I spoke last week at my local middle school for their career day. Part of my talk was given over to explaining what the heck a Literary Agent even does. And the issue of subsidiary rights came up. Now I know some of you are experts on this stuff already... but just in case you are unfamiliar, I thought I'd use the analogy I used on the kids. It's simple, and it makes sense (I hope!) and it is important.
You might think of your book as being a bunch of words in a document or on paper.
I think of your book as a rubber band ball.
The ball itself is your intellectual property. It is a real thing - it belongs to you. And it is made up of a bundle of rights.*
Each rubber band that makes up the ball is its own right. Right to publish the book in the USA? That's a rubber band. Right to publish in paperback? That's a rubber band. Right to make a calendar or an audiobook or a TV show or put excerpts in Vanity Fair or anything else? All rubber bands... that is, rights. Take SHREK for example. Publishing it as a picture book in the US was a rubber band. Publishing in each country in the world, all their own rubber bands. The movie was another, the movie tie-in books another, the musical yet another, and toys and lunchboxes another.
These rubber bands/rights can be sold separately, or in a
bundle. Most US publishers for kids books at least consider publication of
hardback, paperback, ebook, in English, in the USA, to be primary rights. It is pretty much a given that the publisher will ask for these (along with large print, book club editions, and other editions of the same book.)
All other rights are "subsidiary" rights, also known as "subrights." We can often negotiate to keep audio,
film/tv, merchandise/commercial, and (hopefully) world English and foreign rights. EVERY book
theoretically has all these rubber bands, though of course, some books
are more likely to USE them than others ... Guns, Germs and Steel is
probably not going to make it to the lunchbox aisle at Target anytime
And as for foreign rights, while it is TOTALLY COOL to sell them, not every book, quite frankly, is suitable for foreign tastes. Some books are deemed "too American" -- books about school, or specific types of pop culture, can be losers for other countries -- and of course every country has their own trends and preferences. The economy plays a part too; many territories are very choosy about what they bring on and only want topics or authors they know will be sure-fire hits, so they stick to big names.
Point is: It is the publishers job to get as many of the rights as they can, for the least amount of money they can.** It is your AGENT'S job to keep as many rubber bands as possible, and get the best deal possible for the ones they do sell. If the agent keeps the rights, they then can sell the rights themselves and the client keeps all the profit (less agency commission of course). If the publisher keeps the rights, then THEY sell them, and split profits with the author (it goes straight to earning out your advance, though, until you've earned out at which point you get that percentage.)
The Bologna Book Fair is coming up next week, and that is where many hardworking foreign rights specialists will be pitching their books like mad, hoping their author's books will make it onto bookshelves in other countries and languages! It is an extremely interesting and rewarding fair, and I hope to have updates and fun news from it on twitter.
Hope this was a bit useful! Let me know if you have questions, I may or may not have answers.
* ETA: The obvious conclusion, which I should have stated in the first place: The ball itself is worth something. And each rubber band is worth something, too. Be sure you know what you're throwing when you throw it.
** That doesn't mean that publishers are trying to trick authors or rip them off -- it simply means that it is obviously in their best interest to get as many rights as possible. And most of this stuff I'm talking about is negotiable... so if the publisher is open to negotiating (let's say, a higher advance price, or better royalties), you and your agent might well decide to cede some of these rights. That's a convo for you to have together.