What are the major contract/copyright issues facing editors and freelance writers in Canada these days?

This is the question that set Michael OReilly and Corinna vanGerwen off on an email debate for J-Source that spanned a number of days in March and covered issues ranging from freelance incomes and inflation to rights management, licensing and technology.

Corinna vanGerwen is senior design editor at Cottage Life magazine and former senior editor at Style at Home. She is also the Canadian director of Ed2010, a community of young magazine editors that began in New York and spread across the U.S. and into Canada and the U.K. She also blogs at Dream Job TK.

Michael OReilly has been a full-time freelancer since 1992. His work has appeared in publications such as The Globe and Mail, Canadian Geographic and Maclean’s. He is currently interim president of the Canadian Freelance Union.

Below is a full transcript of an email exchange between OReilly and vanGerwen that took place from March 16 to March 20, 2009

From: Michael OReilly
To: Corinna vanGerwen
Sent: March 16, 2009 12:09 PM

The single major issue facing freelance writers in this country is simple survival. But to be more specific, plummeting rates and ever-increasing rights demands make it almost impossible to freelance for Canadian newspapers and magazines. The two issues are really just different sides of the same coin.
 
#1. On the rates side, the numbers say it all.
 
In 1979, the average annual income for a freelance writer in Canada was around $25,000. In 1996 the Professional Writers Association of Canada (PWAC) conducted a new survey on rates. They found the average annual income was about $26,000. In 2006 PWAC released its latest survey results. It shows a full 61% of freelancers making under $25,000, with nearly 40% making less than $10,000. The average income had dropped to $24,000.
 
But these numbers only show half the picture. Between 1979 and 2006 inflation grew the cost of living by about 165%. What cost $1 in 1979 cost about $2.65 in 2006. It now takes about 65% more money just to be at the same economic level, compared to 1979. Yet freelancers are still receiving the same $1 they did thirty years ago.
 
Newspapers and magazines certainly don’t expect to pay 1979 rates for the paper they use, the equipment they need, the utilities they require and even the editorial staff they hire. Why is it that freelancers — the ones who largely create the stories told in our magazines — why are they the only ones facing this decline?
 
#2. On the rights side, most periodicals now demand a wide transfer of copyright as part of the basic assignment contract. Not that long ago freelancers sold (technically we licensed) a limited print-right to a periodical; first serial rights, one-time print rights, etc. Additional rights such as second print or translation, were always negotiated separately, and usually involved additional money being paid.
 
This arrangement was crucial given the continual decline in rates. It allowed freelancers to re-license their work to different markets, thereby making up for the poor individual rate being paid. In some ways, this masked the overall problem of declining rates.
 
Today however, even that option of making multiple sales has been taken away. Today most freelance contracts include “all-rights” clauses, which strip away virtually all economic value and pay peanuts in return. Language such as, “all rights, in all media, now known or hereafter devised,” is common. Publishers demand virtually all print, digital and broadcast rights, all for the paltry sum of a few pennies per word. Media companies are repackaging, reselling, and repurposing the “content” produced by independent media workers. They are finding new ways to profit from the work we produce, and are ensuring that all the money stays in their pockets.
 
Media ownership concentration is making this whole thing a lot worse. Because fewer and fewer companies own more and more of our media, there’s no getting away from these contracts. From Rogers, Torstar, and Quebecor, to Canwest, Transcontinental and CTVglobemedia, the demands are the same. And in most cases there is no option to negotiate. Freelancers are told to “take it or leave it.” Of course, “leaving it” is rarely a real option.

Editors are not to blame for this state. In many ways, they suffer nearly as much as freelancers do. They understand what they are demanding their valued writers to give up. They know the rates are crap, but they have no real choice in the matter (just like freelancers, faced with “take it or leave it”). Much like with other problems in our economy these days, the core causes come down to power and greed.
 
It’s unfortunate, because it doesn’t have to be this way.

