On Forming a Comic Book Union - Part II

Editor’s Note: This part two of my posts exploring forming a union in the comic book industry. Part I can found here.

        As I mentioned in my previous post, the biggest hurdle comic book creators need to overcome in order to form a union is that most creators are not employees, and the law prohibits independent contractors from forming unions.

        Even if they could overcome the employee vs. independent contractor problem, there are many other hurdles to overcome. First, the political climate for forming unions seems to be at a low. Union membership has been declining for decades.[1] Additionally, many states are passing laws to further weaken unions, and a recent U.S. Supreme Court decision declaring mandatory union dues to be unconstitutional dealt another crippling blow (See Janus v. AFSCME, https://www.supremecourt.gov/opinions/17pdf/16-1466_2b3j.pdf). Furthermore, employers generally do not like their workforce to be organized into a union, and, historically, will attempt to prevent it. All of these factors contribute to the difficulties employees would face in an attempt to form a union.

       Secondly, previous attempts to form a comic book union have been unsuccessful. In the late 1970s, a group of well-known creators explored organizing a union. The Comics Creators Guild featured Neal Adams, Chris Claremont, Paul Levitz, Len Wein, Steve Ditko, Marv Wolfman, and many more. After having several meetings to establish a goal for the nascent Guild, even going so far as to draft contract language and suggest page rates, the effort ultimately didn’t lead anywhere.[2]

        Even though many comic book creators bemoan their working conditions and agree a union would be helpful, getting enough people together to agree on the union and its platform can be challenging. This is partially what happened with the Guild in the late 1970s, and that was when most of the comics in the U.S. were published in New York. In today’s comics industry, publishers and creators are spread throughout the United States and the world, and getting enough agreement to start a union would be difficult, if not impossible.

        Additionally, two important questions would need to be addressed: What types of work would be covered, and which companies would be the “employer” in this situation? To address the first question, it seems obvious most people who support a union would want to see the work performed for DC and Marvel be unionized, and most creators would also want other work-made-for-hire jobs for publishers covered. So, it would be safe to assume that working on licensed properties for publishers, where the publishers retain all intellectual property rights, should be covered.

        I doubt most people would expect creator-owned projects to be covered by union rules, even though it might be nice to use union rates as a starting point for evaluating fair page rates. However, by not applying union rules to creator-owned projects and applying them primarily to work-made-for-hire gigs, some of the works put out by IDW, Dark Horse, Boom! Studios and similar publishers could be covered by union rules while other works might not. This obstacle can be overcome with clarification, but it does lead into the second question of which publishers should be considered “employers.”

        Again, as above, most creators would want Marvel and DC to be considered an employer for union purposes. Since almost all of the books they publish are work-made-for-hire, and the creators do not have any ownership interest in the books they create for Marvel or DC, this is an easy dividing line.

        Furthermore, if we’re using work-made-for-hire books as the dividing line, then it is easier to categorize which other publishers should be considered employers, and when they should be considered employers. If the publisher produces work-made-for-hire books, and the creators do not retain any ownership rights, then that publisher should be considered the employer. If a publisher only distributes creator-owned work and does not have an ownership or otherwise controlling interest in the work, then they should not be considered an employer.

        While a comic book union sounds great, and would likely help improve the wages and working conditions for comic book professionals, it faces major hurdles in getting started.  

Part III of this series will address my final thoughts on the issue.

 

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[1] https://www.bloomberg.com/quicktake/u-s-labor-unions

[2] See The Comics Journal, No. 42 for a comrephensive look at these discussions.

The Punisher Logo and Police

           I’ve seen an interesting discussion lately online regarding the Punisher logo, and its use by police departments. As the Black Lives Matter protests continue in the wake of George Floyd’s death and shine a light on aggressive police tactics and use of lethal force, there has been a call for Marvel to prevent police officers from wearing the Punisher logo. In particular, Comic Book Resources ran an article highlighting some of the difficulties Marvel would face in trying to use trademark law to prevent police officer usage of the logo[1], and AIPT ran an article highlighting websites that sell unlicensed Punisher police-themed goods.[2] Both of these articles raise interesting points, and when read together, show the difficulties in enforcing intellectual property rights.

            For those unaware, the Punisher is a Marvel character introduced in The Amazing Spider-Man 129 and was created by Gerry Conway, John Romita Sr. and Ross Andru. He was originally introduced as a Spider-Man antagonist, but quickly gained in popularity. After witnessing his family murdered by the mob, he becomes a vigilante who frequently kills criminals. At best, the character can be called a vigilante anti-hero; at worst, the character can be called a serial killer.

