Bad contract and bad payment practices: Reader’s Digest Publishing Australia and Time Inc. (via JP Morgan)

Bad Contract: We’ve got a number of readers in Australia, and perhaps this is old news to them, but it’s instructive to freelancers everywhere. Reader’s Digest Australia has just foisted a new contract on its contributors, and it’s a doozy. Take a look at this clause:

RDA shall have the exclusive right set out in section 2 herein [exclusive worldwide rights to publish and distribute], for a period of 24 months which shall commence from the date of publication of the photos and thereafter the rights set out in secton 2 shall be read as non -exclusive for an indefinite period.

Lightstalkers (email me or comment here if you need an invitation, by the way) and Kenneth Jarecke have a clause-by-clause analysis of the contract. The best thing to do with contracts like these is to just say “no.” There’s no way to make a living releasing work compensated at normal editorial day rates with such expansive rights being relinquished.

Bad payment practices: Time Warner’s payment vendor, JP Morgan, has unveiled a new payment plan for all suppliers. Essentially a codified 2/10 net 30 payment program, all suppliers are required to pay a fee to Time Warner if they want to be paid on time. Ranging from 4 percent fee for payment within 3 days to a .5 percent fee for payment in 25 days. John Harrington also notes that the fee is for an acceleration of approved payments, rather than an acceleration of payment. So, you’ve still got to wait the 30-90 days for the payment to be approved and then you’ve got to pay a fee if you don’t want to wait another 30 days on top of that. JP Morgan sees this model of payment, that is, exploiting small vendors’ need for cash as a way to make more money, as a “lucrative tool”. From JP Morgan’s explanation:

“There is another large pool of suppliers…the non-strategic suppliers. These suppliers are typically small to mid-size suppliers…they are also the hungriest for cash and much more likely to accept discounts versus strategically sourced suppliers. Understanding your supplier’s need for cash is a key to success.” –JP Morgan article

Gawker’s report, with interesting discussion, points out: “Given how desperate freelancers are to be PAID NOW, largely because companies like Time Inc. never pay them on time, this is a pretty genius idea.” John Harrington’s Photo Business News & Forum has good analysis, as well.

For commiseration: Check out Clients from Hell and ClientCopia, growing collection of client horror stories from designers and other creative professionals, this short about what would happen if the vendor-client relationship occurred in real world situations, and this brilliant exchange between a designer and a client who wants him to work for free (the client in that case is none-too-pleased with it being published and claims it is a hoax, by the way. Others see no reason to believe either side.).

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