Artists and writers have long submitted short stories, webcomics, and fan works to online literary magazines or on fanfiction websites as a way to hone their skills and gain exposure. Creators and their works span the globe and range from literary-style web novels to Japanese manga. In recent years, however, platforms have begun offering publishing contracts to creators. Korean and Chinese-styled comics, known as manhwa and manhua respectively, and Japanese light novels styled web novels, have become particularly popular on such platforms. Several successful series by global creators have used the platforms and leveraged global exposure into publishing deals. With these contracts becoming more common, creators should understand what rights they may be signing away and what obligations they might incur. While the number of terms and provisions in these contracts are too numerous to discuss here, this blog post will cover some of the more important rights and terms in these agreements.
Compensation
Compensation in these deals typically takes one of two forms: (1) a flat fee or dollar per word amount (the latter being much more common in literary magazines), or (2) a revenue share where the creator receives a certain percentage of revenue derived from subscribers, advertisements, etc.
Some flat fees or pay-per-word arrangements include milestone schedules and deadlines. Under a milestone schedule, a creator must regularly publish new chapters according to a schedule to receive their payment. Failure to comply with such schedules via delays or abandonment of the project may be considered a breach of the contract.
Revenue share is typically determined from net revenue, which is revenue left after the platform deducts certain costs and expenses. There is no standard definition of net revenue or standard deductions. If net revenue and deductions are defined too broadly or vaguely, then a platform may deduct more than the creator anticipates and leave little actual revenue share for the creator.
Copyright
Unless the contract is a work-made-for-hire agreement , the creator will initially own the copyright to their work regardless of whether they register such copyright with the copyright office. A platform may attempt to get the creator to assign ownership of the copyright to the work over to the platform, but such practices are rare. Just because the creator retains ownership of the copyright, however, it doesn’t mean the platform won’t use other methods to control the work, such as exclusive licenses (discussed below).
License
Rather than assignment of ownership, a publishing agreement will take the form of a license. Different types of licenses will convey different levels of rights to the platform. For example, an exclusive and perpetual license or a license for the life of the work’s copyright can effectively prevent the creator from exploiting the work. To learn more about different types of license grants, you can read this blog post on “Understanding license agreements for Creators.”
Right to Purchase the IP
A platform may include an option to purchase the intellectual property rights to the work at a future date or upon a future event. Setting the terms of the IP purchase early (i.e., before a creator determines the popularity of the work) may allow the platform to acquire the work for a cheaper price than the actual value of the work.
Exclusivity
A platform may require that the creator publish their works exclusively on the platform. Depending on how the exclusivity language is drafted, this may cover just the particular work itself or it may include any future works as well.
Sequels and Future Works
A contract may have a right of first refusal, which gives the platform the first opportunity to publish or adapt a creator’s new work before the creator can offer it to other potential publishers or platforms. Depending on the language, this may apply to only direct sequels and prequels or to any new work regardless of its connection to the original work.
Ancillary Rights
Ancillary Rights are subsidiary rights regarding the ability to use a work in other mediums. These includes the right to adapt the work into film, television, radio, stage adaptions, video games, merchandising, and more. These rights should either be clearly addressed outside of the main rights to the work or they should be explicitly reserved by the creator and held for future negotiations.
Conclusion
Creators need to understand the types of compensation they are receiving, the types of rights they may be assigning or licensing, and any other provisions and terms that can effectively control their work. This blog post covered only some of the notable compensation, rights, and obligations creators may face in a platform publishing agreement. Creators should not hesitate to reach out to a lawyer if they need an in-depth review of their agreement or assistance with negotiating terms.