            Despite this, the character and his signature skull logo remain popular, and there are many instances of police and military wearing the logo. The reason people are calling on Marvel to do something is because police officers’ duty is to serve and protect. Wearing the Punisher logo conveys a troubling message.

            As was mentioned in the Comic Book Resources article, trademark law primarily protects against consumer confusion in commercial usage. If the individual police officers are not selling merchandise bearing the Punisher logo, then Marvel has limited recourse. Marvel would not be successful arguing traditional trademark infringement, and they would have to rely on alternative theories, such as dilution. This theory argues that someone else’s usage of the trademark would harm the value and goodwill of the original trademark owner. However, for personal use, it is harder to argue than if it was adopted by an entire police department. Additionally, the First Amendment provides strong protection against trademark claims where freedom of speech is concerned. While the use is questionable, police officers wearing the logo could be considered an expression of free speech.  

            Copyright law could also be used to protect the logo, as it is an artistic work. However, once again, copyright law usually focuses on commercial activity, but non-commercial use could be found to be an infringement if it does not qualify for fair use and harms the marketplace for the copyrighted work.

            Marvel would face a difficult task in trying to enforce its trademark or copyright rights against individual police officers. However, as noted in the AIPT article, Marvel could remove many unlicensed products from the marketplace that bear the Punisher logo. Manufacturing and selling product that bears the Punisher logo is clearly commercial use.

The question would then focus on whether the products being sold, such as a Punisher logo incorporating a blue line emblematic of police or Blue Lives Matter, would constitute a fair use under copyright law or a form of speech protected by the First Amendment. These are difficult questions to answer, but I believe they would not be. The First Amendment protects many types of speech, but commercially exploiting someone’s copyright or trademark by adding minimal design elements would be unlikely to qualify without a strong speech component.

For example, there was a recent case involving the use of Matt Furie’s Pepe the Frog by Infowars in political posters supporting Donald Trump and using the MAGA slogan. In an initial ruling denying summary judgment, the court stated that Inforwars’ use of the character could not be considered a fair use as a matter of law and would need to be decided by a jury. See Furie v. Infowars, LLC, 401 F.Supp.3d 952 (C.D. Cal. 2019). The case was later settled with Infowars paying Furie $15,000.[3]

             Finally, Punisher co-creator Gerry Conway has launched a campaign to “reclaim” the Punisher logo from police and military appropriation.[4] Conway has teamed up with artists of color to create and sell t-shirts bearing the Punisher logo, or similar designs, to raise money for Black Lives Matter. The campaign can be found here: https://www.customink.com/fundraising/black-lives-matter-skulls-for-justice-presented-by-gerry-conway. So far, Marvel has not taken a position on Conway’s campaign, but it could be considered an infringement of Marvel’s intellectual property rights. While I will not go into a detailed analysis of each shirt, the outcome would depend on the creativity involved in the designs and the message they convey. At first glance, I believe many of the designs could qualify for First Amendment protection, but it would be decided on a case-by-case basis. Conway’s campaign will end on June 30.

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[1] https://www.cbr.com/punisher-logo-marvel-cops-military-limited-legal-response/

[2] https://aiptcomics.com/2020/06/10/punisher-police-symbol-marvel-legal/

[3] https://www.npr.org/2019/06/11/731520403/alex-jones-to-pay-15-000-in-pepe-the-frog-copyright-infringement-case

[4] https://www.forbes.com/sites/lisettevoytko/2020/06/11/the-creator-of-the-punisher-wants-to-reclaim-the-iconic-skull-from-police-and-fringe-admirers/#589a94ab4348

Tattoos and Copyrights - Part II

            I previously wrote about the NBA 2K copyright lawsuit that involved reproducing the tattoos of famous athletes in video games a few years ago. Recently, the district court issued its opinion in the case, and it was in favor of the video game company.

            In 2016, Solid Oak Sketches, LLC sued the makers of the NBA 2K video game series. Solid Oak had acquired the exclusive license to a number of tattoo designs that were tattooed on famous basketball players, notably among them Lebron James, and it alleged the NBA 2K games infringed its copyright rights because the video game series recreated the tattoos on the athletes in the game.

