Vol. 80, No. 12, December 2007
he bogus book contract has become one of the 21st century's most nefarious traps for the unwary who seek to be published, and advertising on the Web by vanity presses disguised as legitimate publishers has spread its reach. Between reports of multi-million-dollar book deals for the famous and the infamous, and the ease of searching the Web for ostensible publishers, everyone who has ever dreamed of seeing his or her words in print thinks that fame and fortune are just a click away.
Scam publishers have been known to trap even unwary lawyers, who think the contracts they have signed meet industry standards. And attorneys unfamiliar with publishing custom may see what looks, on its face, to be a valid contract, and tell the client it's all right to sign it, when in fact the contract leaves the client with little or no recourse to take the book back from the publisher when it turns out that the print edition is inferior, or overpriced, or can't be purchased through normal sales channels such as bookstores.
The aim of this article is not to teach lawyers how to negotiate a book contract: Custom of the trade is so complex in this area that the only things that can be said with any certainty are that, among legitimate publishers, there is no such thing as a standard book contract (although there may be variations on a theme), and although royalty rates generally fall within certain parameters, rates will vary depending on the book's genre, the publication's format, and the publisher's size.
This article aims to educate lawyers how to recognize a scam when they see it. So whether it is you who hope to write a legal thriller and become the next Scott Turow or John Grisham, or your client who thinks his World War II memoir is going to become a best seller, here are some of the things you need to know.
There is No Free Lunch
No matter how many As you got in English, if someone responds to your inquiry about publishing your book with an enthusiastic acceptance within 24 or 36 hours of submission, that person probably is scamming you. Most publishers need to present a book to a committee that meets at best once a week to determine whether the book fits their "list" and whether they can present it in such a way that they can boost its sales. If the book is finished, they may want changes, either major or minor. If it is not yet done, they will want to know more about the author: what else has he or she written, and how likely is it that the book actually will be completed?
Ellen M. Kozak, Kozak Law Offices, Milwaukee, concentrates her practice on copyright, media, publishing, and entertainment law. She is a graduate of Barnard College and the U.W. Law School. Her book, From Pen to Print: The Secrets of Getting Published Successfully (New York: Henry Holt & Co., 1990), was named best nonfiction book of 1990 by the Council for Wisconsin Writers. She also is the author of Every Writer’s Guide to Copyright and Publishing Law (3rd ed., Henry Holt & Co., 2004); a pseudonymous series of science fiction novels published by Pinnacle books in the 1980s; and many published articles.
Responses from legitimate publishers may take months; six weeks is usually the minimum. A publisher that waxes enthusiastic about your book before having had the chance to reflect on it probably hasn't read it - you are just getting the form letter sent to the fish that the publisher hopes will bite.
One way to exercise due diligence is to research the publisher. There are two ways to do this: First, if you found the publisher on the Web, look for negative postings on the Web. Use Google, Blackle, Ask.com - whatever search engine you can find. One good source is a Web site called "Preditors and Editors" (http://anotherealm.com/prededitors), on which legitimate agents and publishing houses are identified and others may be rated "not recommended" with information as to why.
A second way to research the publisher is to stop by your local bookstore - for this, independent bookstore owners often are more knowledgeable than part-time employees of chain stores - and ask if the owner has ever heard of the company or has carried its books. After looking up a publisher, the bookseller may tell you that the company does not sell on consignment (which is how most books get into bookstores) so that, while a prepaid single copy can be specially ordered, the store would not be likely to carry books from this publisher on a regular basis. (Some local bookstores may be willing to stock a few as a favor to a local author, but how is your book going to become a national best seller if only one local bookstore is carrying it?)
Payment: A Dead Giveaway
The rule of thumb for getting into print is "they pay you, you never pay them." If a publisher is asking for a "contribution" or "underwriting" from the author, it is almost always a vanity press. Now, vanity presses are the first to deny that that is what they are. They may call themselves a "subsidy press" or even discuss "self-publishing." The fact is, if a publisher is asking for money, it should be assiduously avoided.
