Subsidiary Rights: Lucrative Territory
I've been published for almost a year now and, amazingly enough, I am not yet driving a Ferrari. Don't get me wrong. I'm sure I'm on my way, butbeing the impatient sortI can't help but wonder just how long this journey to the Forbes list will take. Advances and royalties are great, but I decided to take a look at alternate avenues of revenue. My first turn: subsidiary rights.
I called up agent Evan Fogelman, licensed attorney, entertainment law guru, and, most happily, my agent, and asked him to give me some road signs on the sub-rights highway. "Subsidiary rights are uses or applications of a book in other media or other rights deals," Fogelman told me. And, fortunately, many of these rights can be sold for profit (cha-ching!). A quick glance at that page of my contract shows that this includes film rights, audio book rights, foreign rights, book club rights, electronic rights, and more
When dealing with sub-rights, Mr. Fogelman cited two issues an author should consider. The first is the publisher's success in licensing sub-rights. Why grant a publisher world rights if said publisher does not have a great track record selling world rights? The second issue is the split section of the sub-rights page of a contract. According to Fogelman, this is "the extent the revenue is split between the author and the publisher." The percentage of the split is "a matter of author leverage." A new author's split is usually 50/50. A known author might negotiate a split closer to 80/20.
From a money standpoint, that 80/20 looks really good. Even better would be owning the rights themselves because when an author or her agent sells the sub-rights, the writer is paid more quickly. Author Colleen Thompson (Fade the Heat, December 2005) pointed out that when a publisher sells sub-rights the author "won't see a penny unless your book has earned back its advance. Also, you'll often (depending on your contract terms) have to wait for your next royalty statement to see any of it."
Colleen Thompson notes that "it's a good idea to hold onto them [sub-rights] when possible," but "some publishers won't part with these rights." Fogelman agrees and points out that for the majority of authors sub-rights aren't a deal breaker. If a publisher won't part with them, most authors won't back out of negotiations.
Once a book is sold and published, I wanted to know which sub-rights are the easiest to sell (show me the easy money!). Mr. Fogelman responded that foreign rights are the quickest to sell. Most authors I queried also referred to sales of foreign rights. Cheryl Bolen (One Golden Ring, October 2005) mentioned sales in Japan, Italy, Brazil, Sweden, France, Switzerland, and Belgium. Mr. Fogelman noted that some countries are more interested in particular sub-genres. Japan buys a lot of true crime, while France and Scandinavia buy a ton of romance. Pat Kay (She's the One, March 2006) mentioned sales in Europe and Scandinavia, noting that Sweden has been very good to her: "all the titles came out in hard cover and were picked up by several of their bookclubs."
Colleen Thompson warned new writers that "not all subgenres are marketable overseas. I found, for instance, that fewer foreign publishers liked Civil War historicals than Westerns. I've heard that shorter books, which are easier to translate and produce, may be an easier sale than non-bestseller longer tomes."
So now that I knew where the easy money was, I wanted to know where the big money was. I asked Mr. Fogelman which sub-rights are the most profitable. His answer, which probably won't surprise anyone, is film. Fogelman explained that if a film based on a book is actually made and "the author is cut in as a consultant or writes the screenplay" then film rights can be quite lucrative.
As an author, the key to making money on film rights is sticking around. Typically the film people will "pay an author to go away," says Fogelman. "The usual rate is ten times the option, so if the option is $10,000, the author is paid $100,000."
Not too shabby but not enough bucks for my Ferrari. Fortunately, Mr. Fogelman finds it even more "profitable for an author and agent to keep an author involved either 1) as a screenwriter or co-screenwriter, or 2) as a consultant during principal photography, where the author is paid per day."
How often do these lucrative film deals happen? Rarely. According to Mr. Fogelman only 1 in 4,000 books optioned for film is ever made into a film.
Okay, so what about Ferrari money we can count on? At Avon, my editors usually contact the author and agent when a sub-rights offer is on the table and ask for acceptance. Mr. Fogelman pointed out that if a house owns the sub-rights, they do not have to okay sales with the author, though it is a professional courtesy. Several authors I spoke to did have difficulty learning about sub-rights sales. Colleen Thompson "found out sub-rights have been sold because I either found the different edition online or copies in weird languages showed up at my house. Sometimes, I've found out on a royalty statement."
Even after sub-rights have been sold, it's important for an author to be tenacious about tracking sales. Cheryl Bolen advises "authors to check foreign publishers' websites and track their foreign sales because reporting of these can be a bit hit or miss."
Mr. Fogelman emphasized that publishers do have a "fiduciary duty to an author whose money they are holding," but it's still in the best interest of the author to take an active role to make sure payments are made.
Pat Kay calls sub-rights "lucrative territory," and I certainly see her point. Will sub-rights sales buy me that red Ferrari? Probably not. But I take comfort when authors like Colleen Thompson reiterate what I have heard before: "some authors earn more on secondary rights than they make on the original sales."
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