Book Publishing Royalties on Coda
How do book royalties work on Coda?
Much like the music industry, the book publishing industry also has a complex rights structure that covers everything from physical sales to digital sales, audio books to adaptation for film, tv and radio, reprints, and more.
Through Coda, writers and published creative works can now be tokenized as Royalty Rights Tokens and authors and publishers can gain access to an untapped stream of royalty revenue by sharing in the success of their works with fans and investors.
Basic Publishing Rights
The basic publishing rights surrounding a written work are pretty simple, they are the rights to publish and reproduce an authors works for distribution or sale. These are the rights that such distributors like Amazon and Google Books are granted (known as Grant of Rights) when a writer or publishing company sells a book through their platform. These rights are granted in usually three different forms:
Physical publishing – the right to distribute physical copies of a book
Digital publishing – the right to distribute eBooks and digital copies of a book
Audio publishing – the right to distribute audiobook copies of a book
In most cases the rights will be owned by the author or publisher and granted or licensed to the distributor for a period of time.
Rights to Publishing Sales Royalties
When a book is launched, the distributor will generate sales revenue from the reproduction and distribution of the written works. These sales will generate royalties for the author or publisher which usually have a percentage retained by the distributor for their part in getting the book out into the world.
These Publishing Sales Royalties are what we work with at Coda. Allowing fans to generate passive income from the success of written works, whilst supporting authors by investing in their creative works. Allowing writers to tap into their long-term royalties for early financing of future works.
These generally come in three main forms the same as the basic publishing rights in royalties to physical sales, digital sales, and audiobook sales.
One major difference between royalties in the music industry and in the book publishing industry is that royalties are sales revenue returns, which are generally a lot larger than individual streaming royalties for music. For example, a book may be on sale in amazon for $1 and an author may have a 35% royalty agreement with Amazon. This means one sale or distribution would return $0.35 in royalties to the author. So, 1000 sales generate $350 in royalties, a lot more than 100 Spotify plays!
Additional Rights
In many cases there are additional terms that are included within a book publishing sales royalty agreement that can also affect the outcome of the royalties.
Foreign rights
The rights to royalties for reproduced works in foreign languages and also in different countries
Territory rights
The rights to royalties from different or specific territories
TV/Film/Radio Adaptation Rights
The rights to the royalties for adaptations across different media
Musical/Theatre Adaptation Rights
The rights to the royalties for theatrical adaptations of the works
In many cases, both foreign and territory rights are included in royalty rights agreements, whereas adaptation rights tend to be additional clauses included on top of basic agreements.
Copyright
Copyright is the overall ownership and right to make use of the works in many different forms and is always originally held by the creator of the works. In many cases this can be sold or licensed to a publisher or in the case of adaptation, a film or tv company. It is very rare for copyright to ever be included in a royalty rights agreement. This means holding a royalty right does not give the rights holder permission to reuse or adapt the work in any way.
Royalty Rights Tokens for Books
A Royalty Rights Token (RRT) is a digital asset that is assigned legal rights through digital signatures that enables an author to split up their royalty rights to their works into multiple individual rights to distribute to fans and investors. This allows a right to be held by hundreds or thousands of individuals at the same time.
These RRTs provide a reference for the distribution of royalty rewards to individual holders, making sharing of royalties by authors and publishers possible at scale. Investors and fans have the opportunity to gain access to passive income from generated royalties the more successful a book is, the more royalties are generated, also creating an incentivised ownership relationship between the author and the RRT holders. Authors can share in the success of their works, whilst also having the ability to tap into the long-term value of their royalties by selling part of their rights to their fans.