When It Might Be Okay to Pay
There are a very few reasons to self-publish a book, and if your client, after inquiry, falls into one of these categories, it might be all right for the client to seek out editorial and printing services, usually for a limited run. Be very wary of a "publisher," however, because there is little that a publisher can do for such clients, and good reasons for the clients to do their printing and binding themselves.
The first legitimate reason to self-publish is if the book is of very limited interest. This category includes family histories that will be distributed at a family reunion or are being written for one's grandchildren. The author might do well to seek out a competent local editor - even a moonlighting English teacher or journalist will do - to copy-edit the manuscript for spelling and grammar errors and inconsistencies in the story, and then seek out a local printer. Copy shops such as Kinko's can help reformat and then spiral bind a book, and if you want the book perfect bound, there are usually local printers that can do that as well. (The cost per book goes down as the numbers ordered go up, but what is your client going to do with 3,000 copies of a book meant for distribution to 50 family members?) Nowadays, if print-on-demand publishing is available, it may be possible to go back to press for a reasonable cost-per-book with just a minor set-up charge - but that set-up charge means that you aren't going to be going back to press for a single volume, and so the author should order an adequate number of copies but try not to go overboard.
A book designed for a very limited audience will probably not be bought by people outside that audience. For example, "The Best Restaurants In (Your Town of 1,500 People)" will only sell to those people who live in your town or who visit those restaurants during tourist season. A commercial publisher is unlikely to invest in such a book. Your client may be able to pre-sell enough copies to the restaurants mentioned in the book to cover the cost of the first printing. Remember, however, there is usually a 100 percent mark-up, so if the suggested retail price of the book is $10, it will have to be sold to the restaurants and those bookstores and drugstores that are willing to carry it for $5 - which means the cost per book (after factoring in overhead, advertising, and free samples) needs to be well under that $5 per book to make it profitable. Again, what one should be contracting for in this instance is printing and binding, not "publishing."
Another legitimate reason for self publishing might be if the author is a teacher, lecturer, or motivational speaker. If you have a captive audience, you can sell the book to all of your students, sell it in the back of the room after your speech, or include one copy per attendee in your speaker fee (if you can command a speaker fee large enough to cover such a charge).
In the above instances, since the book is not expected to be sold in bookstores, you do not need to invest in barcodes and ISBN numbers, which can, between them, raise the cost of publication by as much as $1,000. (It is less than that for presses that publish regularly, because such numbers are sold in multiple sets, so don't think you have to cover that high a cost for a subsidy press, since such a press can buy both kinds of numbers in sufficient amounts to get a volume discount. Vanity/subsidy presses keep their costs low, and rarely, if ever, lose money on a paid press run no matter what they may tell the author.) However, if you think that you might want to sell through retail outlets or Amazon.com, these identification numbers are a necessity.
Beyond those limited circumstances, publishing your book yourself is an investment in expensive attic insulation.
Finding the Legitimate Publisher
The most important question to ask your client is if he or she tried the normal route of finding a legitimate publisher before seeking out this unknown entity to publish his or her book. If not, why not?
Yes, it can be difficult to catch the eye of a legitimate agent or publisher, but there are ways to do it. They include attending writers' conferences at which agents and publishers' representatives are present, or attending the annual Book Expo America, sponsored by the American Booksellers Association, and looking over the wares of the thousands of publishers who take booths there. Does the book fit into one of the niches that a publisher discovered there might handle? That publisher might be a good company to pitch the book to. But remember that publishing is a business, and each publisher aims for a specific market, so don't push your legal thriller to a religious house just because in one scene, your protagonist takes shelter in a church. You'll get rejected, and rightly so. Don't try to sell it to Harlequin Romances, or to DAW books, a science fiction house. There is an art to pitching a book, and doing your research is important when sending out a proposal or even a complete manuscript.
The best route is to send a polite query, with a formal proposal to follow if the publisher expresses interest. Sending out a complete manuscript, unless it is requested by the publisher, is likely to result in an overnight turnaround, often without the envelope even being opened. A formal proposal, by the way, is as stylized as a brief, and follows established custom of the trade. Entire books have been written on how to query a publisher or prepare a book proposal, and such authorities should be consulted if you don't know what these documents should look like.
