Bad Contract Alert: GoodNovel

February 18, 2022 /


This is another in my series of posts about author-unfriendly contracts from reading/writing apps and platforms. (Previous installments: EMP Entertainment and A&D Entertainment, Fizzo (formerly Fictum), and NovelCat.)
This time, GoodNovel (aka Singapore New Reading Technology PTE. Ltd.) is in my sights. Like the many similar platforms of this type, it hosts a wide range of genre content, and is aggressively recruiting writers to create long (sometimes extremely long) serialized online novels. 
Writers can use the platform to create without signing a GoodNovel contract, or they can apply for a contract by posting at least 5,000 words and clicking a button, after which GoodNovel will evaluate whether they want to offer a contract, and if so, what kind. 
A non-exclusive contract offer comes with writer benefits of a  $50 “reward” (though only if the writer completes their novel and it has at least 80,000 words) plus a “profit share” aka royalties (more on that below). 
For an exclusive contract, writers receive a $100 signing bonus once they’ve uploaded 30,000 words, and a completion bonus of between $150 and $400, depending on total final word count. If they manage to pump out at least 50,000 words per month (an even more grueling word count target than NovelCat’s and Fictum’s 30,000), they’re also eligible for a $150 “monthly attendance bonus”.
Other than some of the payment terms, the exclusive and non-exclusive contracts are essentially identical. They are also quite problematic.
– The grant term extends for the duration of Singapore copyright (the same as US, UK, and European copyright: the author’s lifetime plus 70 years) (see the Basic License Terms clause). That’s an absurdly excessive grant term, especially for the exclusive contract. Of course, it’s pretty unlikely that GoodNovel will still exist 70 years after their youngest writer is dead–but what this grant of rights ensures is that GoodNovel can hold onto writers’ rights for as long as it remains in business.
There is provision in the Termination clause for the writer to cancel the contract after 36 months. But the terms are onerous: the writer must buy their freedom by paying back all the money they’ve received to date, plus either triple royalties (if total income is less than $200) or royalties times 20 (if total income is more than $200). (“Licensor” in the excerpt below refers to the author.)

 – The use of the term “copyright” throughout the contracts is troubling and unclear. In both the Licensed Rights Terms and Power of Attorney sections of the contracts, the writer is said to be granting exclusive or non-exclusive “copyright” or “digital copyright”. My sense is that this is not intended to be an actual transfer of copyright ownership (plus, obviously, you can’t transfer copyright non-exclusively), but it isn’t clear. This lack of clarity, which I’ve seen in other contracts from similar companies, is a concern.
 – The grant of rights is really sweeping (see the Licensed Rights Terms clause). Not only does it include pretty much all subsidiary rights in the work, including film, TV and games, but any “prequel, sequel, special edition, continuation, series, or the like” that the writer may produce. 
In other words, writers aren’t just signing up for one work, but for any other works related to it. 

– The rights grab extends not just to related works, but, potentially, to all future work.
Taken literally, which contracts generally are, this requires the writer to submit anything they ever write to GoodNovel, forever. 
 – Royalties (aka the “profit share” mentioned above) are 50% of “net revenue”, which is defined as gross receipts minus a menu of expenses (operating costs, ads and promotion fees, and taxes–see the Financial Terms clause and the Schedule of Definitions section). In other words, royalties are paid on net profit, and since there’s no breakdown of what those expenses may add up to, the writer can’t actually know what they might be paid. (Net profit royalties are a problem not just because they add up to less, but because the deductions can be manipulated to ensure that the amount on which royalties are calculated is as small as possible.) Additionally, there’s a payout only if the amount due in any month is $100 or more.
– Royalties are paid only on “premium content” (content offered to users on a pay-to-read basis), designated at GoodNovel’s discretion (see the Financial Terms clause). Between the discretion, the payout threshold, and the enormous numbers of novels competing for readers’ attention, I’d guess that for many writers, the rewards and bonuses are the only money they will see.
– Like other contracts from reading/writing platforms that I’ve seen, there are severe financial penalties for breach or default by the writer (see the Breach and Indemnify clause): 

And here’s the sort of thing that GoodNovel might consider to be default (see the Licensor’s Representations and Warranties clause):

Pretty sweeping, you’ll agree.
– The contracts require the writer to grant power of attorney to GoodNovel. This is serious overkill; power of attorney is not needed to enable GoodNovel to exploit the granted rights. 
– As in many contracts from reading/writing platforms, there’s what amounts to a morals clause (ii under Licensor’s Representations and Warranties). The writer must “uphold the reputation of Licensee and shall not engage in activities that would harm Licensee and/or its interests.” That’s pretty vague, and could cover a lot of ground at GoodNovel’s discretion (see “disseminating information that is unfavorable for Licensee”, above).
If you’ve read this far, you may be wondering if it’s really so terrible that bad contract terms are being offered for mostly horribly-written online novels by amateur writers with titles like CEO Husband’s Crazy Love For His Little Wife, I’m a Model That’s Undercover As the School’s Nerd, and Entangled With the Billionaire.

Partly it’s the principle of the thing. A company can make money without being maximally greedy. For instance, does claiming rights for the whole duration of copyright really offer that much more benefit to GoodNovel than contracting them for a limited period of years? Do word count requirements really need to be so grueling in order to ensure content growth? Is it really necessary make a claim on all of writers’ future work–or, given the huge amount of content on the site, to make it so punitive for writers to terminate their contracts? 
But it’s also the predatory nature of GoodNovels’–and other reading/writing platforms’–recruitment tactics. They’re signing enormous numbers of very young people with no experience or knowledge of publishing, many of whom don’t have English as a first language, to complicated contracts whose terms are laborious to parse even for someone like me with a fair bit of contract expertise. And they’re doing it with shiny promises of rewards, income, and exposure that in many–if not most–cases won’t be realized–whether because the writer’s content won’t receive the “premium” designation necessary for royalty payments, or the writer can’t manage enough word count to receive the attendance bonus, or simply because of the huge number of other novels competing for readers’ attention–not to mention the huge number of other platforms competing for market share. Or, maybe, just because the platform decides the writer isn’t “cooperative” enough. 
Of course, none of those downsides are mentioned on GoodNovel’s website or by its recruiters.
Writer Beware!