            The court ruled that the use in the NBA 2K games was de minimis, there was an implied license, and it was a fair use.

In ruling that the use was de minimis, which means that the copying was trivial and did not create a substantial similarity between the works, the judge noted that the tattoos at issue were only on three players out of 400 available in the game, were hardly, if at all, visible or distinct during game play, and average game play was unlikely to include the players at issue.

The court also found that an implied license existed for the players to “use the Tattoos as part of their likenesses…”.[1] In determining the implied license, the court emphasized that

(i) the Players each requested the creation of the Tattoos, (ii) the tattooists created the Tattoos and delivered them to the Players by inking the designs onto their skin, and (iii) the tattooists intended the Players to copy and distribute the Tattoos as elements of their likenesses, each knowing that the Players were likely to appear “in public, on television, in commercials, or in other forms of media.”[2]    

Because the players had an implied license from the tattoo artists, that existed before the license granted to Solid Oak, and the players granted the NBA the right to exploit their likeness, 2K Games use of the players’ likenesses, including the tattoos, is not an infringement.

            Finally, the court found the use of the tattoos in the games to be fair use. In evaluating the fair use factors, the court found (i) the commercial use of the tattoos to be negligible, as they constituted a minor part of the game and were barely visible,[3] (ii) the tattoos at issue had limited expressive value,[4] (iii) even though the tattoos were copied in total, it was done to accurately depict the players, and the tattoos were barely visible in the game,[5] and (iv) there was no impact on the market value of the tattoos because video games are not a substitute for tattoos, and a market for licensing tattoos to be used in video games would be unlikely to develop.[6] 

            As I mentioned previously, this issue had been bubbling up for some time. While tattoos, generally speaking, are entitled to copyright protection, it had been an unanswered question of how far copyright protection would extend once the tattoo was on someone. This decision goes a long way in determining the scope of that protection. I think it is a solid decision, and, if appealed, I hope it is sustained.

            After reading it, however, I am concerned about the emphasis on how the tattoos are barely visible in the game. This leaves open possible arguments that if the tattoo is visible, or featured prominently, such as in a portrait of a tattooed subject, then it could be an infringement. Hopefully, the implied license theory outlined in this decision would continue to protect an artist in such a situation. 

            Until the decision is upheld on appeal, it is still risky to recreate tattoos without permission. As I mentioned previously, if you are a celebrity whose likeness is likely to be recreated, obtain a waiver or assignment of any copyright rights the tattoo artist may have. If you are someone creating a work incorporating a tattooed subject, either have them indemnify you from harm, if it is commissioned, or proceed with caution, as the law regarding accurate recreations of tattooed individuals is still unsettled.

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[1] Solid Oak Sketches, LLC v. 2K Games, Inc., No. 16-CV-724-LTS-SDA, 15 (S.D.N.Y. 2020).

[2] Id.

[3] Id. at 17-19.

[4] Id. at 20.

[5] Id. at 21.

[6] Id. at 22.

An Industry Undone?

The comic book industry faces challenging times right now due to Covid-19, and many people blame the industry’s reliance on Diamond, and their recent actions, for some of the problems. However, many other consumer-reliant entertainment industries are also struggling, including the movie industry. And while the impact didn’t occur as quickly as with the comic book industry, traditional book stores are also facing significant challenges.[1]

Will this be the end of comics, as so many seem to fear? No. Will the comic book industry drastically change the way comics are distributed? Maybe, but I wouldn’t bet on it. Many critics of Diamond want to see comic book stores survive and thrive, but they also call for a complete rethinking of the way comic book distribution works. I don’t see how these two thoughts can be reconciled.

To briefly recap, a pandemic has swept the nation, and the United States has seen unprecedented unemployment and business closures. Comic book stores were ordered to close in many states in order to comply with social distancing requirements, which meant they could not receive and sell new comic books.

Diamond Distributors, the primary distributor to comic book shops for the industry, announced they would cease shipments to stores. There are a number of factors as to why Diamond made this decision, but two significant ones were (i) many of their customers were closed, and (ii) some of Diamond’s distribution centers were also ordered to close or soon would be closed. Around this time, some publishers began to trim back and cancel some of the titles they had scheduled for release in the coming months, and after Diamond’s announcement halting shipments, additional publishers started halting or rearranging production.

Diamond then stated they would not pay their suppliers until the situation improves, a move they have since clarified. This statement caused many to believe the comic book industry as we know it would collapse. 