Mike

From: Corinna vanGerwen
To: Michael OReilly
Sent: March 17, 2009 12:35 AM

Survival is definitely an issue for freelancers, but before rates can be addressed, we have to consider the bigger issue that faces the entire industry: the very concept of copyright and rights usage, and its practical application to the production of magazines and other media. Copyright is the foundation of our industry, as in all creative professions, and rights management hasn’t evolved at the same pace as technology and media formats have.

Whether we like it or not, audiences have come to expect content for free, and they’re not very particular about whether that content comes to them through the printed page, a website or via their phones. In order for media companies to stay relevant and survive (and continue to purchase content from freelancers), they need to be able to serve up information to audiences in a multitude of ways.

I will not argue that freelance writers shouldn’t be paid more, but I will argue that we need to rethink what constitutes first rights. Print, web and mobile, at the very least, should be considered one package – first-rights use for the brand, let’s say.

Let’s take the case of photographers, who have been successful in retaining many additional rights. Because in most cases websites are required to pay second-use fees of usually $100 to photographers, web editors often forego using the images that originally accompanied an article. That article is then posted online with different images, or not posted altogether. The photographer misses out on the additional fee that they negotiated the opportunity to get, and possibly the writer, if not paid upfront for web rights, has lost additional income as well if the article doesn’t get posted. The very rights fought for have got in the way of the purpose of those rights: the chance to earn an income.

On top of that, the magazine’s site may end up being inconsistent with the printed brand, and arguably of an inferior quality. It is the interests of not just the publishers, but of the freelancers who benefit from the work those publishers provide, for those sites to reflect a strong brand and be able to compete against other magazine sites as well as the other millions of websites out there.

More beneficial to all, and an easy way to reduce administrative work and costs, is to pay a larger fee upfront for the package of rights. Additional fees should be limited to republication at later dates, including translation fees. As for the “all media, now known or hereafter devised”, this clause in and of itself is not an issue, particularly as it relates to archiving work. Without it, the industry would run into the problems that the DVD market has, with the inability to rerelease past television series because their hands were tied by cost-prohibitive and logistical-nightmare music-rights issues (for example, WKRP took years to make it to DVD and Wonder Years is yet to be released). You just don’t know what will come up in the future, and it would be a shame for all that great material to disappear into the deep archives because it’s just too much of a nuisance to deal with the rights issues. 

It is not unreasonable for first rights to include publication to multiple formats.

Corinna

From: Michael OReilly
To: Corinna vanGerwen
Sent: March 17, 2009 11:04 AM

Freelancers are not opposed to licensing additional uses of our work. Licensing use is how we put food on the table! The issue is not over our willingness to sell, it’s over the publisher’s willingness to pay a reasonable price.

As I’ve said, and as the data clearly shows, publishers keep driving rates down. They’ve been doing this for decades now — long before the advent of digital media, and long before the concept of “copyleft“. In 1979 (and probably before then) the top rate for magazine work was around $1/word. Nearly 30 years later the top rate is still around $1/word. This has nothing to do with the notion that “audiences … expect content for free.” This has everything to do with who wins at the negotiating table.

If it was simply a copyleft fact, then you’d also expect publishers to be paying the same amount for paper today as they did in 1979, the same amount for electricity, for pens, and for staff editors. None of this is true, so why are freelancers the only ones who must pay the cost of “audiences wanting everything for free”?

In a painfully ironic way, this copyleft development is somewhat welcome. Now “our pain is your pain.” Publishers are now facing the same kind of threat to their copyright, and their livelihood, that we freelancers have increasingly faced for decades.

Welcome to our world 😉

But getting back to the real issue, freelancers are more than willing to license or even sell whatever a publisher wants. They want it easy? They want it all? No problem. Simply pay a fair price.

And what is a reasonable price for “all rights”? There is an active and vibrant existing market to draw on: corporate and government writing. In these sectors the work is typically done under an “all rights” contract. The rates reflect this: $2 to $5 per word (although the projects are usually quoted in $/day, not $/word). I’m more than happy to sell it all — I just want a fair price for my work.

