How often do publishers pay license fees



As part of my teaching assignment at the HTWK, I spoke to Franziska Hildebrandt, head of the Rights & Licenses department at Campus Verlag

You studied at the HTWK Leipzig and graduated in 2001. How did you make the step from university to head of the rights / licenses department at Campus Verlag?
At first, Campus Verlag didn't really have a rights and licensing department, because for a long time the focus was on science and business, nothing that can be sold to a large masses abroad, but also in Germany. That changed from 1998/99 with a few bestsellers. I had written my thesis on the exploitation of secondary rights and had done an internship at Eichborn at the time. The Eichborn license administrator recommended me and gave me great support. We are now a department with three colleagues.

When did you get interested in rights and licenses?
During an internship in England at a publishing house that made engine books. Books are sold in American and English houses around the world, and I found it exciting that you can find partners all over the world. Everyone knows a John Grisham or Stephen King, but many small and medium-sized publishers also have very well-functioning licensing departments and sell the craziest things all over the world. A friend of mine has just sold a guide on parsley growing to Asia.

What are the requirements to be good at this rights and licensing business?
What to be aware of: It is definitely a sales job. And for that you have to like your products. I am an enormous fiction bookworm, but I value our specialist and non-fiction books and can sell them with a clear conscience. What I mean by "selling" is that you get a feeling for what the other person wants. If I have half an hour at the Frankfurt Book Fair with a Korean publisher, I have to find out what they want. And I have to do that half an hour later with an English or Spanish publisher. A rights and licensing department is also very concerned about sustainability, you have to maintain contracts and contacts, you should be able to organize a good back office.

So language skills are a prerequisite?
Most negotiations are conducted in English. But I also know colleagues who specialize in certain markets, such as French or Spanish speakers. There are, on the other hand, many Asians who speak German and, what you have to say, in the licensing business, a lot is done through agencies. For example, I have an agency that plows all the Spanish-speaking countries for me, and with this agency I speak German, and they in turn go to their markets and speak Spanish with their publishers there.

How does such a license deal actually work? You offer the portfolio to foreign publishers and then?
You need a good catalog that includes the titles that you have to offer. But the book fairs in Frankfurt, London and Leipzig are only a starting date for what will actually come next. Let's take an example: I spoke to a Korean publisher about five books. The Korean agent is interested and orders these books. We will then send them as PDFs or as an original book. The editor in Korea or Buenos Aires looks at the book from Campus Verlag to see if it is so unique and great that it needs to be translated. As an English publisher, you can send your books anywhere, as the editors understand them as a rule. As a German publisher, I often have to buy a service, namely a “reader”, someone who checks, evaluates and appraises this book. So, a lot of things have to come together for the Brazilian or Korean publisher to say in the end that it is interested. If we really expect a lot from a book, we do a test translation, which is unfortunately expensive and labor-intensive, but if in doubt it is a better choice because it simply attracts more attention to the book.

What was your most successful license sale?
“Simplify your Life”, a life help guide. It has sold over 700,000 times in Germany alone, and I have sold it in 33 languages. There is an English edition at McGrall Hill in the USA or a small edition from Thailand in beautiful characters. For that, as a licensing department, you are loved by the authors, because every author likes to say about himself that he has been translated.

What are the chances of authors being sold abroad?
After ten years of experience, I am now very realistic about this, and I tell many authors who see themselves in a large English publisher that it is guaranteed not to work. We do 70 to 80 foreign license agreements per year, and when it comes down to it, two to three licenses in English are included. It is all the better that it almost always works in other countries. The Netherlands, for example, is very close to us in terms of topics and approaches, while the Asian countries are very interested in life support.

How important is the department within Campus Verlag?
Campus Verlag has around 35 to 40 employees. We produce around 240 titles a year. And the licensing department is the last department that plays a role in this book exploitation chain. I am the only one with my two colleagues who is still really concerned with the 2011 spring program. Our editing department is working on the spring program 2012 and is already thinking of autumn 2012. Our sales department is definitely already in autumn 2011 and the press is planning autumn 2011. But for us this program that is now being delivered is the program that we are selling. This has the advantage in-house that we don't have to be present in a large number of processes. I also attend program conferences so that I know what's going to happen in autumn - and I can then also say that certain titles are very good for us and certain titles will not play a role for us - but in the actual process, when purchasing, we don't have to be there. The advantage is that what we earn is additional income for the publisher. Campus makes around ten million euros in sales per year and the licensing department makes around eight to ten percent of that. Quite nice for additional income. There are only conflicts of interest between the departments when I sell paperback rights. If a hardcover guide sells 20,000 to 25,000 times a year, that's of course a cash cow for sales. The moment we make the internal decision to put the title in the paperback, nobody will buy the hardcover for 20 euros anymore. So we calculate that, what will the paperback bring us and what will we earn if we continue to sell it leisurely 20,000 times a year?

Campus doesn't make its own paperbacks?
No. The paperback publishers have a very strong profile in Germany. The big houses send a catalog of 300 to 400 titles around twice a year, and they have an uncanny trading power. The distribution system is also different, paperbacks appear monthly. To really populate such a paperback program, we would not have enough books. The group publishers such as Rowohlt, S. Fischer or Random House, of course, exploit their licenses themselves.

