches in more than one country? I can see wanting to hold onto the rights if it’s a US-based publisher (say, Scholastic), and you want to sell German rights to Carlsen. But take someone like Harper Collins, with a UK and US branch and which seems to support its books well in both markets, is it still better for the agent to sell those rights instead of the publisher?

    Reply

    • Rose, I would say yes, it’s still best to have the sales be done independently. Even if it goes to both Harper Collins divisions. Because it is a rare, rare thing that the UK publisher is willing to sign on at the same time as the US, and just as likely that they won’t.

      Reply

  5. Thanks for the information. It’s really interesting how the publisher would react to the success in another country, but not here situation. Have a good trip there. I remember reading Publisher Weekly’s Children Bookshelf articles about the Bologna Book Fair & seeing your picture with the article from when you were an editor.

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  6. So… is your old heart attending or is it just dreaming?

    XO Barrett

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  7. But if e-book rights are part of the rights publishers expect outright, shouldn’t subsidiary rights be expected, too? If we’re going by things being “after all, a form of publishing,” what wouldn’t that cover overall?

    Like with audio rights. Digital is, after all, another format…

    Also, concerning, say, French rights: French as a language or France as a territory? Are both different rights?

    Reply

    • Well, some debate electronic rights as something other than publication in a readable form. I’d lump them together with printing on old fashioned paper. The market changes, and the definition of book change with them.

      But I would also argue that audiobook is something other than part of the traditional rights suite granted to publishers.

      Yeah, fine divisions of meaning, but I think these days “published in a form meant for reading” tends to be the rights yardstick.

      And on that note: Gots to pack!

      Reply

  8. Wow, this is an awesome insight into subsidiary rights. Thanks for breaking it down to make it understandable, and also for standing up for authors. Just another awesome way Upstart stands out.

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  9. Tis awesome. Thanks.

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  10. I have a (fairly successful) independent film producer interested in my novel. He wants to show it to the director of his last film and start vetting potential script writers for it. He seems geniunely keen to begin the process of a film project.

    But I don’t have an agent and I don’t have the book published. I’m still going that process, e.g. submission. I can ‘t figure out if this is a good thing to do, i.e. go with the film producers interest, or a ‘bad’ thing – I may screw up my own rights or do something an agent may have disuaded me from doing.
    Any advice (however brief) would be really welcome.

    Julie Starr
    (author – Magic to Memphis)

    Reply

  11. […] not limited to film rights, audiobook rights, and the right to translate it into foreign language. Here’s a post on why authors and publishers negotiate over subsidiary rights. [↩]Sometimes Canadian rights […]

    Reply

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