Many have blamed Diamond for the fragile state of the industry. As the primary distributor to comic book shops, it has a near monopoly on getting comics from publishers into shops. However, it is important to remember how Diamond came to be the primary distributor.

The direct market emerged after the newsstand market started collapsing in the late 1970s. It was a lifesaver for comic publishers. Notably, comics distributed through the direct market were non-returnable. This factor, combined with reliance on pre-orders, helped increase publisher profits and financial certainty. It shifted some of the risk of a comic book not selling to the retailer from the publisher. Initially, there were a number of distributors, but after the comic book speculation collapse in the ’90s, Diamond remained as the primary distributor.

It is important to acknowledge that comic book stores are still a vital distribution channel for publishers. Other than trade paperbacks in bookstores, success outside of comic book shops is still hard to achieve for most publishers. And, even though I fondly remember buying comics off of newsstands at the grocery store, that market isn’t coming back due to the issues surrounding returnability.

Publishers recognize the importance of comic book shops to the industry, and they actively listen and attempt to support retailers. The movie industry is perhaps the only other comparable industry that listens to and negotiates with its primary distributors—movie theaters. The system we currently have, and the slow adoption of alternate methods of distribution, is due to publishers listening to and trying to support comic book retailers.

My guess is that Diamond will remain the primary distributor to comic shops after this crisis has passed. However, I think a lot of publishers will explore alternative means of distribution, particularly methods over which they can exert direct control. Direct shipment to stores or customers will likely increase, and more publishers will try to expand to the book market. Even though comic book consumers have been slow to adopt digital comics, I expect the numbers to grow. The ease of use, continuous availability, and profit margins make digital comics a distribution method publishers would like to see increase.

Notice, however, that all of these alternative models come at the expense of comic book shops. Any major changes to the current distribution system will cause stores to close.

Overall, I don’t foresee major changes to the industry. The direct market, and the money it generates, works too well for most publishers to abandon it. If true, radical change were to happen it would be at the expense of comic book shops, and most publishers don’t want to see that happen. 

              

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[1] https://www.publishersweekly.com/pw/by-topic/industry-news/trade-shows-events/article/82672-covid-19-ongoing-list-of-cancellations.html

On Forming a Comic Book Union - Part I

Editor’s Note: This is the first in a three-part series. Also, I am not a practicing union / labor attorney, but I am familiar with the law in these areas.

If there’s no Guild now, if we don’t stand together now, I don’t think there’ll ever be one. In a very real sense, it’s now or never.

– Chris Claremont, 1978.[1]

Every so often, I see talk online about how comic book creators should form a union. It usually comes up after a story emerges about the low pay and, oftentimes, poor treatment of comic book creators in the industry—typically at the hands of a publisher. So, why not form a union? If only it was as easy as it sounds.

In its simplest definition, unions are groups of employees joining together to collectively bargain with employers to set wages, working conditions, benefits, and other job-related conditions. By bargaining together, the employees can offset some of the employer’s inherently strong bargaining power and obtain better results for all employees than each employee could achieve individually.

The law is the greatest obstacle that creators face in attempting to form a union. The National Labor Relations Act prohibits independent contractors from organizing a union. As such, only employees can form unions. With few exceptions, the artists, writers, letterers, and inkers making comics who would benefit most from a union are almost all categorized as independent contractors.

To determine whether someone is an independent contractor, the IRS looks to three categories relevant to the degree of control exerted by an employer and independence:

1.       Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

2.       Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

3.       Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?[2]

All of the factors must be weighed to determine whether a person is an employee or an independent contractor, and results can vary. In Community for Creative Non-Violence v. Reid, the U.S. Supreme Court in determining whether a sculpture was made by an independent contractor or during the scope of employment stated:

Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. […] No one of these factors is determinative.[3]

            As mentioned previously, for the most part writers, artists, inkers, and letterers have been categorized as independent contractors by publishers, and they sign agreements stating the works are work-made-for-hire in order to comply with copyright law. This work-made-for-hire agreement allows the publisher to retain ownership and control over the works. In order to overcome the presumption that artists and writers are independent contractors and unionize, the independent contractor status would need to be challenged, and after applying the factors listed above, the National Labor Relations Board or a court would have to find the creators to be in an employment relationship. (Note: Some states have taken actions to address these issues, notably California and its recent AB-5 law that changes the test for classifying independent workers and employees.)

