Do publishers control e-book rights to their legacy titles?
"Arguably, yes, but not for much longer."
-- Lloyd Jassin
(Transcript of PW presentation by Lloyd J. Jassin)
On September 28, 2010, Publishers Weekly and the Book Industry Study Group held a seminar at the Random House building entitled The Future of Publishing: Know Your eBook Rights. It was moderated by Jim Milliot of PW. I was honored to be on the dais with Paul Aiken, Exec. Dir., Authors Guild; Neil de Young, Exec. Dir, Hachette Digital; and Scott Waxman, Waxman Literary Agency. The following concerns future technology rights and the threat copyright termination -- and Andrew Wylie -- pose to legacy publishers.
JIM MILLIOT (PW): Great. Thanks very much. Lloyd?
LLOYD JASSIN: If Paul (Aiken) is a glass half full kind of guy, then you’ll slit your wrists after I’m done speaking. (laughter) I’m Lloyd Jassin and I want to thank Publishers Weekly and the Book Industry Study Group for inviting all of us here. Because I’m an attorney, I evoke a lot of hostility so let me lay a little foundation.
While I am an attorney I also consider myself a part of this industry. I started out in book publishing 25 years ago, originally at St. Martin’s Press, and then Simon & Schuster. I was a director of publicity for a division of S & S that published long-shelf-life branded nonfiction, which was a good idea then and is even a better idea now for a variety of reasons dealing with electronic publishing. So I’m an exile from publishing. I then went to law school and worked in television and syndication distribution, doing a lot of trademark licensing. I’m also an author. I currently have a boutique law firm, and I represent franchise authors, midlist authors, some literary agencies, midsized book publishers, and the like. So I don’t see things just through the eyes of an attorney/advocate, or a publisher/author. I think I see things a little differently. Plus I have a lot of friends in the music business and we all know what’s happened to them.
So if somebody asked me about the future of book publishing, which I think is the subtext of this morning’s discussion, I’d say, to paraphrase one of my music business friends, “the future of publishing is bright, but the future of the ‘Big 6’ publishing industry is cloudy.” I think publishing has always been in disaster mode, and it will reassess and reform and maybe get smaller, but it’ll adjust to the changes. So big publishing is in peril; you don’t need me to tell you that. But I don’t think it’s just the recession, I don’t think it’s just disintermediation. It’s the fact that, in large part, older contracts didn’t contemplate the digital future. That is an error that you can lay at the feet of the publishers, because they drafted those contracts, and future technology clauses have existed for at least a hundred years. I handed something to Paul that he probably is familiar with, which is Mark Twain’s contract, in his handwriting, which talks about future technologies. So it wasn’t that they didn’t know about future technologies. It’s just that the lawyers were asleep at the wheel, in my opinion.
So respectfully, and it’s very respectful because I’m here at Random House, I disagree with Marcus Dohle, Random House’s CEO’s statement that the vast majority of backlist contracts granted Random House e-book rights. I believe he wasn’t speaking just for Random House but for the industry. Those contracts need to be reviewed on a case-by-case basis. Some contracts granted them e-book rights; a lot of them certainly didn’t. But I think whether they did or didn’t may actually moot, and what I mean by that is, evenif they did grant Random House and Simon & Schuster and their brethren electronic book rights, they have them only for the short term, not the long term. The Copyright Act giveth and it taketh away, and already, and with greater velocity in two years, authors will be able to exercise their statutory termination rights. These are rights found in the Copyright Act that allow authors who didn’t know their worth when they negotiated their publishing contracts 35, 56, 75 years ago, the right to go back and negotiate a better deal. Is it fair to publishers? It’s really not a question of fairness; it’s the law. And wherever you come out on this issue, the copyright termination provisions of the Copyright Act are going to allow authors to reboot their pre-Internet contracts, and clear up any of the ambiguities regarding e-book in the author’s favor. So, if the question is, do publishers control e-book rights to their legacy titles? Arguably they do, but not for much longer.
What happens when the right to reprint classic titles is threatened is the subject of another evening, but what it comes down to is, agents and publishers disagree on two key issues. Who controls e-book rights? I think the question’s been answered, whether it’s the Rosetta books decision which Random House lost, or the reversion of rights in favor of heritage or legacy authors. The historical irony is that 301 years ago, the Copyright Act gave authors the exclusive right to control their writings and other intellectual property and authors in turn gave publishers an exclusive monopoly over their works. The reason authors needed publishers was that publishers controlled the printing presses. That’s what came between readers e and the writers of the time. Now that the printing press is less important and authors can control their own printing presses, I think we’re going to see a dislocation, a disruption, in the way business has been done for a lot of years.
I did the math and 2013, which is first date rights can be recaptured, is two years, 95 days, and approximately 16 hours from now. That’s when the copyright termination or “contract bumping recapture” first time bomb goes off. It will threaten publishing’s backlist and all of the books on the backlist that begin with the words “Vintage,” “Classic,” ”Heritage”; titles published 35, 56 and 75 years ago are at risk. When a publisher’s backlist has to be renegotiated, it has profound implications for the industry, and makes authors and publishers reassess their relationship. I think what will happen is old contracts will be renegotiated – publishers will compromise rather than lose authors. And, it’s generally a good idea to leave the dance with the party you came to the dance with, so while authors have the ability to put a knife to the throat of publishers—it’s the Copyright Act that allows them to do that—I think there’ll be accommodations. If you synthesize this, agent Andrew Wylie, by settling for a 40 percent royalty on backlist titles for his legacy authors, makes me question his negotiation skill. It could be that Random House had pictures of him in a compromising position in Frankfurt. I don’t know. Perhaps, he didn’t consult his attorney before accepting Random House’s offer. Why? In in two, three, four years, all the rights he bargained away are going to revert to his authors. Before long, it’s going to be a 50 percent – or better – deal that authors and agents will be striking. Maybe Mr. Wylie got large advances in exchange, and it’s a short-term license, so there are lots of ways that you can work things out. Forty percent wouldn’t look so bad to me if I got several million dollars up front. Money today versus money tomorrow.
[The full interview will run in the Spring issue of The Authors Guild Bulletin}