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Ten Million Eyeballs

21 Ways to Slice and Dice
Subsidiary Rights for Books

by John Kremer

One of the most important things to remember when buying and selling subsidiary rights is that every right can be cut into as many pieces as you want. If you want to maximize your subsidiary rights income and at the same time retain greater control over your intellectual property, learn how to slice and dice rights. Below are a few of the ways that you can do that.

First and second — When selling magazine reprint rights, you can sell first serial rights and second serial rights. First rights are those sold for publication before the book’s publication date. Second rights are those sold after the book has been published. You could use a similar breakdown for selling some other rights as well.

Duration — Any right can be sold with a time limit attached. For example, mass-market reprint rights are often sold for a set time limit, from three to seven years. Foreign rights are also often limited to a certain number of years. If you have any concerns about the rights buyer, one of the best ways to retain control is to set a time limit for those rights.

Timing — In addition to setting a limit, you can also require that the buyer exercise the right within a certain time period. If they fail to exercise it during that time, rights revert back to you. When I sold Chinese rights to 1001 Ways the first time, the publisher failed to publish an edition in the time required so the rights reverted back to me. As a result, I am able to sell the Chinese rights to this new edition without any conflict with an old edition still being out there.

You could also set a time limit on when they can begin to exercise the right. For instance, to give your hardcover edition time to sell, you can require that a mass-market publisher wait one year from the signing of the contract before publishing their edition.

Grant an option — Movie rights are often sold with an option first. The option allows a buyer to pay a smaller amount while trying to put a deal together. If he can’t put the deal together, then the rights revert back to the seller without a high cost to the buyer.

Format — Rights are naturally broken down by format: book, audio, video, electronic, performance, etc. I’ve already outlined most of these format possibilities in the previous points. In any rights contract, be sure to specify exactly what rights you are granting. All other rights should be retained by you.

Sub-formats — You can also sell rights by sub-formats. For example, sell book rights to reprint in hardcover, trade paperback, mass-market paperback, limited edition, miniature format, etc. Each of these rights can be sold separately.

Medium — When selling some rights, you can also restrict the rights to specific media. For example, break down audio rights to records, audiotapes, CDs, and mp3 in addition to any new audio formats to be created. The best way to do this is to specify the actual media that the right includes and exclude all others unless the buyer also wants to buy the rights to reproduce audio for those media. You can do the same with video, books, etc.

Pieces — You can sell rights to pieces of the book, not just for serial rights but also for reprinting as premium editions, miniature books, pocket guides, purse books, etc. Don’t think you have to sell the entire book. Sell whatever portion a buyer wants to buy. Retain rights to the rest to sell to another buyer (even a competitor to the first buyer).

Abridgements — Audio rights are often broken down to abridged or unabridged rights, but you can do the same for book rights, video, electronic, or other formats. By distinguishing between abridged and unabridged, you can sell the same format or medium rights more than once. For example, the first Chicken Soup for the Soul book also was reprinted in an abridged version as A Cup of Chicken Soup for the Soul.

Dramatic rights — With audio especially, you can distinguish between dramatic and non-dramatic readings of the book. But you could possibly do the same with video and performance rights.

Exclusivity — With any right, you can sell an exclusive or a nonexclusive right. Whenever possible, sell nonexclusively. If someone wants an exclusive, they should pay more for that right. While some rights require exclusivity (e.g., translation or movie rights), others can readily be sold on a nonexclusive basis (e.g., serial or book club rights).

Audience — You can limit the exercise of a right to a specific audience. For example, you could sell first serial rights to an excerpt to a travel magazine and sell the same excerpt again to a food magazine—if you have limited the serial right to a specific audience.

Markets — You can grant one publisher the right to publish a book for the religious market and sell the book rights for the general bookstore market to another publisher. Or you can sell book rights to a publisher but retain rights to publish and sell another edition to premium and corporate buyers.

Means of reaching a market — In selling rights, you could distinguish between the means a publisher uses to reach a market. For example, you could sell the rights to publish the book for the bookstore market but retain rights to sell via mail order, telephone sales, the Internet, etc. If you retain such rights explicitly in a contract, you are free to exercise those rights later yourself—or sell them to someone else. This could be critical if someone wants to build an infomercial around your book.

Territory — You can restrict any right by the territory where it is used, for example, North America, France, Spain, South America, etc. While this restriction is most used in selling foreign rights, it is possible for you to set regional restrictions within a country as well. I don’t know when that would be practical or reasonable, but don’t rule it out.

Language — All subsidiary rights can be sold separately for every language on earth (if someone is interested in buying them). Generally, when you sell translation rights to your book, the foreign publisher also specifies the right to many of the subsidiary rights within that language. The most important subsidiary translation rights are serial, book club, audio, and electronic rights. Note: You would not sell movie rights in another language because then you’d be undermining your ability to sell movie rights in English.

Editorial restrictions — When selling any right, you can always specify your right to approve any editorial changes. This could be important if you are concerned about the integrity of the content, especially when selling condensation rights, reprint rights, or translation rights. Such restrictions can also be important when licensing merchandising rights so that your brand image or title is not used inappropriately on t-shirts, calendars, posters, coffee mugs, etc.

Advertising restrictions — If it is important how your brand is presented, you should also set advertising and promotional restrictions so that the buyer doesn’t advertise your brand inappropriately.

Other restrictions — When selling rights, read any contract offered you as carefully as possible. Similarly, when offering a buyer a contract to license any rights, be sure to include every point that is important to you. If you have any other concerns, be sure to specify them in a contract. All rights are fully negotiable. Set any restrictions you need to set to be comfortable in selling a right.

Performance clause — You can always sell or license any right with a performance clause attached that says if they don't sell enough copies or don't perform in some other specific way, the rights revert back to you. Performance clauses are especially important when your income is based on their performance.

Minimum sales clause — Many merchandise licenses are sold with the restriction that royalties will be paid on a minimum number of sales regardless of whether or not the licensee makes that many sales. Rights don't necessarily revert back to the licensor but at least as the licensor, you make the minimum you require for the exercise of that specific right.

The world can be yours, or at least one billion dollars of it (as is the case with the world’s first billionaire author, J. K. Rowlings), if you know and understand how intellectual property rights work. Don’t be stupid. If you don’t know what you are signing, don’t sign it. Keep asking questions until you are satisfied you understand exactly what rights you are granting and how you will be paid, how much, what kind of accountability is in place, etc. You can’t be shy when it comes to your intellectual property rights. Stand up for your rights!

1001 Ways to Market Your Books, 6th Edition describes more than 1,000 ideas, tips, and suggestions for marketing books — all illustrated with real-life examples showing how other publishers and authors have marketed their books.

“Without glitzy idealism or funky hopelessness, Kremer does a sound job of talking about marketing, telling stories from his own and others' experiences. He knows his subject, imparting important information in a fast-paced, very open way. Extremely good stuff here.” — The Book Reader

May, 2006. 704-page softcover. $27.95. ISBN: 0-912411-49-X.

Copyright © 2010 by book publishing expert John Kremer

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