Traps for the Unwary
Normally, a publisher offers an advance against the royalties that a book is expected to earn, although university presses and some smaller publishers either do not pay advances or pay only very small ones. For commercial presses, the advance signifies the publisher's commitment to the book - it is putting its money on the line, paying the author up front what it thinks the royalties on initial sales will be. (University presses traditionally do not offer an advance because they presume they are publishing the works of professors who have another source of income. Very small niche publishers may not be able to afford an advance, but if they are getting the books into bookstores, and paying for the editing, printing, and distribution themselves, they still may be legitimate.)
Sometimes a publisher will offer a $1 advance. This is usually a gimmick that satisfies the consideration requirement of a contract but essentially means, "We don't expect you to earn any royalties." Such a publisher may be counting on the author to purchase a whole slew of his or her books in order to cover the costs of printing. The publisher will produce an inexpensive edition and set the price of the book very high and then will collect half of that inflated price on every copy the author purchases.
One way to spot this kind of scam may be by looking at the number of free books offered to the author. Most publishers offer 10 books in addition to those that they send out to reviewers and influential bookstore owners. You can usually manage to get twice that number just by asking. (An exception may be an expensive textbook, or an art book, which is meant to be sold at retail for more than $40 or $50 per copy - you may get fewer of those. If the book consists mainly of text, however, publishers usually are more generous with extra copies, especially if you want them for publicity purposes.)
One way to determine whether the book will be overpriced is by going to the publisher's Web site to see the prices of books listed there. Then compare that information to the prices of books in a bookstore. If the publisher's paperback novels by unknown writers are priced at $30 or more, who is going to buy them? If the publisher does not offer consignment sales to bookstores, the only way you can get your book into your local bookstore is to buy copies from the publisher at the normal author's discount (usually 50 percent off the cover price) and then resell them to the bookstore at that same discount, which leaves no room for profit.
Overpricing the books is a typical scam. If you want copies, you'll be paying through the nose for them. The print costs for a paperback book are typically under $3 per book and much less than that for mass market paperbacks, which is why publishers don't even ask for their return. Bookstores just rip off the covers and turn them in for credit, trashing the books. (By the way, this is a good reason you should never buy books with their covers ripped off. By agreement with the publisher, such books should have been shredded; if they are being resold, neither the author nor the publisher is earning any of the money for those copies, and such sales are in fact illegal.)
Even when publishers actually send books to appropriate reviewers, which is something the vanity presses rarely do, authors still find themselves in need of extra copies to give away for various publicity and goodwill purposes. If books are overpriced, this can be a very expensive proposition.
A word about review copies: Many vanity presses say they send books out for review, but few actually do so. When they do, they are seldom appropriately selective. You want your book in the hands of someone who will actually consider reviewing it, whether that is the book editor of your local paper or the editor of your college alumni magazine. As for the legitimate book reviewers who work for major magazines and newspapers, they know which presses really are vanity presses, and almost never review books received from them; such books usually are just given or thrown away.
Watch Out for the Option Clause
Many book contracts include an option clause, which essentially is a right of first refusal on the author's next book. You can usually get a legitimate publisher to delete the clause, or at least modify it so that the book can be offered to the publisher (usually as a proposal or in a format called "partial and outline") before it has been completed. If the publisher passes on the book at that stage, the author is free to offer it elsewhere; if the publisher wants the book, it will offer the author another contract with another advance.
Many scam houses include an option clause that requires the entire book to be completed before they will consider it - and ties the author to the same terms for the second book as for the first. Then the second book is theirs if they want it, and of course they do, because the author is their little cash cow. For some reason, authors are flattered by option clauses. They shouldn't be. Unless the book is part of a series, there is no reason to give your first publisher the rights to your next book, especially on the same terms as the first.
Don't Give Away the Rights
Except for elementary and high school textbooks and similar works in a series that the publisher has already developed, there is no reason to give a publisher your copyright. And because "copyright" is the name given to the "bundle of rights" an author has in his or her work, one has to be careful not to give away that entire bundle of rights while keeping the copyright in name only.
