A Modest Proposal in E-Wars

The war over e-book rights is being fought between authors and their agents, on the one hand, and with publishers on the other. Litigation is probably necessary to resolve the issues on legacy contracts negotiated over the past half-century and more: Did publishers acquire e-book rights when they acquired p-book rights? Does it matter exactly what kind of e-book we're talking about? Does it matter what the precise wording was in contracts negotiated before e-books?

If there is a way to resolve those issues for legacy contracts without litigating them, I surely don't know what it would be.

As important as resolving those disputes is to unleashing the full power of a potential e-book revolution, doing so is largely beyond the power of the executives in today's publishing houses or the agents for today's authors. But it is well within their power to assure that current contracts enable e-book publishing on a sensible basis. Before suggesting what those terms ought to be, let's set forth some assumptions:

1. To maximize the sale of the author's work, the e-book publisher should be the same as the p-book publisher, because the promotion of the intellectual content of the book, which is the publisher's marketing job, benefits both.
2. The publisher's payment of an advance, which frequently enables a book to be written in the first place, adds legitimacy to the argument that the publisher should participate in the revenue made possible by that advance. This, along with publishers' competence at selling and administering subsidiary rights, supports publishers' entitlement to involvement in all such rights.
3. The author assigns the right to exploit her copyright to the publisher because the publisher claims to have the organization and expertise to do so on their mutual behalf. When it comes to e-books, that claim is of little value unless the e-book is published.
4. Nobody knows what e-books will sell for in the future and nobody knows how revenues will ultimately be divided. Today the e-book "standard" is a 50-50 split between author and publisher; my hunch is that in the future we'll see some authors getting much more and some getting less. But the percentage doesn't mean much because the pricing is all over the lot.
5. E-book piracy cannot become consequential until e-book revenues become consequential. Excessive concern today about purloined files is cart-before-horse. These times may not last forever, but today the biggest effect of an e-book is to boost print sales; the author's and publisher's interest today is in the widest possible circulation of content in all forms.
6. Publishers today say their e-book entitlement extends only to the electronic equivalent of the p-book, not to "enhanced" versions of an e-book. This a dangerous position to take, with new technologies (see Bob Stein's Night Kitchen) poised to make enhanced e-books commonplace. But that will not change the publishing or marketing realities (see point 1), so publishers may be making a weaker-than-necessary case for their involvement.

So here's the fair deal, as of May 2001.

The author should grant the publisher the e-book rights, but the publisher should be obliged to publish the e-book to keep them. When? Negotiable, but I'd say simultaneous to the print book or just before.

The author should command, and the publisher should pay, a royalty expressed in dollars and cents, not a percentage of retail. Setting that near, but perhaps a little less, than the maximum p-book dollar royalty figure is probably about right. This will actually increase the publisher's flexibility in setting prices and changing them from time to time. And it protects authors from publishers' excessive price experimentation at their expense.

The author should agree to e-book giveaways, at no royalty, as part of specific marketing campaigns.

The royalty arrangement should expire after three to five years, with a reopener based on "prevailing practices" at that time. That protects both author and publisher from being frozen in the future by a deal made before the marketplace is clear.

There are too many unproductive positions being taken in today's negotiations. Publishers are insisting on tying up e-book rights, but making no commitments to delivering them to the marketplace. Authors and agents are making counterproductive demands about pricing, out of a misplaced fear that e-book sales will "cannibalize" p-book sales, rather than promote them. And both sides must recognize the need to make renegotiable deals, because we're in a moment in history when knowing what is "fair" is simply not possible.