If comic book professionals are not recognized as employees and treated as such by employers, then they cannot join together to bargain or strike. Doing so would be a violation of antitrust law. Only recognized labor unions have the ability to bargain for wages, working conditions, etc., and have the ability to strike. While other groups exist that advocate for better treatment for independent contractors, such as the Graphic Artists Guild, Freelancers Union, etc., these are not true unions, and they have limited direct impact on employee-employer relations.

In my next post, I will discuss some other obstacles union organizers would have to overcome.

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[1] Groth, Gary, “The Comics Guild,” The Comics Journal, No. 42 (October 1978).

[2] https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

[3] 490 U.S. 730, 751-52 (internal citations omitted).

When can a copyright holder sue for statutory damages?

I’ve been doing a lot of research on copyright issues lately, and I am seeing people, attorneys included, incorrectly explaining when statutory damages are available in copyright infringement cases. Namely, I see a lot of people claim you are only eligible for statutory damages if you register your copyright within 3 months of publication. This is incorrect, and it is very important to understand this section of the Copyright Act properly as it can greatly impact a copyright holder’s decisions in enforcing their rights. 

 In brief, when a copyright holder sues someone for infringement they can attempt to pursue actual damages and profit from the infringer, or they can pursue statutory damages—if they qualify to do so. The benefit of being able to pursue statutory damages is that the copyright holder doesn’t have to prove they were harmed, and the damages range from $750 to $30,000 per infringement, with the ability to pursue up to $150,000 for willful infringement. Essentially, this means that pursuing statutory damages in a copyright infringement case is easier and, in some cases, can be more lucrative.

How can a copyright holder be eligible for statutory damages? By having their copyright registered. The text of the statute authorizing statutory damages reads:

In any action under this title, other than an action brought for a violation of the rights of the author under section 106A(a), an action for infringement of the copyright of a work that has been preregistered under section 408(f) before the commencement of the infringement and that has an effective date of registration not later than the earlier of 3 months after the first publication of the work or 1 month after the copyright owner has learned of the infringement, or an action instituted under section 411(c), no award of statutory damages or of attorney’s fees, as provided by sections 504 and 505, shall be made for—

(1) any infringement of copyright in an unpublished work commenced before the effective date of its registration; or

(2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work.[1]

This statue is awkwardly worded and people misread it. Frankly, the first time I read this statute, it took me a good 30 to 45 minutes to understand it. Most people get hung up on the phrase that appears to state a copyright must be registered within 3 months of publication or you are not entitled to seek statutory damages. This only applies to infringements that occur before registration. The three months is a grace period between publication and registration. If a work is published and someone begins infringing it, then the copyright owner can pursue statutory damages if the work is registered within 3 months of publication. If we remove the phrases that are exceptions to the rule, then we can see that a copyright holder can seek statutory damages for any infringement that occurs after the copyright has been registered: 

In any action under this title, other than an action brought for a violation of the rights of the author under section 106A(a), an action for infringement of the copyright of a work that has been preregistered under section 408(f) before the commencement of the infringement and that has an effective date of registration not later than the earlier of 3 months after the first publication of the work or 1 month after the copyright owner has learned of the infringement, or an action instituted under section 411(c), no award of statutory damages or of attorney’s fees, as provided by sections 504 and 505, shall be made for—

(1) any infringement of copyright in an unpublished work commenced before the effective date of its registration; or

(2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work. [Italics added for emphasis.]

Paragraph 2 only prevents an owner from seeking statutory damages for infringement that occurred before the work was registered. If the owner registers the work, then the owner can pursue statutory damages for any new infringing uses that occur after registration. Note, however, that an infringing use that occurred before registration and continues after registration has been found to be one infringement.  Therefore, an owner would not be able to seek statutory damages.[2]

There is nothing preventing copyright owners from pursuing statutory damages against people who infringe their work after it has been registered. Additionally, they may pursue statutory damages against infringements that occur during the three month period between publication and registration, if the work is registered within three months of being published.

As one commentator has noted, “Congress made statutory damages available only for previously registered works to serve … as ‘a great encouragement for registration.’”[3] This is a reminder for all creators to register their work as soon as possible. If you haven’t registered your work and you’ve discovered it being infringed, unfortunately it’s too late to pursue statutory damages. 

