Publishing contracts: three key things to watch for

Some years ago, Jamie Thomson and I were setting up a development company using investment and personnel from the games publisher where we worked. There were three contracts to negotiate (for two games and the start-up itself) each the size and complexity of a government white paper. So every evening after work, Jamie and I would sit with the publisher’s lawyers hammering out the deal point by point. Days of this. Did I curse my lot? Oh yes. ‘I’m a game designer, not a contracts lawyer,’ was the habitual grumble.

Why not use our own lawyers? That’s an expensive way to begin a start-up, since each clause had to be parsed as if it were a safety instruction for the ISS. The main reason, though, is that lawyers can’t do your negotiating for you. It’s like an author with an agent. Don’t you and the agent have congruent goals? Not quite. He or she gets a percentage, but you’re the one who has to live by the contract’s terms. Make sure, therefore, that you’ve scrutinized and agreed every point.

These days you don’t have to be involved in a start-up to need to know your way around a contract. Authors have become savvier now that they have the option to self-publish. About time, too. When I started out in the business, it was common for authors to sign publishing deals that gave no guarantee of print runs or marketing spend. It still is, actually. Quite recently a friend of mine had a novel published by one of the Big Five that I have yet to see in any bookstore or reviewed in any magazine or paper. They might as well have put concrete overshoes on his manuscript and tossed it in the East River.

It doesn’t have to be this way. There are three things that an author should look out for when negotiating with a publisher. Attend to those and the contract can be, as an idealist once said, ‘an agreement between friends to make sure they stay friends.’

First, a publishing deal is a joint venture. In any joint venture, you can only agree an equitable division of spoils when you know what each party is putting in. Now, there’s no way to know the value of a novel before it’s published – if there were, we’d all self-publish. But you do know how much money (in terms of time and risk) you invested in it. Say it’s nine months. What is nine months of your time worth? Once you’ve settled on that, find out what the publisher is going to be investing. They have no reason not to be specific; this is a partnership after all. Say that their editing, design, printing, distribution and advertising tots up to the same as your nine man-months. That’s a fifty-fifty JV, and don’t let anybody tell you any different. The advance has to be factored in, of course, but remember that you’re the early investor here. You plunged on in the wild surmise that nine months at the keyboard would result in something that others would deem worth reading. Publishing your book isn’t a personal favour.

By the way, authors can be delicate flowers so maybe you don’t like the idea of demanding to know the publisher’s business plan for the book? Spin it around. Do you think they would sign a contract that specified all their obligations but left blank the details of what you were going to write? The reason they wouldn’t is they can always do a deal with someone else. And so can you. You have a finished manuscript. You can walk across the road and publish with someone else. They want your book, remember. Any glint of magisterial disdain you may detect is really the shiny sweat of desperation.

For the second tip, skip to the stuff at the back: what does the contract say about its own termination? In the old days termination might be triggered by a book going out of print, but with print on demand that’s meaningless. Instead you’ll need to agree a minimum level of sales. Consider that and other termination conditions. Your aim is to make sure that the rights don’t remain tied up in perpetuity. The day may well come when the publisher has no great interest in promoting your book. Fair enough, it’s not their baby, but you won't feel the same way. The partnership then no longer makes any sense, so make sure you aren't going to be chained together after that point is reached.

Thirdly, be aware that it’s all very well to make statements of intent, but the contract has to back those statements up. Short of a default that triggers actual termination, what happens if one of the parties fails to do what they said they would? In the bigger world, a company might undertake not to dump dangerous chemicals in the sea. If they do, they are fined a million dollars, say. Right there you have a clause that, if the cost of processing those chemicals to make them safe is more than a million, stands as a guarantee that they will get dumped in the sea. A contract is a set of game rules, you see. You sign and then you start playing the game and each side will see what they can do to win.

