Q&A: Textbook succession planning–What is a reasonable royalty rate for the original author?

Q: “What is a reasonable royalty rate for an author whose name will remain on a (successful) textbook, but who wants to stop doing the revisions? What sort of language in the revisions clause can protect your heirs?”

A: Zick Rubin, Attorney, Archstone Law Group P. C.:

“This is a very important item. Here is a formula that is sometimes proposed by authors and that is sometimes acceptable to publishers for a successful textbook: 75 percent of the royalties (i.e., the contractual rate) in the first edition in which the author does not take part, 50 percent of the royalties for the second such edition, and 25 percent of the royalties for the third and subsequent such editions.

Q&A: Timeline for textbook royalties: When should you get paid?

Q: “I am concerned about the length of time a publisher can hold onto royalties. Mine are due in April, four months after the close of the accounting period in December. This means some monies have been held from July 1 through April — 10 months! I would think interest should be paid or royalties sent out on a more continuous basis.”

A: Steve Gillen, Attorney, Wood Herron & Evans:

“The publisher’s obligation to account for and pay royalties is set forth in the publishing agreement. While the timing of payment and the nature of information contained in the reports may be negotiable, the time to negotiate these issues is before the agreement is signed. Once the deal is done, it’s too late for the author to complain. Historically, publishers have paid royalties on an annual or semi-annual basis (providing reports and payments anywhere from 30 days to four months after the close of the relevant accounting period). I suppose there was a time when this delay was justified by the difficulty in processing returns and credits and closing the books. Now, however, it persists as custom rather than of necessity.

Q&A: Hardcover vs. Paperback-Which option is better?

Q: “My publisher has asked if the 5th edition of my book should be published in hard or softcover? The first four editions were all hardcover. Do you know of any reasons to favor one over the other?”

A: Don Collins, the author or co-author of seven school mathematics textbooks, and former Managing Editor of Mathematics at Merrill Publishing:

“The answer to this lies in the royalty agreement. If the agreement is so much for each text sold, then by all means go the paperback route. However, most publishers base their royalty agreements on dollar volume. In this case certainly since paperbacks are cheaper and do not last as long, then more of them will be sold. So one has to consider which is greater: Cheaper price X more volume or Higher price X less volume. The author sort of has to roll the dice. In most case there isn’t a great deal of difference. I don’t think you can go too far wrong either way, but if it were me I would go the paperback route.”