“Reversion of rights” simply refers to the point in time at which the publisher no longer owns the rights to your book. When the rights revert to you, the author, you’re free to sell them again or do whatever you want with your book. In the past this wasn’t as important because it was unlikely that another publisher would want to take on an already-published book. Your main option was to self-publish and you'd likely not be able to make enough money to cover your self-pub costs.
But all that’s changed in the digital age. Now, when the rights revert, you can simply and cheaply format your book for Kindle and all the other e-book formats, and keep it for sale forever, perhaps making a few extra bucks a year. So there’s a strong reason to want to get the rights back as soon as the publisher is no longer making you any money.
Of course, this is also why publishers want to hang on to rights as long as possible. Once a book stops being printed in the ink-and-paper format, the publisher can benefit from keeping it “in print” and continuing to sell e-book versions. As long as they have a chance to make money from your book, they may not want to give up the rights.
Today, we are very clear in our contracts about what defines out-of-print and triggers a reversion of rights. Typically, the publisher wants to keep the rights as long as they’re selling a certain base number of units. For example the contract may state that they retain the rights as long as they're selling, “100 copies in any print or electronic version within a single royalty period.”
As an agent, I don’t really think 100 units is enough to justify their keeping the rights. I usually try to get it changed to something like 400 units (but publishers are not excited to grant this). Usually there will be a provision that you cannot request a reversion of rights if your advance isn't earned out. The contract language may state, for example, that if the advance is earned out and the publisher’s sales fall below a threshold for two royalty periods in a row, the author can request a reversion of rights if the publisher doesn’t bring their sales up in the next royalty period. So again, it’s helpful to have an agent who can watch your sales in each royalty period, and make that reversion request at the right time and in the proper manner.
Full article: http://cba-ramblings.blogspot.com/2010/11/reversion-of-rights.html