This isn’t cynicism, just reasonable caution. You’ll hear of the ‘Chinese Contract’ – supposedly an agreement so wisely constructed for the win-win that neither side has any reason to game it. But there are zero-sum elements in the most harmonious partnership. My wife and I can’t both have the whole of the last Rolo. You may notice grey areas in a proposed deal, and it is your job to identify them and seal up the gap. Nobody who intends to play fair would want to leave anything undefined and if they say, ‘We can decide that later,’ then leave at once. But when you do see and fix those loopholes, keep a smile on your face. ‘An agreement between friends,’ remember. Or to put it another way, ‘It’s not personal, it’s business.’

Reality kick

Every so often these days, somebody suggests using Kickstarter to fund one of my comics or gamebooks. I expect it was similar in the 1930s – “You just need to put it on the wireless.” Did Caxton tell Malory that the printing press would make him rich?

I’m no expert on crowdfunding. In fact, so much not an expert that I’m not even sure about the “crowd” part. Most projects seem to get off the ground because less than a thousand people stump up an average fifty dollars apiece. Those T-shirts had better be stunning.

But let’s say you put your comic or gamebook on Kickstarter and you raise $100,000. Whoop! Quit your day job, right? Well, no… Because you now have to print, parcel and post about six thousand copies of the book. Plus some T-shirts and a free lunch for the rich kids. A conventionally-published book doesn’t get onto the bestseller lists by selling six thousand copies.

Admittedly, by using Kickstarter as a publishing platform you cut out the bookseller. So that’s 50% of the cover price that you don’t have to give away. But you do have all the manufacture and fulfilment issues to take care of.

What’s the profit margin on a Kickstarter campaign? I haven’t looked (see Not An Expert disclaimer above) but I’d expect them to vary wildly. By profit, I mean the money you’re left with when the last cheque clears and the last book goes sliding down the chute at the post office. With that you have to cover all your fixed costs – writing, art, typesetting, leaving aside the risk of running the Kickstarter in the first place.

This is why I’m sceptical when somebody tells me how easy it would be to fund an entire book through crowdfunding. I can do all the writing for nothing (I didn’t pay myself a penny for all the work I did on Mirabilis books 1, 2 and 3, including layouts and lettering) but there’s still artwork costs. Editing, if you care about quality. Lettering. Typesetting. Printer set-up.

I’m pretty versatile. I can do about three-quarters of that stuff myself. But I still have to pay artists and colorists. And at the end of the rainbow I’m even hoping there might be a few coins left to pay for the thousands of man-hours I put in along the way.

Kickstarter is a way of raising a subscription to print books. It also serves as a great way to enthuse a core of fans who will hopefully spread the word about your project. But it is not a viable way to raise development funds – unless you are super-famous to begin with, in which case you probably don’t need the development funds that badly anyway.

But Kickstarter as a publishing platform? That’s something else. Now you have to make enough on sales to cover costs from scratch. I’m often asked about gamebooks because I wrote a lot of them in the ‘80s and ‘90s. A gamebook takes about four man-months to write. (My interactive adaptation of Frankenstein took nearly eight months, but that was much bigger than a regular gamebook.) Interior art, call that a man-month. Cover, editing, typesetting, another man-month. So a minimum of six man-months for just a black-and-white gamebook. For a full color graphic novel like Mirabilis it’s getting on for twice that.

Writers and artists do need to eat. (Nobody in the movie or publishing industries believes this.) No executive wants to pay them as much as you’d get for flicking paperclips around an office and setting up PowerPoint presentations, but even so that Kickstarter-based publisher will need to find some $23,000 to fund the gamebook, $46,000 for a graphic novel. If you build in a 20% profit on sales, that means the campaign will need to hit a quarter million to get the OGN paid for.

That’s not how it works, of course. I didn’t go out and get investors to do Mirabilis. We had some money in the early days from David Fickling and Random House, but when The DFC (blessed be its memory) had to fold, we didn’t shut up shop. I continued writing for nothing. I went out and found supporting jobs that would pay for Leo and Nikos. This is how most creators have to work. Kickstarter may be a shiny new thing, but it’s not going to change that.

