The Writing Game: Part One, Rich Authors
Friday, February 12th, 2010 10:56 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
rolanniPursuant to yesterday's post pointing to this article and to those folks who have been weighing in on various discussions of the Amazon and Macmillan kerfuffle with the opinion that all writers are rich (and are trying to keep ebook prices high to protect their 500-acre estates).
We're going to have to do math, here. Sorry; I'll try to keep it simple and straightforward.
When an author goes to contract for a book, they receive what is known as an advance against royalties. The shorthand for this is "advance," and some people therefore forget that it's a loan against future earnings. Authors by contract receive a certain percentage of cover price on each sale as a "royalty." Before any royalties are paid to the author, the book must first pay back the money given in advance of its publication (aka "earn out").
So, using Carousel Tides -- because that novel is mine, all mine, and I didn't tell Steve I was going to do this, much less get his agreement -- as an example, this is what the math looks like:
Advance against royalties: $12,000
Pretty good, huh? Actually, it is. Most new writers can expect a much lower advance -- around $7500 for a first fantasy. Expect, wait! You don't think you're going to get that whole big lump of cash all at once, do you? No, no. We're going to break it into pieces. Happily, Baen only breaks their advance payments in half (I've heard of advances being broken down into as many as four pieces. Take into account that publishers as a race pay late, and this becomes...challenging... to any writer trying to live within budget).
Back to particulars: Sometime relatively soon after signing the contract, a check arrives:
on-signing: $6,000
less agent commission 15%: ($ 900)
less taxes 33%: ($1,683)
grocery, rent, and cat food: $3,417
Carousel Tides was submitted, and accepted, as a complete manuscript. However, there were editorial changes required. When the changes were complete, I sent in the corrected manuscript, a necessary step in triggering the second advance payment, called "delivery-and-acceptance" or, in shorthand, D&A money.
Some while after the revised manuscript is turned in, the editor accepts it (note: delivery alone does not trigger the second payment; delivery and acceptance are the trigger, and acceptance, depending on your editor's workload...could take a while.)
So, eventually, your script is accepted, your editor orders the check, and we do the same math:
D&A $6,000
less agent commission 15%: ($ 900)
less taxes 33%: ($1,683)
grocery, rent, and cat food: $3,417
Now, because Carousel Tides was an on-spec book, I didn't have to write it between signing and D&A; I only had to revise it -- with the happy outcome that I got paid both halves of my advance in the same year.
Which is to say that I saw an influx of $6,834 in the ol' house general account.
Not exactly going to Vegas on that.
But wait, you say -- you're not fooling me -- you got royalty payments during that year, too!
Oh, did I?
Now, in point of fact, I did in mid-2009-- as one-half of Lee-and-Miller -- receive royalties on books sold through June '08. Ebook royalties, exclusively. Duainfey, our first dead tree book with Baen, was published in September '08; the second half of the 2009 royalty statements were delayed, and only reached us after the first of 2010. For the curious, Duainfey has not yet earned out
So, here we have my half of the Lee-and-Miller royalties:
sales through June 2008: $4800
less agent commission 15%: ($ 720)
less taxes 33%: ($1346) [rounding down the forty cents]
grocery, rent, cat food: $2733 [ditto sixty cents]
If all I had done in 2009 was sold and delivered my novel, and collected royalties on past sales, I would have achieved for my own use a grand total of $9,567.
Geez, even the day-job pays better than that.
Also, regarding Carousel Tides -- it was, as I said, an on-spec book. That means I wrote it believing that, Once It Was Written, They Would Come (aka, "because I wanted to"). And that means that it was on submission to various publishers for 18 months before it was placed with Baen.
That math being: It took a year to write the book, 1.5 years before a sale. Two-and-a-half years before it began earning.
OK. That's probably confusing enough for one post. In a while, I'll try to break down the various author-tasks associated with getting a novel published.
We're going to have to do math, here. Sorry; I'll try to keep it simple and straightforward.
When an author goes to contract for a book, they receive what is known as an advance against royalties. The shorthand for this is "advance," and some people therefore forget that it's a loan against future earnings. Authors by contract receive a certain percentage of cover price on each sale as a "royalty." Before any royalties are paid to the author, the book must first pay back the money given in advance of its publication (aka "earn out").
