Subsidiary Rights, Additional Author and Publisher Profits
Third Party Potential for More Book Formats, More Book Revenue
Subsidiary rights ("sub rights") are a part of author contracts and critically important to author and book publisher income.
What Are Subsidiary Rights?
In a book contract, the author assigns the publisher the right to publish his or her work in book form (ex. a hardcover book). The term "subsidiary rights" refers to the rights the author grants the publisher to "sub-license" his or her book ("the work") for various formats and adaptations in addition to the primary format.
The book contract outlines the subsidiary rights that are being granted by the agreement, and also outlines the percentage of the sub-license fees received by the publisher (from the third-party licensor) that will go to the author.
Subsidiary rights represent important ancillary revenue streams for the book's publisher and for the author. The "Sub Rights" department in a book publishing house is charged with selling subsidiary rights to the parties who will exploit them—for example, to book clubs, audiobook publishers, foreign publishers, movie producers, etc. Many sub-rights sales transacted at major book publishing industry trade shows that take place throughout the year.
Examples of Subsidiary Rights
There are as many types of subsidiary rights as there are formats and platforms for storytelling. Here are the most common examples of subsidiary rights granted in a book contract:
- First Serial: First serial rights refer to the use of the book's content for serializations, condensations, excerpts, digests, etc. in newspapers, magazines, or in other periodicals before the work is published in book form. First serials can be important to the publication of a topical or controversial non-fiction book and can help to create the pre-publication marketing "buzz" for the book to entice readers to buy it when it hits the stores.
- Second Serial: Second serial rights refer to the use of the book's content for serializations, condensations, excerpts, digests, etc. in newspapers, magazines, or in other periodicals after the work is published in book form.
- Book Club: This refers to rights purchased by subscription book clubs (for example Book-of-the-Month Club), which offer the books off-price to their subscribers. Depending on the deal, a book club may either buy the book outright or buy the rights to reprint its own edition of the book.
- Permissions: This refers to the rights to reprint a chapter or portion of the book (in, say a textbook or other publication).
- Trade or Mass Market Paperback: If the original Work is published in hardcover, the publisher will often sell the rights for the paperback reprint.
- Other Book Publication: Refers to different editions of the book for special uses and markets. For example, large-type editions, mail order editions, premium editions, schoolbook or book fair editions.
- Translation: Translation rights may be, for example, purchased by a foreign publisher who wants to publish the book in the native tongue.
- Electronic Book: This sub right generally includes storage and retrieval of the text and visuals of the book on any or all digital media.
- Audio Recording: Audiobooks and the audiobook industry.
- Paper Products: Certain book content lends itself to being utilized for notecards, calendars, journals, etc.
- Commercial and Merchandizing: Popular book characters or other elements of a book can sometimes be exploited in tee shirts or other clothing, toys, mugs, etc.
- Performance: Sometimes casually referred to as "dramatic rights" or "film and TV rights," these are the rights to dramatize or adapt the work for television, radio, dramatic theater, a musical, a motion picture, or a video. These rights are generally reserved for the author (rather than the publishing house) and often negotiated by a secondary agent who specializes in dramatic rights.
It wasn't so many years ago that electronic books didn't exist as a format, so it's conceivable that new formats will emerge for sub-rights sales. Therefore, be very careful and avoid signing contracts with subsidiary rights clauses that seem too broad or inclusive in scope, like “in any format now known or hereafter developed.” You don't want to unknowingly give away what might be lucrative rights. Speaking of lucrative…
How Much Do Subsidiary Rights Pay the Author?
For a popular book, sub-rights sales can add up, though it's best to temper expectations (read more about selling a book's film rights, as an example). The rates vary depending on the rights granted but in general, the author should get at least 50% of the sub-licensed rights. Note that a literary agent may be able to negotiate better terms or retain certain subsidiary rights granted by your boilerplate contract.
Disclaimer: You should not consider this article a substitute for legal advice. When negotiating a book contract, seek the counsel of a literary agent or an attorney.