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[1] 17 U.S.C. §412

[2] See Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696, 700-01 (9^th Cir. 2008)(“Every court to consider the issue has held that "infringement `commences' for the purposes of § 412 when the first act in a series of acts constituting continuing infringement occurs.; See also, Mason v. Montgomery Data, Inc., 967 F.2d 135, 144 (5th Cir. 1992)(“We thus conclude that a plaintiff may not recover an award of statutory damages and attorney's fees for infringements that commenced after registration if the same defendant commenced an infringement of the same work prior to registration.”), and Johnson v. Jones, 149 F.3d 494, 506 (6th Cir. 1998).

[3] Nimmer, David, Investigating the Hypothetical “Reasonable Royalty” for Copyright Infringement, 99 B.U.L.Rev. 1, 24. [Internal citations omitted.]

Understanding Royalty Rates in Comic Book Publishing

Editor's note: This post was cross-posted on CreatorResource.com. 

            The royalty is the percentage amount a publisher pays to you based on sales of your book. I’m often asked, “What is a good royalty rate?” and the answer is it depends. Royalties can vary wildly. I have seen royalties as high as 80% to as low as 10%. Sometimes, the lower royalty can actually be a better deal. The reason: it all depends on how the royalty is calculated.

            Typically, the royalty being paid will be subject to some sort of offset. Usually, this will be defined in the contract as Net Sales, Net Profits, or something similar. The offset is the expenses the publisher is allowed to recoup, and thereby deduct, out of your royalty rate from the amounts it has received. It often includes shipping, printing, and advertising costs. I have also seen it include personnel costs, insurance costs, storage costs, and so on. If an advance was received, any royalty payments will also be withheld until the advance has been paid back.

            I have also seen royalties that are based on the cover price of the book being sold, and also just based on amounts received in connection with the work. No offsets, other than advances, are taken by the publisher.

            It is incredibly important to know and understand what the royalty will be based on. Not all publishing agreements clearly spell out what can be offset against the royalty payment, namely, they won’t include a definition of Net Sales. They might list the royalty to be paid followed by a lengthy list of items they can recoup.

When I review publishing agreements, I try to limit the amounts being claimed as much as possible. In my opinion, if a publisher is offsetting the amount received, it should only apply to verifiable, third-party expenses incurred in connection with the work.

            So, how does the math work out? I’ll do my best to illustrate. I’m going to try and use round numbers for ease. These figures will likely differ from what you might see.

METHOD 1: Let’s say you negotiate a 50% royalty off of Net Sales with a publisher. They define Net Sales as the amount they receive from sales of the book, but they can deduct shipping, advertising, and printing costs before calculating the royalty. We’ll assume a small print run of 1,000 copies at $0.80 a copy. Total cost of printing (and for the sake of ease we’ll include shipping): $800. Usually, Diamond Comic Distributors (“Diamond), the primary company who distributes comic books to comic book stores, pays 60% off cover price. Assuming the cover price is $3.99, that is $1.60 going to the publisher for each copy sold to Diamond. Let’s assume the entire print run sells out through Diamond. The publisher has received $1,600 for the book. Now, it can deduct printing, shipping, and advertising. We already stated the printing and shipping will be $800. For our example, the publisher did not spend any money advertising your book. In total, the publisher has received $800, and you will receive $400 from this run.

METHOD 2: Now, let’s assume the publisher pays you 50% of whatever they receive without deductions. Assuming 1,000 copies sold, they would receive $1,600 from Diamond. Your split would be $800.

METHOD 3: Finally, let’s say you negotiate a 15% royalty off of the retail price of the books sold. Again, assuming all 1,000 copies sold at $3.99 a book, you would receive $0.60 per book sold. In this scenario, you would make $600. The publisher does not deduct anything from this royalty amount.

Method 1 is probably the most common royalty rate I’ve seen for creator-owned publications. However, the deductions can vary greatly. It is entirely possible for the deductions to exceed what the publisher earns, and therefore creators might not receive a royalty rate under this method. Method 2 I’ve seen from newer publishers who are utilizing newer models to do hybrid creator-and-publisher owned books or buying the creator’s rights. Method 3 is more in line with traditional publishing.

As you can see, how the royalty rate is calculated can make a big difference. Publisher definitions of royalty rates and Net Sales can vary wildly. It is important to pay attention to how these terms are defined, what deductions can be taken, and understand how you will be paid.  

2020-01-29 Correction: An earlier version of this post contained an error stating Diamond pays 60% off cover price. It has been corrected to state Diamond pays 60% off of cover price.