Are there typical pitfalls in the rights and licensing business?
Of course, what I like most is that I have several interested publishers in one country and that we can auction the title. But often the opposite is the case, that it is very difficult or even impossible to find a publisher. At the English publishers I also sell licenses from time to time without getting any money. It's bitter, but if I can find an American university press for one of our scientists who is willing to publish this book, I would almost pay a little more for it. In the academic field, many authors also have to be published in English in order to be recognized. Another example: Usually the moment I sell a license, I send the contract to the licensee, on my terms, of course. McGraw Hill would never sign a contract with a German publisher. Then they prefer to do without and just don't do the book. So that means, at this moment I get an English-language contract from McGraw Hill, I may still be able to discuss two or three points, but please not the important ones, and I have to swallow the remaining passages. That annoys you, and it is actually not customary either.

To what extent do your duties include electronic rights, e-books, etc.?
Recovery is no longer my area. In 2003/2004 we already signed a number of contracts on the subject of e-books, but it quickly turned out that this is actually a sales task, a different form of our content, like an audio book. And that's why we then resolved it from the licensing department and passed it on to sales. That is still a lot of mess, but it works through the bulk.

What is the share of e-books in sales?
About 10 percent. But you have to see that Campus has a typical managerial clientele. They are internet-savvy, work a lot with their laptop, BlackBerry or iPhone, that is, when they sit at ten in the evening at a lecture on leadership that they give the next day, they go online and read the necessary chapters on the platform from the various books. I also know that other discussions take place in fiction publishers. It's easier for us.

If a certain topic works in Germany, it doesn't have to work in France, Italy, Spain or Asia by a long way. Over time, do you get a feel for which topics are particularly popular in which countries?
You can determine that very clearly according to the direction of the compass. In the east, in the Asian countries, there is a tremendous amount of interest in German management writers, economics and advisory topics. In the east you look at the west, just like we always look at the USA. On the one hand that suits us very well, on the other hand we are competing very strongly with American publishers, who are usually five years further. In addition, we buy a lot of the big issues from the USA ourselves. Within Europe, Eastern Europe works very well for us, and that has increased tremendously in recent years. Russia and Poland in particular are also large markets. It will be more difficult in Western Europe. In France and Spain you really have to have an outstanding author or bestseller in business and non-fiction to get someone interested. In case of doubt, the French university has its own management mastermind, or you bought the American management mastermind, why exactly should you take the German one?

We don't buy French guides or management books either.
Correct. And that is also the case in Spain and Italy. We once did a non-fiction book, "The Dictators' Wives". This is an example that we have sold particularly well here in Europe.

How much does the author get from the royalties, 50:50?
We are suffering a little at the moment. The classic publishing contract says that the author has a fifty percent share in the exploitation of ancillary rights. But the more agents in Germany sell us book ideas, the more the contracts change to 60:40. That means, if I do a paperback deal for 10,000 euros, 6,000 euros go to the author. In terms of total sales, these 10 percent are of course a chunk of money that the publisher lacks.

Campus Verlag is based in Frankfurt, you work from your home office in Leipzig. How does this work?

Because the license department is a downstream department, this is quite feasible. Someone from editing or production couldn't do that for sure. I lived with my husband in the USA for three and a half years and worked from home from there. It doesn't matter whether I write my e-mails to Korea from Detroit, Frankfurt or Leipzig to enter into negotiations. I am in Frankfurt one week a month, and during this week we at the publishing house are of course clarifying a lot of strategic issues.

What is your approach to buying titles or how much influence do you have on it?
The editing department does the title purchase. In other words, the titles or publishers watch what is happening in the US and what is happening in the most important markets. And it is only at the moment when you have decided to buy a book at the program conference that it is the turn of the licensing department. The other way round, I have to be present with my books elsewhere, that is, if there is a small campus publisher in Lithuania, it has to realize that there is a medium-sized campus publisher in Germany that fits its profile. I need to get that attention. There is a magazine in English-speaking countries called “New Books in German”. This is sent to around 70,000 contacts every six months. It's my job to get in there. The Frankfurt Book Fair operates the Book Information Center (BIZ) in New Delhi or Beijing. There are three Chinese women who speak German very well and are trying to sell German titles to Chinese publishers. You have to get a lot of attention and publicity. Once you've had a bestseller, or once an author's name is known, it gets a little easier. My colleague met a publisher from Vietnam at the trade fair in Frankfurt; we have never had any contact with Vietnam. And he has now bought three bestseller titles and is currently publishing them.

What do you get for it?
600 euros. [Laughs] That's exactly why we're not selling to Laos or Nigeria - the smaller the language, the more expensive a translation, and unfortunately the less attractive it becomes.

How can you be sure that those who bought the licenses will not sell them again themselves?

By appreciating and respecting your contractual partners and hoping it doesn't happen. You can't control it. I just have to trust that my Chinese publisher is paying attention to what is happening in their printing house and that if 20,000 books have been agreed, 40,000 will not be printed and the remaining 20,000 will be sold somewhere on the street. But I can't control it. Ultimately, that is the responsibility of the Chinese publisher. With my license agreement, I oblige him to maintain and protect my copyright and his own copyright.