Webnovel help

Hello friends,
I have been on Wattpad for many years and have 2 published works with decent success. I had someone contact me from the Webnovel platform. They have asked me to publish my works on webnovel and they also have an option to lock chapters and get paid in coins (I am not eligible for Wattpad Beta.)
So, they have asked me to sign a contract and since I have never signed such an official contract, I need help. I should also tell you that they had a great sales pitch telling me that they will help market my novels, even publish and develop movie (if it’s popular, no guarantees), so I was looking forward to sign with them.
So, these are the clauses that are scaring me: (Party A = webnovel, Party B= Author)
I hereby grant a full, Exclusive License for the exclusive use of global copyright and
intellectual property rights to the Work to operating company [Cloudary Holdings Limited]
(hereinafter referred to as: “[webnovel]”) of [www.webnovel.com] website. The licensing
period shall be from the date of this power of attorney until the expiration of the protection
period for the copyrights and intellectual property rights to the Work. Without the written
authorization of [Cloudary Holdings Limited], no one (including myself) shall exercise the
foregoing rights to the Work
Also, it says:
LICENSED CONTENT AND PERIOD OF LICENSING
3.1 In consideration of the undertakings of Party A contained in this Agreement and subject to the payment by Party A of the remuneration to Party B pursuant to Clause 6, Party B hereby grants to Party A and its Affiliates, and Party A and its Affiliates accept, a worldwide, exclusive (to the exclusion of any and all third parties including Party B), perpetual, irrevocable, freely transferrable and sublicensable license of the entire copyright subsisting in the Work, including, without limitation:
(i) the New Works Rights;
(ii) the Audio Adaptation Rights;
(iii) the English Paperback Publication Rights;
(iv) the Distribution Rights; together with
any and all intellectual property rights in and to the Works for any purpose, including, without limitation, for promotion, marketing, sales and any other forms of commercial or economic exploitation.
And it says:
Party B hereby waives all his/her moral rights of Work (including rights to object to derogatory treatment) under the applicable laws, except for the right to be identified as the author of the Works.

They also say that they may need revisions to the work, change my cover and do all the marketing for my books.
I will get 50% of all NET revenues from my book from all sources of where the book is published.
The lady who spoke to me assured me I could keep my work on other platforms, unless I want my chapters locked to earn money.
Any idea on if these are standard clauses? I’m really confused and will appreciate any insight.
Thanks for reading so far!
Best,
Sayali.

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Don’t sign anything until you speak with a lawyer.

That is so important that it is worth saying twice.

Don’t sign anything until you speak with a lawyer.

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Dealbreaker. Period. Amen. No discussion. Run like hell.

You NEVER sign something like this – even if it’s the Big 5 asking.

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Through WP PM or like gmail?

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First on my FB page, then Wattpad PM and then the conversation moved to Gmail.

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I’m not too informed of all this stuff, but I’ve researched it a little and 50% of NET revenues isn’t a lot.

No, these are not standard clauses. And if they are, they bloody well shouldn’t be.

You have to read a contract in its entirety to understand what it means, because both parties are agreeing to be bound by everything that it says. It’s possible for the publisher to give you something in section 2 that they then (mostly) take away in section 12.

So it’s possible that some part of the contract that you haven’t quoted here makes the part that XimeraGrey highlighted a less-than-completely-appalling option for you… but I doubt it.

The part that XimeraGrey didn’t highlight is just as bad. They’re basically taking complete control of the book and shutting you out of it, in return for half of… something. Is “net revenues” defined anywhere else in the contract? Because if not, it means money they receive, minus any expenses - and they get to say what counts as an expense.

I’m particularly alarmed by the fact that you’re granting them “new works rights”. That’s not a term I’ve seen in publishing contracts (has this been translated from another language?), but I assume it means what are normally called “derivative rights” - the right to publish sequels, prequels and spinoff stories. If it’s interpreted broadly, it can include film, TV, merchandising, video games, you name it… So this clause appears to forbid you from publishing a sequel to your own book, but allows them to commission someone else to write one, for which they agree to give you half of… something. Again, another clause elsewhere in the contract might make this a less-than-terrible proposition, but I doubt it.

A good intellectual property lawyer could probably get some of the worst clauses removed or watered down, but do you really want to negotiate with someone whose opening gambit is, “We own you”?

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I have no idea about the other stuff (although it sounds like you’re giving away a lot of rights), but 50% of NET is scary. “Net” is after their expenses. You have no control over their expenses so the net may be zero even if it’s selling. Royalties are usually a percentage of sale price.

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Just adding my voice to the chorus of “do not sign this”!

Just as a bit of context, webnovel is the English language iteration of a Chinese company that publishes online fiction in China. It’s extremely popular in China, and the top, top authors make six or seven figures a year. They’ve been trying to export their model for a while now - some on this board might remember one of their employees (he didn’t say he was their employee, but it was pretty obvious he was) coming into this club and talking up what a great model it was and how much money Chinese authors are making. He’s also been on kboards (or someone who posts basically the same content with the same style of non-native speaker English) doing the same thing.

