On January 12th, HarperCollins announced that they would be publishing an ebook edition of the classic children’s story Julie of the Wolves by Jean Craighead George. Ordinarily, news of an ebook publication of a 44-year-old book wouldn’t make front-page news, but this announcement comes on the heels of a two-and-a-half-year lawsuit HarperCollins brought against Open Road Integrated Media for publishing an ebook version “in violation of HarperCollins’ contract.” Open Road negotiated the deal with the author and her agent, and stated the “HarperCollins claim was without merit.” Ultimately, the judge granted summary judgment for HarperCollins, finding the contract language was “sufficiently broad to draw within its ambit e-book publication.”
Unfortunately, this story and the millions of dollars in legal fees is a common one. Whether you’re an author, a publisher, or an agent, it is not unusual for written contracts to be lost or, in the case of Julie of the Wolves, misinterpreted. The previous systems for retaining information—paper files or even the institutional knowledge of the members of the rights department—are not efficient enough to keep track of all rights controlled, leaving the door open for potential rights conflicts and mismanagement.
In the past, rights sales were mostly in print to foreign publishers and a very small portion of a company’s overall revenue which went directly to the bottom line and, thus, not factored into the profit and loss statement (P&L). Now, with the proliferation of rights opportunities—types, channels, translation, format, fragmentation–publishers are leaving money on the table by not taking advantage of these prospects.
Because publishing has traditionally been focused on the acquiring and developing of new products—titles, authors, marketing, and publicity, little investment has been made to create systems that would maintain and manage rights.
Much like “metadata” before it, a “rights portfolio audit” tends to make a publishing executive’s eyes glaze over, but for a publisher to ignore both the risk and the opportunities that better management of their rights provides, they do so at their own peril.
A rights portfolio audit clarifies a publisher’s assets, identifying what they have rights to, while also exploring the contexts in which they have those rights, and how they can exploit them. When Open Road Integrated Media first launched in 2009, they were able to acquire thousands of titles by great writers who were published before clauses about ebooks were included in their contracts, so these rights were up for purchase. As of April 2015, Open Road has published 10,000 titles and sold 12 million copies of those titles.
In addition, if a publisher has licensed their brand to a third-party, a rights audit helps keep a publisher up to date on payment and alert them to upcoming dates when rights are about to revert back to them or to another party.
Understanding the inventory of rights and licenses that a publisher has available also allows them to better tap into opportunities provided by news, bestsellers and trends for backlist titles. At the Book Industry Study Group Annual Meeting last fall, Simon & Schuster CEO Carolyn Reidy said, “backlist is frontlist for a reader who hasn’t read it yet.” So, knowing the types of books a publisher has on a particular subject opens up more opportunities to present a new book, even if it was published 20 years ago, to a reader who will purchase it. Trade readers and media are less concerned with when a book was published than whether or not it is well-written and, today, publishers have the opportunity to tap into that relationship readers have with content.
Through social media and online communities, for the first time, publishers have a unique opportunity to hear directly from the consumers en masse. That ability to get immediate feedback coupled with the internal data a rights audit can provide about what rights have been lucrative and which should be sold to third parties, allow publishers to make smarter investment decisions about not only their current business—both acquisition of titles and systems to manage current and past titles-but also target future goals.
By conducting an audit that is able to identify gaps in a publisher’s process and highlight its needs, we are able to answer the question of what our overall objective as an organisation is and focus on the art, the relationships, and the knowledge part of publishing that is, for most publishers, the reason they got into the business.
About Randy Petway
As Chief Revenue Officer, Randy is responsible for aligning and cultivating all revenue-related functions throughout the organization in order to ensure that all streams and the commercial teams accountable for them are working in parallel. In his capacity at CRO, Randy also manages the company’s Partners program, which enables Ingenta and its products further penetration of its existing markets and extend its reach into new ones. Prior to the merger between VISTA and Ingenta to form Ingenta, Randy held several management level positions at VISTA, with responsibility for professional services and product development. With more than 15 years of industry experience, he has had the pleasure of working with some of the world’s leading trade, academic, and educational publishers. Randy also spent nearly 10 years working in the financial industry.