This is really long, so I'm going to post it in two parts. I recently provided this analysis to (ahem) certain official persons, and I thought that past, present, and hopefully-not-to-be-future PA authors might find it helpful.

Obligatory disclaimer: I am not a lawyer, so this is not legal analysis.

Analysis of Revised PublishAmerica Contract
(in use from early 2002 to present)

General Concerns


A commercial publisher’s contract is always negotiable. PublishAmerica (hereafter, PA) doesn’t specifically state that its contract is non-negotiable, but it has shown itself unwilling to make changes in areas that authors who sign with commercial publishers typically expect to negotiate, such as the disposition of subsidiary rights.

Revisions to This Contract

This contract is the result of a revision of the original PA contract, which was in use from the company’s inception in 1999 through early 2002. Revisions include:

- Clause 1, Grant of Rights, has been changed from life of copyright to seven years, with a renewal option at the end of the first seven-year term.

- Clause 20, dealing with the publisher’s right to sell or license subsidiary rights, has been changed to empower the publisher to sell or license these rights only if specifically instructed by the author in writing (formerly, no author authorization was required).

- Clause 28, the Next Book Option, has been removed.

Apart from these alterations, the contract remains essentially unchanged.

Nonstandard Contract Clauses

Clause 1, Grant of Rights--
This clause grants PA the right to publish the work in book form anywhere in the world, in any language, for a term of seven years, with the option for a second seven-year term if both publisher and author agree.

This is certainly better than the life-of-copyright term (the author’s lifetime plus 70 years) of the earlier contract. Even so, seven years is longer than desirable for a print-on-demand-based publisher, especially where that publisher does little or nothing to market and distribute its books.

Another concern: the PA contract claims many rights that PA hasn’t shown itself capable of exploiting, including foreign and translation rights. A publisher shouldn’t claim rights it doesn’t have the ability to market--or else the author should be able to negotiate to hold on to those rights (see Negotiability, above).

Clause 3, Royalties--
This clause specifies the royalty percentages to be paid to authors. As in a standard commercial publishing contract, royalties rise as sales volume increases. Unlike a standard commercial publishing contract, however, royalties are paid on net or “sales” price--the money the publisher actually receives for the books--rather than on cover or retail price.

Since booksellers expect discounts of anywhere up to 55%, this means that the author of a PA book priced at $19.95 might be getting a royalty as low as $0.72 per book ($19.95 x 45% x 8%). A similarly-priced book from a commercial publisher would pay a royalty of $1.60 ($19.95 x 8%).

Also, PublishAmerica’s reservation of the right to issue multiple editions suggests it could simply declare a new edition every time book sales got close to the royalty increase point (see Clauses 16 and 19, below).

Clause 4, Copyright--
This clause states that copyright “shall be taken out in the name of the author.” It isn’t clear whether PA will simply print a copyright notice in the front of the book, or register copyright in the author’s name with the US Copyright Office at its own expense (registration costs $30, and is a requirement for bringing an infringement suit). Commercial publishers do both.

In fact, PA only prints a copyright notice; authors have to register their own copyright and pay the fee themselves.

Clause 9, Promotion--
This clause describes what the publisher will do to promote the book. Commercial publishers’ contracts don't generally include a clause like this. Because the publisher has paid an advance for the work, and will invest substantial time and finances in editing, designing, and printing it, it has a major stake in marketing the work to the best of its ability, in order to recoup its investment and make a profit. It doesn't need to be bound to this contractually.

At the end of the clause, there’s this language: "The author agrees...that the Publisher may, at the Publisher's election and discretion, cause to promote the said literary work, as designated, in any electronic format, and that the Publisher may sell or cause to sell copies of the said literary work in any electronic format." In effect, this is a grant of electronic rights. PA presents electronic publication as a promotional strategy--but electronic rights are a separate category of rights and should be listed (and negotiated) separately. Also, royalties for e-books, which are far less expensive to produce and distribute than print books, should be proportionately higher--but according to this clause, e-book royalties are the same as those for printed books.

Clause 10, Author’s Free Copies and Author’s Discount--PA usually allows between two and five free copies (this is one of very few aspects of the contract that PA is willing to negotiate), and an author discount that tops out at 30%, depending on the number of copies ordered. A commercial publisher typically supplies anywhere from 10 to 25 free copies, and offers an author discount of 50%, regardless of how many copies are ordered.

The clause goes on to state: “The Author may dispose of these copies in any manner, and, if re-sold, may retain all monies derived therefrom.” A commercial publisher will usually prohibits the re-sale of author-purchased books. Commercial publishers don’t expect authors to hawk their own books--selling books is the publisher’s job. For PA, however--and any other publisher that fails to provide marketing and distribution support for its books--author purchases are a major (if not the main) source of income.

Clause 12, Royalty Statements and Accounting--
This clause deals with timing of royalty statements, and with the author's right to examine the publisher's records. While the wording of this clause is reasonably standard, Writer Beware has heard from several authors who’ve attempted to examine PA’s records and have either been stonewalled or told flat out that such an examination wasn’t allowed.

Clause 14, Editing--
This clause begins: “If, in the Publisher’s opinion, the manuscript of the said literary work requires substantial editing, the Publisher agrees to provide such editorial service without cost or expense to the Author.” A commercial publisher’s contract, where the provision of editorial services at the publisher’s expense is an assumed part of the publication process, will never include such a statement.

The clause implies that PA will provide substantive editing for manuscripts that need it. However, there’s no evidence that PA has ever provided substantive editing, let alone the full range of editorial services furnished by a commercial publisher (including substantive or content editing, copy editing, and proofreading). As far as Writer Beware knows, PA provides only light copy editing of inconsistent quality.

In the summer of 2004, PA stopped providing even that. Authors are now offered three publishing “options”: a “super fast track” option where the book goes immediately into production exactly as submitted, without editing or author revisions; a “fast track” option that allows the author the chance for a final revision, after which the book goes into production exactly as is, without editing; and a “no hurry” option, where a manuscript is assigned to an editor for PA’s usual light copy editing, and the author is allowed to proof the result and make further changes. Authors choosing Options 1 or 2 must consent to have the following disclaimer printed on the copyright page: “At the specific preference of the author, Publish America allowed this work to remain exactly as the author intended, verbatim, without editorial input.”

It hardly needs to be said that a commercial publisher, whose reputation rests on the quality of its books, would never send books to press unedited and unproofed--let alone with a disclaimer.

Continued in next post....