Copyrights are almost infinitely divisible. They include the rights of reproduction (hardcover, paperback, large print, and electronic editions are all ways the book can be reproduced) and distribution (which can be restricted by territory, by length of term, or by format or means of distribution, such as a book club). Copyrights also include the right to perform the work (which would include books on tape) and the right to prepare derivative works such as movie versions, translations, and sequels based on the original book.
A legitimate publishing agreement normally will reserve for the author all rights not specifically granted in the contract. A scam contract usually will assign all rights to the publisher, whether specifically granted or not. Absent compelling reasons, such as the publisher's ability to actually make foreign, book club, or movie sales, there is no reason to give a publisher anything but the right to actually publish the book in book form and perhaps some very limited ancillary rights, such as the granting of permission to quote from the book, to make administering book sales easier.
True, legitimate publishers initially may want to keep serial (magazine) rights, permissions, and foreign rights - all of which are related to book distribution - and some other rights, but it is possible to hold back many of these. The split with a legitimate publisher will be at most 50/50, and often the author can negotiate as much as a 90 percent share of some subsidiary rights, or can keep some rights to sell himself or herself, without giving the publisher any share.
One of the worst usurpations of a writer's rights is the resale clause. If a vanity press-published book manages to beat the odds and break out as a book that actually is selling, a legitimate publisher may offer to pick it up. If that happens, the vanity press usually will lay claim to 50 percent of the royalties paid by the publisher that picks up the book. While such a split is traditional in the legitimate publishing world, it has no place in a contract when the author has paid for the publishing up front and received little or no assistance from the vanity press, which has taken no risk whatsoever to merit such a share of the proceeds.
The Devil is in the Details
As mentioned earlier, the aim of this article is not to teach you how to negotiate a book contract, because that is a nuanced process that takes years of understanding of the industry (even, and perhaps especially, given recent changes due to the Internet). The article's goal is to show authors and their attorneys when to avoid publishers that do not sell in bookstores, that may set book prices (and consequently authors' discounted prices) too high for potential sales, and that do not appropriately publicize their books, and definitely those that are asking for money.
There is another dead giveaway to identifying an illegitimate publishing house. When you offer to sell a book, and the publishing house instantly declares it would love to publish it - for a price - you can often identify a vanity press, because it won't give up. You receive mail from it, emails from it, newsletters from it, inquiries as to whether you've finished the book yet. Such publishers smell blood in the water or a checkbook in hand. If a would-be author tells them he or she is going to have a lawyer review the contract, these publishers may panic or try to dissuade you, whereas a legitimate publisher would encourage you to do so.
Visions of Pie in the Sky
If, especially after asking an author to invest, a publisher tries to tell the author how much money can be made from sales of the book, watch out. Unless you are already famous, or your book wins a prize or somehow manages to take off even absent appropriate publicity, you just aren't going to make big money from it, which is why even in the world of legitimate publishing, most authors' advances are in the $3,000 to $10,000 range, if they're lucky. The size of the advance tells you how much the publisher bets - by putting its money where its mouth is - that the book will earn for the author (and consequently will earn nine-fold for the publisher) or, conversely, how much the publisher is willing to lose if the book doesn't sell well.
Some publishers send out publicity plans that make it seem as though you could earn huge sums by scheduling appearances and signings. At least one publisher sends out a plan for making thousands of dollars from the book, which starts with the author purchasing 3,000 copies. This publisher tells you how you can make not only local sales, but proposes a 10-city tour, with four appearances (two lunch and two dinner speeches) in each city, with the estimate that you could sell 75 books at each appearance.
However, the harsh reality is that if an author manages to garner 30 sales at a bookstore appearance, the bookstore manager will be ecstatic. Ten sales is really good for most author appearances. And as for that 10-city tour, ask yourself, could you even manage to get yourself invited to speak at two lunches and two dinners in your own home town, meals at which more than 75 people would be present? And what percentage of people in attendance will actually fork over the money to buy the book? It's usually about 10 percent. By that rule of thumb, to sell 75 books at an appearance, you'd have to have an audience of 750 people.
It's a sad fact of the publishing world that few writers are going to get rich off their books, but they don't have to get poor from them! The author's contribution should be sweat equity - writing the book. The publisher should take care of all the rest. If that isn't the case, dump the contract.