New York Times. December 15, 2009,
Authors Guild Fights Back on E-Book Rights
By Motoko Rich

The Authors Guild, a trade group which represents writers, posted a memo to its Web site on Tuesday disputing efforts by Random House, the world’s largest English language trade publisher, to claim e-book rights on old titles published before 1994.

On Friday, Random House, reacting to moves by some authors, estates and their agents to move e-book editions of old books to parties other than their print publishers, sent a letter to dozens of literary agents claiming that “the vast majority of our backlist contracts grant us the exclusive right to publish books in electronic formats.” Although those contracts may not exclusively give the publisher the right to publish e-books, Markus Dohle, chief executive of Random House, wrote that the contracts contained language such as “in book form” or “in any and all editions.”

But in the letter to the more than 8,000 members of the Authors Guild on Tuesday, the Guild noted that Random House “quite famously” changed its contracts with authors in 1994 to explicitly include electronic book rights.

“Random House felt the need to change its contract, quite plainly, because its authors did not grant those rights to it under Random House’s standard contracts prior to 1994,” the Guild wrote.

The letter continued: “Publishers acquire only the rights that they bargain for; authors retain rights they have not expressly granted to publishers. E-book rights, under older book contracts, were retained by the authors.”

The Guild advised publishers to focus on promoting their marketing strengths and negotiating “a fair royalty” for e-books. “We’re confident that the current practice of paying 25 percent of net on e-books will not, in the long run, prevail.”

Agents have been arguing that the current industry standard where publishers pay authors 25 percent the net proceeds that publishers receive from retailers on the sale of electronic editions is insufficient. They argue that such royalties yield authors less than they receive on the sales of hardcover books. What’s more, agents say, since publishers spend less to produce and distribute e-books, they should share more of those savings with authors, not less.

UPDATE: Stuart Applebaum, a spokesman for Random House, issued a statement in response to the Author’s Guild memo:

“While Random House respectfully disagrees with the AG’s point of view, we look forward to further discussions with their members and with the agent community about the dynamic initiatives presented in Mr. Dohle’s letter and about the royalty rate for the backlist titles, whose rights we believe are ours to maximize.”