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TIME WARNER E-BOOK CONTRACT COULD BE BIG MISTAKE FOR FIRST-TIME AUTHORS
New York -- The Authors Guild today warned its members that experimenting in digital publishing with Time Warner's new iPublish division presents substantial legal risks and loss of literary rights for little pay. The Guild urged all writers, including new writers not yet eligible for Guild membership, to approach iPublish with extreme caution. Established writers who are merely dabbling in a new medium may find they've inadvertently granted a laundry list of rights to Time Warner and agreed to a bargain-basement advance for print rights to their work. Worse yet, writers surrender rights to their next work as well, agreeing to sell the digital rights to iPublish for advances as low as $25 or less. Writers agree to the terms of this contract by merely submitting their manuscripts to iPublish. "The seductive appeal of e-book publication should not blind authors to the risk involved in the iPublish contract," said Guild president Letty Cottin Pogrebin. "No professional writer or responsible agent would accept terms that call for the author's virtual surrender of basic literary rights, yet with its pitiful advances and Draconian option clause, this contract does just that. The Authors Guild deplores Time Warner's exploitive approach. We strongly advise authors who are interested in digital publication to hold out for a publishing partner who respects their work and a publishing agreement that reflects fundamental standards of fair industry practice." The publishing contract contains several unusual provisions that could prove costly to unwary writers. The terms are among the worst the Authors Guild has seen from a publisher of any size or reputation. For example:- WRITERS GRANT BROAD RIGHTS TO iPUBLISH. Writers expecting they are granting merely e-book rights are in for a surprise: Time Warner claims the exclusive rights to any means of delivering digital content, regardless of whether those means have yet been invented. The sweeping definition of digital rights granted includes audio book rights and rights to digitally printed books, such as print-on-demand books. The writer also grants Time Warner an option (discussed below) on the traditional print rights to the work.
- ROYALTIES ARE LOW. Royalties for e-books are pegged at 25% of net sales (except in the highly unlikely event that the author earns $25,000 from digital media sales). This is a scant amount for e-book royalties, since e-books can be produced at practically no cost.
- NO ADVANCE IS PAID FOR THE E-BOOK. Time Warner's iPublish is selective in the works it chooses to publish as an e-book. Just as a publisher pays the author an advance when it selectively acquires rights to publish a work in traditional form, so should a publisher pay an advance when it selects a work to publish electronically, especially when the publisher ties up other literary rights as well.
- PRINT BOOK ADVANCE IS LOCKED IN AT $5,000. Time Warner obtains an exclusive option to publish the work in print form. This option is carefully crafted to assure that the author (a) won't receive more than $5,000 as an advance and (b) won't be able to effectively negotiate a competing bid from another publisher. The advance for print publication is fixed at $5,000, even if the author and Time Warner fail to agree to the other contractual terms. If, on failing to negotiate an agreement with Time Warner, the author goes to another publisher, Time Warner still has the option to obtain the work on the same terms as the other publisher, but never has to pay an advance greater than $5,000.
- TIME WARNER CONTROLS THE AUTHOR'S NEXT WORK. Regardless of whether Time Warner acquires the print rights to the original work, it has a claim on the author's next work. It can acquire those rights by exercising an option equal to the proceeds the author earns for the first work. A creative writing student, for example, who uses Time Warner's iPublish to publish a collection of short stories which are bought by a few classmates and friends, earning the author $25 in royalties, would find that Time Warner has a $25 option to the author's next work, which could be a best-selling first novel or memoir. If Time Warner chooses to put that work into print form, it could do so and be assured that its advance payment won't exceed $5,000.
- AUTHORS COULD BE FORCED TO PAY TIME WARNER FOR SPECIOUS CLAIMS. If anyone makes a claim that an author's work is libelous or invades privacy, regardless of the merits of that claim, Time Warner has the right to settle the claim without the author's approval and charge the author for the settlement amount and Time Warner's legal fees. There is no provision for insuring the author against such claims, as is generally included in traditional publishing contracts.
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