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Subsidiary rights refer to licensing agreement provisions for copyrighted material published in derivative formats, where licensed publishers are granted legal authorization to publish or produce copyrighted media.
Subsidiary rights are also known as subrights.
In digital rights management (DRM), subsidiary rights pertain to electronic books (e-books), which are book derivatives. Publishers normally handle electronic publishing. When a book is published, a publisher and author sign a subsidiary rights agreement, which is a book contract offshoot. Subsidiary rights language includes specifications for foreign, electronic, audio or software media. Subsidiary rights also describe a publisher's use of copyrighted material, including third party negotiation or redistribution.
Authors profit from e-book sales, but publishers realize residual benefits for perpetuity. For example, a publisher may agree to an author royalty of five percent per unit per digital work. In rare cases, subsidiary rights provide 50-50 publisher/author royalty splits.
However, increased author demand is changing the subsidiary rights landscape. A number of authors agree that electronic subsidiary rights language should include a 90/10 author/publisher split because of the relatively low costs of e-book publishing (approximately five cents per unit) versus print publishing (two dollars per unit). A proposed DRM protection method for authors would involve registering book titles as domain names.