I understand the economics of publishing. I know it’s a tough world. That doesn’t change the facts that while other costs have gone up — and been accommodated in the publishing business model — freelance income has been systematically forced down. This is doubly painful given the fact that, despite the constant call that the economic sky is falling, periodicals in this country have remained a profitable sector.

The most recent data from Statistics Canada (2004) shows the overall profit margin for magazines to be a healthy 9.7%. The five-year average (as reported by Stats Canada) is 6.6% — not overflowingly rich, I grant you, but certainly not sinking. Newspapers from 2002 to 2006 (the most recent stats) show an even healthier average profit of nearly 14%.

Yes, the current picture will be somewhat bleaker, but the fact remains that freelance rates are being driven down, not due to lack of ability to pay, or any sense of real equity. They are being driven down simply due to the fact that it is possible. In the market dynamic, publishers are big and freelancers are small. At the negotiating table, we lose.
 
Mike

From: Corinna vanGerwen
To: Michael OReilly
Sent: March 20, 2009 10:51 AM

So then we agree that writers should be paid more upfront for additional rights. My personal experience has been that this is exactly the case – usually an additional percentage tacked on top of the story fee, or when this isn’t the practice, a percentage of the original fee paid at the time of posting online – although I recognize that this may be changing as new contracts are introduced. But obviously one person’s experience isn’t a representative sample, and this is where I’m at a disadvantage, since, Michael, you have had opportunity to examine many contracts. You mention corporate and government writing as a model of fair pay for a number of rights, but my understanding is that an example does exist in magazines: doesn’t Reader’s Digest pay double industry standard for more extensive rights? Is this a model you feel all publishers should follow?

And I’d be interested to hear more details on a strategy for implementing higher fees. Obviously a business can’t double its expenses overnight across the board.

Personally, I am of the mind that the situation isn’t as bleak as some would say, and that there is in fact plenty that individual freelancers can do to improve their lot.

The “negotiating table” is usually a phone call between a writer and editor, discussing an assignment, and the truth is that negotiating rarely happens. This is a perfect opportunity for writers to point out that a higher fee would be appropriate, but I have had only three writers ever ask me for more than my original offer. Each time they made a reasonable argument for a higher fee based on the work requested. And each time I was able to give them if not all they asked for, at least more than the first offer.

And it would not be unreasonable for a writer to request a higher rate if asked to sign a contract that called for additional rights. The editor may not have control over the publisher’s devised contract, but she can ask for approval on a higher fee. Likewise, I think freelancers who have been writing for a magazine for many years, are in their rights to request a “raise.” Editors are very busy and are always looking for ways to make their jobs easier. A veteran writer who turns in clean copy on time and is a pleasure to work with, has a good case for requesting a higher per-word rate. If she presents a reasonable argument based on the facts of her past performance, most editors would likely be completely willing to then take the request to the EIC and try to get that increase for the writer. Editors are the writers’ cheerleaders, but we need freelancers to give us the ammunition to fight on their behalf.

And if the writer “wins” (I think this is a false concept, since writers aren’t in battle with editors), it’s one small step in a series of many that need to happen in the evolution toward freelancers being able to make a fair wage. Because really, this “battle” needs to play out over and over again, in small steps, through many conversations.

Those fixed fees that you speak about (the building costs, the paper costs, etc.) that keep increasing, that publishers pay current market rates for – those companies are asking for more money (based on very concrete expenses involved in providing those goods). Collectively, freelances say they’re asking for more money, but if my experience and those of my editor peers are an indication, writers aren’t asking for more money when it matters: when accepting a new assignment or signing a new contract.

It’s not going to work every time, but the more editors and in turn EICs and thus publishers hear the demand for more, those budgets will hopefully slowly increase.

Corinna

From: Michael OReilly
To: Corinna vanGerwen
Sent: March 20, 2009

I think you’ve really hit the nail on the head. We writers are our own worst enemies when it comes to finances. Negotiating skills seem to be absent from the DNA of most freelancers, a fact which is amazing given that freelance writing is fundamentally a business (just like publishing).