You can see the thread here: https://www.kboards.com/index.php?topic=262753.0

Personally, I don’t think the Chinese model will translate (ha!) outside of China. I live in Shanghai, and so much of the online ecosystem (and the economy in general) is only really successful because they wall themselves off from the rest of the world. There’s a reason that Chinese internet companies have gotten so big and rich, and it’s not because they’re terrific - they simply do not have to compete with Facebook and Google because they don’t allow many Western internet companies into China. Same with the banks and the insurance companies and the financial services industry etc etc. Anyway, back to Webnovel - I can’t see this model working (not high quality fiction that I can see- go ahead, read the stories here):

webnovel

But they’re trying to monetize them. If a reader wants a subscription-based model, there’s KU (higher quality, mostly) and if they want free lower quality fiction there’s the sites like Wattpad and Royal Road. I don’t see where Webnovel fits into this ecosystem.

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Hello, Thanks for your reply. What exactly is KU?

Thanks for your reply. The contract also mentions:
Single Chapter Subscriptions Income = (revenue from sales of single-chapter subscriptions on Party A’s Web Channels — distribution channel costs, operating costs and other costs)
Party B’s Share of Single Chapter Subscriptions Income = Single Chapter Subscriptions Income * [50] per cent.
And also:
RIGHT OF PRIORITY
10.1 Party A and Party B agree and acknowledge that all other works created by Party B in addition to the Work within one (1) year after completion of the Work under this Agreement shall be regarded as “Party B’s New Works”, for which Party A has rights of priority to exploit.

Hmm, I guess I was right to freak out.

If you’re exclusive with Amazon KDP, you can enroll in KU (Kindle Unlimited). In KU, you get paid for pages read.

oh thanks, I never knew that :slight_smile:

That means pretty much you are giving up your rights FOREVER (or at least as long as it has copyright protection). That technically includes that they keep the rights even if they go out of business, go bankrupt, or refuse to keep your work published on their website – and you would have to bring legal action against them under those circumstances in order to get your rights back. If they are a registered company in China, it also means you need to sue them in that jurisdiction if you want to challenge any of the contract. Chances of success – every slim.

Another red flag is Power of Attorney. That’s a broad term that could be applied liberally to give them a lot of rights that are somewhere hidden in fine print.

Perpetual means that the license will never end (law of perpetuity normally applicable to contacts is negated)

Irrevocable means you can never change your mind

Freely transferable means that they, on the other hand, can sell it to whoever they want without your consent

Anything you write within a year of some vague completion date (and it’s not clear if they are talking about the original work or the new work) will be automatically licensed to them.

Needless to say, this contract is more than questionable, personally, I don’t even know if it would hold up in a US or UK court since some of the terms might violate policy. Personally, I would never sign under these conditions, even if they offered me 99% of the royalties and gave me a $100K advance.

***Please note that none of this post is meant as legal advice or should be substituted for the advice of an attorney.

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The only way I’d sign something like this would be if they offered me enough money upfront that I’d never have to work again. Even then I’d probably think twice - I like being able to meet my gaze when I look in the mirror in the morning.

It’s fairly standard that if a publisher goes bankrupt, any rights it holds to any of the books that it’s published are considered assets, which can be sold off to the highest bidder to pay the publisher’s creditors.

Some authors manage to get a clause in their contracts to the effect that if the publisher declares bankruptcy or is sold to another company, the rights automatically revert to the author, or the author can ask for them to be reverted and has priority over anyone else who might want them. But these clauses are usually unenforceable, or difficult to enforce. When a company goes bankrupt, the authorities try to ensure that creditors get as much of their money back as possible. There are rules about who counts as a creditor, and rules about the order in which they get paid, depending on their relationship with the company. The authorities usually take a dim view of anyone moving assets out of the company (i.e. reverting rights to authors) around the time of bankruptcy, because it looks as though that person is trying to cheat the creditors out of what they’re entitled to.

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I have an automatic reversion clause in my audio rights contract in case of bankruptcy or business liquidation and from everything I remember from my contract law class, such a clause would hold up. It’s based on the premise that the rights are not fully paid for since there is a continuous income stream instead of a one time payment which gives priority over other creditors.

Ultimately, it would be up to the courts, but without the provision, you are most certainly screwed. I would never sign a contract without some type of reversion rights since my copyright is important to me. I worked to hard to just sign it away, no matter how much money is involved. But then I’m also a lawyer who generally is more cautious of what I sign because law school has this thing of instilling paranoia in you. I don’t even walk through a store anymore without noticing all those spots that could give rise to a personal injury claim, lol. Hot coffee that could spill on me is a big dollar sign. It’s maybe overboard, but I have always lived by the “better safe than sorry” principal.

Interesting… I’ll have to bear that in mind if anybody ever wants to license rights from me :slight_smile:

Wow, those terms are insane. Just say no!

ok, thanks guys. I didn’t sign it and will refuse to do so now.
Best,
Sayali.

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