Contracts, samples & royalties - and an update on our financial situation

Hi lovelies! Hanna Lisa here, for yet another little glimpse behind the scenes at Making Stories. I’m writing this on a Friday afternoon after spending the better part of the day engaged in discussions on Instagram around pattern pricing and the value of design work, and I wanted to take a particular aspect of that discussion and share it with you here, on our blog, for everyone to be readable.

Earlier this year, in January, we had an email discussion with a few Making Stories designers we’d hurt in the process of working with them. Our communication and our contract language wasn’t clear enough which led to different understandings with regards to pattern rights and sample handling. I’m really sorry we’ve hurt you and added to the (already substantial) stress of trying to make a living with designing knitwear patterns.

During and after that conversation, we’ve put a few changes in place that we haven’t shared with the broader public yet. That was an omission on our side - one that makes me cringe as one of our core values is, after all, transparency - so I’d like to go into the changes we’ve put into effect in this post:

  1. Clearer contract language

One of the feedback points we got was that our contract language was not as clear as it could have been, particularly to when it came to whether we were contracting a design for a print or a digital version, for collection or for individual sales, and when the design exclusivity period would start (on publication date or contract signing date). When we released the digital versions of the books we were genuinely surprised at the feedback we got. We've never once thought that when we spoke of “the publication” in our earlier designer contract that it might be viewed as the print copy specifically as the digital copy has always been available with our print publications. How we perceive our own contract, however, is clearly not what's important. Again, we are so sorry for the confusion and hurt it caused.

We’ve reworked the respective part of the contract to make it super clear that patterns that are, for example, commissioned for the magazine, will be available in both the digital as well as the print version of the magazine, but not sold individually by Making Stories.

We’ve also decided to make our designer contract template available to the public. If you’d like to see our complete designer contract, you can do so here.

2. Sample handling

According to our old contracts, the samples for the designs would have stayed with us here at Making Stories indefinitely, with the option of coming to a joint agreement should the designer want their sample back. When we decide the compensation for a particular design, what happens with the sample is a core part of determining the final fee we’re paying: If a sample stays with us, we increase the fee significantly - it’s comparable to us contracting a sample knitter to create the sample for us.

At the end of last year, we realized that this led to us having boxes and boxes full of samples that we wanted to give a loving new home. We decided to offer the respective designers the option of buying their sample back. Every sample that wouldn’t go back to a designer we would have put into a charity auction.

It quickly became clear that we had made a huge mistake in offering this. The contract language around what was going to happen with the samples wasn’t clear enough, so that some designers were expecting to get their sample back and were very irritated at being asked to purchase it.

We struggled how to reply to that for quite some time. One of our core principles has always been to treat everyone equally and fairly, and it just didn’t feel fair to us to offer to send the samples back free of charge when we had contracted other designers at lower fees because we didn’t keep their samples. At the end of the day, though, we recognized that we had caused a lot of hurt due to that unclear contract language, and decided to send those samples back free of charge, with giving the designers the option to pitch in with shipping costs if they wanted.

We’ve since updated the contract language for our new contracts so that it’s clear that the samples go back to the designer (at Making Stories’ cost) once the rights revert back.

3. Royalties

When we first started out with WOODS, we intentionally contracted the designs for a longer exclusivity period and without the option to sell individual patterns. We changed this from SOCKS 2018 onwards, yet omitted to be as clear as we could have been in our contracts. To us, the contracts clearly specified an all-encompassing rights situation which meant rights to individual, digital collection and print collection sales, but we quickly came to know that we hadn’t been as concise and clear in the contracts as we should have been so that some designer were angry and confused when we started selling individual patterns and books as digital collections.

Therefore, we established a royalty program earlier this year:

All designers whose individual pattern PDF has been or is currently available through the Making Stories Ravelry store are eligible for the following royalty structure (which applies to individual pattern sales, not print or digital versions of the respective publications):

  • 30% of Ravelry store proceeds (net, i.e. after Ravelry & payment fees)

  • 20% of Ravelry In-Store sales (net, i.e. after Ravelry & payment fees)

At the point in time when individual pattern rights revert back to the designer, Making Stories will provide the designer with an overview of all the sales of their individual pattern(s) that have happened through the Making Stories Ravelry store during the time the rights were with Making Stories. The designer then provides Making Stories with an invoice over the above-mentioned royalty payments. Payment terms are 30 days within receipt of invoice; payout can be through bank account / Transferwise or Paypal.

A note on the digital versions: We won’t be paying out royalty fees for any patterns that are sold in digital versions of our books. These digital versions have been available to everyone who’s purchased a print copy from day 1 onwards, and we feel that it was clear both in our old contracts and from the first book on that we did that the pattern rights we contracted for would always apply to the entire publication, be it digital, print or both.

4. Ravelry note

Sadly, this last point is something that completely slipped off my to do list earlier this year. We had promised to add a note to all individually available patterns in our Ravelry store that clarifies the rights situation - i.e. that the rights currently lie with us. I’m so sorry that I forgot to do this - we’ll add a note now to all JEWELS patterns (which are the only ones available now, with the exception of our own patterns).

Lastly…

There’s something that’s really important with me to share as I sometimes have the feeling that there’s the assumption that we’re super happy with the way we’re compensating designers and contributors right now: We are not. We wish we could pay you more. The reality is that we cannot afford it right now, but that doesn’t mean we’re happy or even content with it.

I sometimes have the impression that people assume we’re making lots of money with Making Stories, at the expense of everyone we work with, and that is, quite frankly, very, very far away from the truth. We’re currently in a financial situation where neither Verena nor me are paying ourselves for our work at Making Stories. It’s very privileged in an of itself that we can work on this without paying ourselves, and we acknowledge that. It’s also a situation that cannot go on forever. We scraped by bankruptcy last year, and while our financial situation is looking a lot more stable and promising right now, I and we don’t feel that we’re in a position yet to increase designer, contributor or team compensation (let alone pay ourselves) without putting the entire business at risk again.

We’re working very hard towards a financial future in which we can both increase our designer, contributor and team compensation as well as pay ourselves a salary. We will always strive to do our best in balancing those needs out, and I hope this clarifies some of the assumptions I’ve felt have been going around about our financial situation and us personally benefiting from it. 

I’m so very sorry about the hurt and anxiety we have caused. We strive to be better, and to improve wherever we can. If there’s anything that you would want to discuss with us, give feedback on or where you’ve been treated unfairly, please do send me an email (I’m available at hannalisa@making-stories.com).