with Lynne Marie Zerance

Insider’s Interview: Mark Levine, JD, author of The Fine Print: What Print-On-Demand and E-book Publishing Contracts Really Say

ML: There are certain criteria writers ought to look at closely before signing a contract. Here are some of the main ones to consider:

1. Don’t sign with a company that claims any kind of exclusive rights to your work, even for a limited period of time (unless they are not making you pay up-front publishing fees). You want a contract you can get out of at any time, with maybe 30 days’ notice. The main reason for this is that if you get into a situation where you’re later able to sell your book to a traditional publisher, you don’t want to get hung up with the POD company—it could blow your deal with the publishing house. It’s okay for the POD company to have a clause where they’re allowed to sell the rest of your existing inventory until they run out (which given that it’s POD should be minimal), but not where they can continue to print and sell your book after you exit the contract. This has become an issue more and more lately, as many people are doing a great job promoting their books, selling several thousand copies, and then gaining the interest of a publishing house such as Random House.

2. Another clause to look out for is one that says the publisher owns the formatted version of your book, cover art, and layout of your book. If you’re paying for the company to create these materials for you, and you leave, you should be able to take them with you. If there’s no clause relating to this, ask who owns the materials before signing a contract.

3. Some companies also have a term that lasts for the term of the copyright. This means they own the rights to it for the life of the author plus 70 years—which is basically forever. Not many companies are doing this anyore, but a few still are. Be on the lookout for this.

4. Then there are what I consider overpricing considerations. Most POD companies pay about $4 for a 230-page book to be printed, then charge you double that for each copy you buy from them. I don’t think their sending the file out for printing justifies a 100-percent markup.

5. Pay close attention to how the royalties are structured. You don’t want your royalties based on the “net” unless the net costs are detailed. Let’s say your book retails for $15 and you get a 50% royalty based on the net sales price. Let’s also assume the book costs $5 to print. You should then make $5 per sale ($5 would go to the publisher for its royalty and $5 would go to cover the cost of printing the book). What some publishers do is deduct out “marketing costs” and similar costs. These aren’t defined and can make your royalties shrink right before your eyes.

6. Some also have their own online stores where they’re acting as an Amazon.com-like merchant. Beware of the ones that are giving themselves a “trade discount” before they even sell the book (sometimes up to 50% off), which means they’re really double-dipping by the time they sell the title and divide the royalties with you. That’s probably the most egregious thing some of these companies are still doing. Again, take the book you sell for $15 that costs $5 to print. If the publisher gives itself a 50% trade discount, then it takes $7.50 off the top along with $5 for the printing costs, thus leaving $2.50 to now be split between you and the publisher. So your “50%” royalty ends up being $1.25 while the publisher makes $8.

7. A lot of these companies are also offering marketing services—most of which are a complete waste of money. For example, some will sell you 1,000 bookmarks. Internet marketing is much more profitable. You’d be better off spending your money on Google or Yahoo search engine advertising. Some specialized niche marketing services are good, but you really need to look at them closely. In most cases, if you do want some printed marketing collateral, you can go to Kinko’s or a similar print shop and have your own materials printed up for much less than the POD company would charge you.

8. Another example is a company that purchases New York Times book review ads, which they charge authors a substantial amount of money to produce. I think that’s another complete waste of money. This works well for the John Grishams of the world, but unless you’re famous or have rave quotes from big-name author, you’re not going to sell a lot of books from a NYT book review ad.

9. Also, if the POD company gets an ISBN for your book, be aware that it’s not transferable if you leave. If you take your book elsewhere, you still have to get your own ISBN.

10. And be especially wary of subsidiary rights clauses. You don’t want a contract that gives the POD company the right to agent or market the film rights to your novel, for example.

LZ: Are most of the POD contracts standard for all writers, or is there some wiggle room where you can get clauses changed if you’re not agreeable to the terms?

ML: I think it is possible to get the contracts changed, particularly with the smaller POD companies. There’s so much competition in the POD market now that it’s become easier to negotiate. As a matter of fact, since I wrote the first edition of my e-book: The Fine Print, I’ve gone back to some of these companies and told them what I didn’t like about their contracts, and 20% of them have since changed their contracts in favor of writers. Those are the types of companies that I recommend people work with.

LZ: Is there any other general advice you’d give writers regarding working with a POD firm?

ML: I’d recommend that writers go to some of the writing sites that have boards, such as Writer Beware, Preditors & Editors and the like and do some research on the companies. Also, contact some of the authors that are listed on the POD sites—the ones at the back of the pack, not the front pages—and ask them about their experience with the companies.

I used four ratings to categorize the different companies in my ebook: outstanding, pretty good, just okay, and publishers to avoid. I’ve visited with a lot of these publishers, met a lot of them, and the ones that I name as the best really are the best right now—some of which are much better companies than they used be in terms of fairness to the writers.

Mark Levine, J.D. is the co-founder of Click Industries. He graduated from Georgetown University Law Center in 1992 and practiced corporate, entertainment, and intellectual property law for nine years. He is currently working on an updated print version of his e-book: The Fine Print: What Print-on-demand and E-book Publishing Contracts Really Say, which as of this writing is near completion. If you purchase the e-book now, you may write directly to Mark at mark@clickindustries.com, and he will e-mail you the updated version which includes a different rating system and the latest POD-company contract changes that occurred as a result of his first edition.