Look back at winter

You know how the summer holiday adverts start appearing on TV the moment the turkey and tinsel are cleared away. In the same spirit, here's an extended look at the opening of Mirabilis Season Two. The spring has sprung, the grass has ris, I wonder where Jack Ember is? Forty fathoms down, is the answer. Catch up on what's been happening to all our regular characters in the two months that Jack and Estelle have been missing on the sea bed.

The annoying thing for me personally is that this one episode is the sum total of all I have to show for 2012. There's much more written, but the past year turned out to be a damp squib as far as actually getting anything out goes. So I'm currently re-evaluating how to make sure that Mirabilis steams ahead in the New Year. That will involve a lot of big changes. More on that next time.

Forget the shop, I'll just have the window

Another London Book Fair rolls around. Last year, quite a few publishers had begun to embrace the digital era, albeit in some cases with the same wide-eyed stare and frozen grin you see on the faces of presenters of TV wildlife shows as they allow pythons to be draped around their necks.

I showed one publisher the Mirabilis app and demonstrated how you could buy issues from the in-app purchasing screen. “This screen could be your whole back catalogue. New books too. It’s a direct connection to your customer.”

“We are not booksellers,” she replied, as witheringly as if I’d pulled out one of those pythons and suggested a place to drape it. “That is not our core business.”

I reckon a lot of MBA students must have missed a class or two before taking up their jobs in publishing. No, indeed you do not want to distract yourself from your core business - if the business you’re in is relatively stable. But when it’s going through the biggest disruption it has experienced in over fifty years, you might need to rethink what your core business is. Possibly on a quarterly basis.

What will publishers be doing in a couple of LBFs from now? Let’s start by stripping down the whole business of how a book gets into a reader’s hands:

• An author writes a manuscript
• A designer/typesetter turns it into a book
• A printer makes copies of it
• Marketing and publicity make people aware of it
• Publishing and distribution allow an interested customer to buy a copy

We all know that the last part of the equation, the high street emporium of books, is under threat. Even if the ebook didn’t exist, I’m still not going to buy a hardback for £12 that I can get on Amazon for £8 and not even have to lug home. “Oh, but we’re an oasis of calm in a busy world,” say the booksellers, “and would you like cinnamon on your latte?” If you think that’s a sustainable business, open a chain of high street zen gardens. The rest I can get by taking my newspaper to Starbucks.

The high street remains a good place to hook people’s interest, especially the non-tribal reader. I can get 50 megabytes of furry steampunk whodunits for 99 cents with one click, but if I just want a good book that isn’t any specific genre, a window display is still one of the most effective ways to get my attention. Certainly I can browse online, but like most people I am more engaged by the real world and, particularly on the way to and from work, I am actively looking for distractions.

The window display is still useful for selling books, then. It just isn’t worth sticking ten thousand square feet of shop behind it. I already talked about how Tesco used virtual shelves – screens displaying their products – to cope with a lack of physical stores in South Korea: I’m just a bookseller and I want my corners. Freed of the need to front an emporium, “window displays”, in the sense of screens you can buy from, can be more widely distributed: on the subway, as bus stops, on buses and trains themselves, even on the wall of Starbucks. And yes, go on then, just a sprinkle of cinnamon.

“But I want my book to go,” you say? And so you can. This post isn’t really about ebooks – I’m addressing the sale of physical product here – but there’s no reason why, having bought the book from one of these virtual windows, you shouldn’t immediately get it on your e-reader. That should be part of the package. The print copy will arrive a day or two later, but you can be reading it right away.

But wait… is that the icy crawl of cold sweat down your back as you survey this glittering LCD-lit utopia? Then you must be a bookseller, and you have recognized the fatal flaw. If you pay for a bunch of virtual window displays, and you go to all the trouble to inform me there is a new Andrew Miller or Lloyd Shepherd book out, what’s to stop me shopping around to find a better price? If I can save a few quid with one or two clicks, I will.

