The Reason behind Non-Compete Clauses, Lower Advances, and “Rights Grab”

Recently, I read a blog  against non-compete clauses. In the blog, the author argues that non-compete clauses are basically stupid and that “We’re seeing many publishers turn their backs on nurturing mid-list authors to champion quick-hit books.” It is really an interesting article, but also very short sighted in its argument.

FYI, non-compete clauses usually say that authors cannot have any other novel-length work come out for a full year before and after the book is published by that house from another publisher.

I understand that publishers look like big bullies to people, but there is a really good reason for this non-compete clauses: you don’t want to hurt your sales.

Hypothetically, say author A is publishing a YA book with publisher 1. That YA book is set to publish in June 2017. Now the author A wants to sell a second YA book, but publisher 1 passed on it and Publisher B is going to publish it in May 2017. Now if author A is a debut, guess what just happened: there are two books on the market and it causes problems across the board: awards, marketing, publicity, and for the author’s own sales.

Now, let’s change the situation: author A is publishing a YA book with publisher 1. That YA book is set to publish in June 2017. Now the author A wants to sell a second YA book, but publisher 1 passed on it and Publisher B is going to publish it in June 2018. Actually, that is fine. Publisher 1 passed on it, and the author and agent worked with Publisher 2 so that the books don’t interfere with each other’s sales.

Now let’s start again: author A is publishing a YA book with publisher 1, but also has a book at publisher 2. The editors work with the agents as much as they can to space the books  out so they are not directly competing against each other in the same season (spring, summer, or fall).

Non-compete clauses are not meant to stop authors from publishing books. They are meant to keep over-eager authors from hurting the sales of the book by flooding and over saturating the market. This is especially important with authors who are building their brand. When an author is not known, then having too many books on the market and not released in a controlled way does not help build your brand awareness.

Now let’s talk about these lower advances. Let me tell you something: you want the lower advance. Guess what, an advance is AGAINST your royalties. Which means that until you earn the amount of your advance in royalties, you don’t get your royalties. And if you don’t earn out, when you try to sell your next project, editors look at that and say, well you are not worth the super high advance.

But with a lower advance, you can a better chance of earning out and then it strengthens your position when you ask for a higher advance on your next book. Especially for mid-list author whose sales are steady, this is a much more practical and logical approach.

And for “rights grab”: yes, publishers will try to get the rights, mostly because we have the resources to sell those rights. But if your agent is good, they have some resources. Publishers are open to negotiation. Now here’s a tip: the higher your advance, the more the publisher wants to get certain rights, because they want to guarantee they can maximize a return on investment. YET another reason asking for a lower advance works in an author’s favor.

Overall, the best advice I could offer: ignore that other blogger, find a good agent, and ask smart questions: should I get an higher advance (pros and cons), what rights can you reasonable sell and what should I keep, etc.

And if you are a self-published author, don’t over saturate the market without building up your brand first.

*I do not speak for my publishing house, but as a logical, educated human who studied the publishing industry for grad school*

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