When I was into my third or fourth year of full-time freelancing (I’m now closing in on my 20th year) I decided to raise my income by asking for more. I made a decision to never accept the first financial offer made by my editors, and to always ask for more. In virtually all cases that year the editors (who often seemed surprised that a writer would make a financial counter-offer) agreed to my increase. In only one case there was an outright no, and in a small number there was a counter, counter-offer.

In that one year I nearly doubled my income, so I absolutely agree with you Corinna. Publishers are in the business of making money. They do that by maximizing revenue and minimizing costs — just like any business. For publishers, freelancers are simply a cost to be minimized. The reverse is also true of the freelance business: we need to maximize our revenue, and minimize our costs. But the reality, as you point out, is that freelancers are not very good at the revenue side of the equation.

So I fully agree with you; freelancers need to demand more. But that only works to a point, and this is where market realities intrude. An individual freelancer can be the best negotiator in the world, but they still will not be able to command a decent rate these days. The imbalance of power at the negotiating table is very real, and is getting worse due to the continual increase in ownership concentration.

You say the negotiating table is a phone call between the editor and the freelancer. At the first level, this is true. But the editor is dealing with a limited freelance budget which has been set by the business’ owners. The freelancer and the editor can negotiate, but only within that pre-set bracket. I don’t have to tell you that freelance budgets have either remained static, or in most cases, been reduced in recent years. This is not a financial necessity. This is a market choice based on what publishers need to pay.

I certainly don’t blame editors for this situation. As I said in an earlier posting, in some ways editors are in the very worst position. They are caught in between two business demands. They (you) have to balance it all while still putting out a product — or they get fired. A good editor is a writer’s best ally, and I fully agree that writers need to empower their editors with demand for more money. This allows the editor to “fight the good fight” within the company.

But all of this like moving the proverbial deck chairs on the Titanic. 

The simple fact remains that periodicals have remained profitable (as a sector) over the years. They have accommodated all other fixed costs as they increase, and yet continue to pay less and less for the content that is the heart of any publication. It’s not a conspiracy that this is happening, but it’s not an accident either. It’s due to the fundamental imbalance of power.

All of this explains why we have started the Canadian Freelance Union. The CFU  is an attempt to bring balance to the negotiating table. We wouldn’t need a union if, as you suggest, every freelancer could become a good negotiator. All we really need is for every freelancer to say “no” to the crappy rates, and ever-increasing rights demands. If we all did that, then the problem would be solved. The market would adjust over night.

But life is never that simple. Freelancers have bills to pay, kids to feed and homes to maintain. They are faced, indirectly or sometimes outright, with the threat that if they don’t accept the crappy rate, “then someone else will.” Freelancers operate largely in isolation from each other — it’s the classic Prisoner’s Dilemma situation. Acting for the collective benefit brings potentially greater rewards, but also brings greater risks.

This is why unions are created; to allow people to act collectively and bring balance back to the negotiating table.

With regard to the specific examples of paying additional percentages for extra rights, yes this is a good thing, but the percentages are tiny if they exist at all, and it is a fraction of an already too-small base rate. So while the principle is good, the end result is still terrible for the freelancer.

As for Reader’s Digest, they used to be one of the best markets for freelancers. Those days are long gone now. The most recent RD contract I’ve seen is one of the worst in the business in that they demand all- rights, including Moral Rights. The rates are better than most, but far from what they should be.

To be more clear, RD does pay better than most, but not as well as some, and not nearly as well as it should be. Its rates have dropped in recent years (in both current $$$ as well as due to inflation), and it demands many more rights than most. This includes Moral Rights, which places the RD contract in “the worst of the worst” category. It is not a positive model.

I wouldn’t expect any business to double its total expenses overnight, only the amounts paid for freelancers. Given the ridiculously low amounts currently being spent, most publications could easily double or triple what they pay, and hardly notice any difference. Obviously this varies from publication to publication.