Authors and Acquisitions

What does the acquisition of one publishing house by another mean for an author? Since the announcement of the acquisition of Canada Law Book by Carswell Thomson, I have received a number of calls from authors and editors asking me questions relating to the acquisition and what it will mean to them.

Is one legal publisher better than another?

Needless to say, it can be a bit disconcerting for an author to learn that his or her publisher has been sold to a competitor. In persuading an author to sign with Publisher A, as much effort would have been spent highlighting the demerits of Publisher B, as was spent in touting the merits of Publisher A. Ultimately the author was persuaded that he or she had escaped the clutches of Publisher B by signing with Publisher A. What a shock it must be then to learn that the escape was only temporary.

In reality, the arguments pro and con for one publisher over another are pretty standard. When making the case for the smaller publisher, with no similar titles, the argument is made that it will be able to provide individual attention to an author that the larger publisher, with “too many titles to be able to market any of them effectively”, cannot possibly provide.

When acting for the larger publisher, you say the reverse – that its greater market penetration, better lists and better marketing and sales infrastructure, will make it possible to effectively reach everyone who may be interested in buying your publication.

Both claims may be true. The most important thing is the personal relationship that an author develops with the publisher’s editorial, sales and marketing staff. It is individuals within organizations that can make things happen. When changing publishers for whatever reason, establishing relations with the new publishing team is a priority for any author.

Can a publisher effectively market competing publications on the same subject?

The simple answer is yes, at least most of the time. Strategies for handling seemingly competitive publications have been used effectively for some time. As a general rule, legal publications rarely duplicate one other. At the very least, the law is presented from the unique perspective of its author, but strategies such as enhancing product differentiation, staging production dates, and market segmentation are also used to differentiate similar publications from each other and lessen direct competition.

However, real problems may arise when an author has developed a publication for the express purpose of competing directly with another publication and both end up with the same publisher. One example of this is Watson and McGowan’s Ontario Civil Practice which was written and published to compete with Carthy’s Ontario Annual Practice. How this will play out will be something to watch. There are no easy answers in such a situation.

Are digital products different from print?

Digital products are more problematic. In legal publishing, the current trend is to offer composite online products such as Criminal Source and Criminal Spectrum, which gather together publications by many authors that are marketed and licensed as if they were a single product. The credibility and appeal of such products lies in the fact that they include many well known print publications.

In a composite online product, the strategies used for handling similar content in print publications do not work. Each individual publication becomes just another “chapter” of the new product. In these circumstances, there can be no product differentiation, no staged production dates, and no market segmentation.

Major issues for an author may be raised by this transformation. They include such things as marketing, royalties, valuation of content, and search sequences. These issues would be compounded if and when Criminal Source and Criminal Spectrum are merged into a single online product.

Marketing. Marketing may be an issue because the publisher advertises the product by the new “brand” name established for the online product. References to the authors and titles of publications- the old brands on which sales of the new brand is based – are often not mentioned at all. This is the reverse of what is happens in the case of a print publication. For an author who publishes for the public profile that comes from advertising, this may represent a major loss.

Royalties. Royalties may also an issue. With a print publication, the percentage is standard and the royalty calculation is simple – if a publication is purchased, a royalty is payable, whether the publication is used frequently or not at all. Although the composite online product is sold based on the idea that it provides access to an electronic book shelf, royalty payments are generally based on the publisher’s unverified calculation of usage relative to other content contained in the same product.

Valuation of Content. Usage is determined by a formula or algorithim that connects the royalty rate set out in the author’s contract with time spent searching information from different sources in a composite product. In devising these formulas, the publishers attribute equal value to the time spent searching primary documents as well as to the content generated by an author, but only pay royalties on the secondary content created by an author that is used to locate the primary document. This practice is questionable given the falling value of the primary documents that has resulted from the emergence of free services like CANLII and may be the subject of future disputes.

Search Sequences. In a composite online product, the structure of the product directs the customer to use one publication in preference to another in a search sequence. If the information contained in three publications is found by the researcher in the first publication in a search sequence, there would be no need to continue the search in the remaining publications. Some authors may object.

In the best of all possible worlds

Now is the time for an author to raise questions and engage in a dialogue with the publisher. Both the author and the publisher are looking to establish a productive relationship. In the early stages of a merger, an author has leverage, especially with regard to digital rights. Publishing contracts signed before the digital era did not address the issue of digital rights, which are presumed to remain with the author. Without an agreement in writing, the publisher’s right to use the content in an online product and the manner in which the royalty is calculated may be in question.

In the best of all possible worlds, the issues that arise following a corporate acquisition will sort themselves out in a reasonably short period of time. However, where they do not, an author has the option of asking for a full release from the contract and the return of all rights to and copies of the publication.

In the case of the acquisition of Canada Law Book by Carswell Thomson, the authors of both companies are fortunate in that they will be in the hands of experienced professional editorial staff who will be able to address many of their concerns. Even now, authors are being contacted to give them the required assurances of continuity and support. From the perspective of the authors at least, the acquisition is off to a good start.