Okay, so here’s the bitter pill. The people paying for these virtual window displays – they’re not the booksellers, they’re the publishers. See, just as long as I’ve noticed their books, they don’t much care if I use Amazon or Barnes & Noble to fulfil my purchase (though increasingly they may encourage me to buy direct, like Waitrose). There’s a poetic justice to this evolution of the business, you must admit, seeing as publishers are the people who pay for window displays even now.

So the guy that owns the wall or the bus stop will make money. London Underground will be happy. The people who make books are happy, as are the people who read them. But the bookseller? Well, in the world of 2020, will that even be a separate trade, or will it just be one of the functions of a publisher?

Tibetan wolves and firing squads

How anonymity can help organizations to take risks
In Tibet there’s a problem with wolves, which prey on the livestock in remote areas. That in itself would be a nuisance. What makes it a problem is that the people of Tibet are Buddhist. Not supposed to kill, you see. So everybody goes out to corner the wolf, and they all have guns, but only a few of the guns have live ammunition. So each huntsman can come home thinking that somebody else did the killing. It’s a win-win. Unless you’re the wolf.

We’ll come back to Tibet. Meanwhile, in a galaxy far, far away – book publishing, to be precise – there is another problem. Every time there’s a big success like Harry Potter or Twilight, publishers come out with a spate of boy wizard or vampire romance books. They do this even though everybody knows that “the next Harry Potter” will look nothing like Harry Potter.

There’s a reason for this, and it’s nothing to do with karma. Suppose I’m a book publisher and this week two manuscripts land on my desk. One is dystopian SF with teens killing each other. The other is – well, anything else. Say it’s a story about a robot butler who is left to raise the last two children after a plague kills the rest of the human race.

Okay, I have no idea if either of these will sell, but I feel reasonably secure that there’s a moderately sized spill-over market that will buy The Famine Arena. Whereas G-VES to the Rescue could be either a big hit or a short circuit. My business runs on hits, so I should be looking for those, but my career runs on not being seen to make a mistake that my rivals in the company can seize on. If you publish a Hunger Games clone and it goes nowhere, you can legitimately say, “Well, who would have known?” There’s your Teflon coating.

This isn’t just about books, by the way. A few years ago I worked at Elixir Studios on a game that was targeted at Sims players. We knew that fans of The Sims already had that game and all the add-ons. Our game needed to be something different that appealed to the same non-hardcore market (in those days an unknown quantity). But the publisher kept fretting over anything that moved us away from being a Sims clone. It was hard to find those few brave souls who were willing to stick their necks out and champion a different approach.

In entertainment, we need the big breakout hits. For all the talk of long tails, the hits still drive everything else. That means we must be willing to experiment and take risks, whether it turns out to be spending more money on Lord of the Rings or spending any money on John Carter. The upper echelons of publishing, television, games and Hollywood are full of people who took some risks when they were younger and are determined never to do so again. A lot of the senior executives I’ve encountered spend their whole time manoeuvring so that they don’t have to actually make a decision, while remaining close enough to grab a little credit if an ambitious young turk happens to strike it lucky.

Success means taking risks, which means flirting with the possibility of failure. We all know this. Tim Harford has written a whole book about it. But, on the other hand, nobody wants to poke their head over the parapet. So we need a way to let the entire organization take a risk without anyone getting sacked if it doesn’t pay off. What to do?

First stage: the publisher must decide how much of their portfolio will be in high-risk, left-field books. That’s a strategic decision. In the games industry, for example, original IP still makes more on average than licensed product – but that Avengers tie-in is a safe bet, while original IP can leave you with oil on your face - or with egg. Looking at something like John Carter, I think even my mum could tell them you don’t stake more than you’re able to lose. At the same time, there’s no point investing in left-field projects unless you’re going to do enough of them to have a decent chance of a hit. (Small publishing companies are therefore best advised to play it safe – though it's there, in fact, where you will actually find the risks being taken.)

Okay, so we know how much of the budget will go into these risky projects. I submit that it is pretty easy to agree objectively on whether a submission is from left field. It’s also not hard for a group of editors to agree whether a story is well told. So there’s our longlist.

Now here’s where the Tibetan farmer tactics come in. Because the editors and marketing people must do a secret ballot to pick which projects to green light. No one person gets the credit, no one person gets the blame. What’s the point, then, you ask? Well, the rational actor should always favour the greater good: the organization as a whole picks a good range of original properties, some of those will be the Next Big Thing, and your job is now more secure - while the publisher that's still trying to cash in on The Hunger Games has to consider a new round of redundancies.

Taking risks from within the safety of the group can help keep the wolf from the door. Just like in Tibet.

Boys' own

My first publisher was the legendary Angela Sheehan at Grafton Books. In those days, I wrote choose-your-own type fantasy gamebooks, and every publisher wanted a series so I kept pretty busy. I worked with Philippa Dickinson at Corgi, Elizabeth Roy at Knight Books, Gill Evans at Mammoth, Mary Tapissier and Marion Lloyd at Pan Macmillan, and many more.

You can see the pattern. British kids’ and young adult publishing is run by women. There are no men. None. Well, there is the (also legendary) David Fickling, but there really is only one David Fickling!

It’s no mystery how this came about. Institutions that are run by men tend to appoint men, institutions run by women appoint women. So inevitably there’s a positive feedback loop that will take you one way or the other. And it wouldn’t matter, except that it used to be said that “boys don’t read” – which is almost perfectly analogous to the videogames industry truism of a few years back that “girls don’t play games”. That’s because female editors may not be the best people to judge what boys like, just as predominantly male game developers didn’t have much idea how to make games that girls would play.

(I once said to an editor that she could find out what kind of stories boys like by looking at the videogames they play. Her reply: “Oh, we did that once. Back when games were at their height.” To her, videogames were a passing fad.)

It is getting better. Kate Wilson at Nosy Crow (now, she really is legendary) took the radical step of actually asking boys what they like to read about. I was going to say it’s not rocket science, but actually rocket science turns out to be one of the very things they’re into – along with dinosaurs, robots, warfare, sport. Really, though, they just want stuff to happen. Less jaw-jaw. Boys did read Harry Potter – more boys, in fact, than girls – and when that juggernaut first gathered momentum, one publisher declared, “It seems like adventure is back in fashion with kids.” The fact is, of course, it never went out of fashion. It just wasn’t being published.

Having said all that, I don’t see fiction or games coming down along gender lines. Okay, there’s chick lit and movies like Mamma Mia – but, averse as I am to them, I have no more liking for over-testosteroned stuff like The Losers. What the average boy wants in a book is just the same as the average girl wants: a cracking story that makes you wonder and care what’s going to happen next. So it’s good for fiction that there’s been a move away from twee, leisurely, soft-concept stuff in favour of exhilarating, character-driven, high-stakes, high-concept storylines. We can pretty much thank J K Rowling and her editors for that.

And all of the above is a preamble to say that one of the best places to find that kind of fiction reviewed is the Book Zone. (“For boys” is added parenthetically, though these are books just as much for gutsy girls like Maria Jones in The Box of Delights.) As I often look at the Book Zone to find my next read, it was very nice to find Mirabilis Volume One reviewed there – and simply stunning to see that Mr Hartwell described it as one of his favourite books of the year. Leo and Nikos and I were reet made up by that, I can tell you.

Now, we had hoped that Mirabilis Volume Two would be out in time for Christmas, but the schedule has been thrown out by shipping times from the printers (in Bosnia – well, it’s a long way from there to the North Pole) and the fact that Leo has got sidetracked by some for-hire work, meaning that Volume Three has got pushed back to the autumn. But turning that around, the good news is there will be two new Mirabilis volumes next year (Volume Two early in the year, Volume Three in October). And you still have time to get Volume One before Christmas - at 25% off on the Book Depository with free delivery anywhere in the world. They must be using reindeer.

To make up for not getting the new book out for this Christmas, we’re going to be running a 5-page preview over the next week, starting tomorrow. This is the episode that, if The DFC had continued, was originally going to be called “Lock and Load”. Grab your torches and pitchforks! To the castle!