So, using Carousel Tides -- because that novel is mine, all mine, and I didn't tell Steve I was going to do this, much less get his agreement -- as an example, this is what the math looks like:
Advance against royalties: $12,000
Pretty good, huh? Actually, it is. Most new writers can expect a much lower advance -- around $7500 for a first fantasy. Expect, wait! You don't think you're going to get that whole big lump of cash all at once, do you? No, no. We're going to break it into pieces. Happily, Baen only breaks their advance payments in half (I've heard of advances being broken down into as many as four pieces. Take into account that publishers as a race pay late, and this becomes...challenging... to any writer trying to live within budget).
Back to particulars: Sometime relatively soon after signing the contract, a check arrives:
on-signing: $6,000
less agent commission 15%: ($ 900)
less taxes 33%: ($1,683)
grocery, rent, and cat food: $3,417
Carousel Tides was submitted, and accepted, as a complete manuscript. However, there were editorial changes required. When the changes were complete, I sent in the corrected manuscript, a necessary step in triggering the second advance payment, called "delivery-and-acceptance" or, in shorthand, D&A money.
Some while after the revised manuscript is turned in, the editor accepts it (note: delivery alone does not trigger the second payment; delivery and acceptance are the trigger, and acceptance, depending on your editor's workload...could take a while.)
So, eventually, your script is accepted, your editor orders the check, and we do the same math:
D&A $6,000
less agent commission 15%: ($ 900)
less taxes 33%: ($1,683)
grocery, rent, and cat food: $3,417
Now, because Carousel Tides was an on-spec book, I didn't have to write it between signing and D&A; I only had to revise it -- with the happy outcome that I got paid both halves of my advance in the same year.
Which is to say that I saw an influx of $6,834 in the ol' house general account.
Not exactly going to Vegas on that.
But wait, you say -- you're not fooling me -- you got royalty payments during that year, too!
Oh, did I?
Now, in point of fact, I did in mid-2009-- as one-half of Lee-and-Miller -- receive royalties on books sold through June '08. Ebook royalties, exclusively. Duainfey, our first dead tree book with Baen, was published in September '08; the second half of the 2009 royalty statements were delayed, and only reached us after the first of 2010. For the curious, Duainfey has not yet earned out
So, here we have my half of the Lee-and-Miller royalties:
sales through June 2008: $4800
less agent commission 15%: ($ 720)
less taxes 33%: ($1346) [rounding down the forty cents]
grocery, rent, cat food: $2733 [ditto sixty cents]
If all I had done in 2009 was sold and delivered my novel, and collected royalties on past sales, I would have achieved for my own use a grand total of $9,567.
Geez, even the day-job pays better than that.
Also, regarding Carousel Tides -- it was, as I said, an on-spec book. That means I wrote it believing that, Once It Was Written, They Would Come (aka, "because I wanted to"). And that means that it was on submission to various publishers for 18 months before it was placed with Baen.
That math being: It took a year to write the book, 1.5 years before a sale. Two-and-a-half years before it began earning.
OK. That's probably confusing enough for one post. In a while, I'll try to break down the various author-tasks associated with getting a novel published.
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2010-02-12 04:28 pm (UTC)no subject
Date: 2010-02-12 06:03 pm (UTC)no subject
Date: 2010-02-12 06:04 pm (UTC)no subject
Date: 2010-02-12 06:08 pm (UTC)So, doing rough math.... you may be getting a lot of eyeballs on this.
no subject
Date: 2010-02-13 01:55 pm (UTC)In fact, it looks like we've had a few people by.
Geez, even the day-job pays better than that.
Date: 2010-02-12 04:31 pm (UTC)Re: Geez, even the day-job pays better than that.
Date: 2010-02-12 11:19 pm (UTC)no subject
Date: 2010-02-12 04:32 pm (UTC)no subject
Date: 2010-02-12 04:36 pm (UTC)I've been told for decades that one reason book prices are going up is because the price of paper and printing is going up, so obviously the paper/printing plays some role in the price. My brother and father work in publishing, so I know the mechanics of storing books, managing inventory, shipping from printer to distributor, distributor to bookseller, etc. are not free either. All of those publisher costs are eliminated in ebooks, yet the publisher takes the same percentage of the final cost of the book, while doing substantially less work. I think authors are being robbed by the publishers on ebooks, not by the readers.
no subject
Date: 2010-02-12 04:45 pm (UTC)Because, in some cases, it's a deal-breaker, presented as: This is what the house pays in royalties. Take it or no contract.
Publishers and authors do not actually want the same thing.
Publishers want to sell books.
Authors want to sell THEIR books.
...a subtle but important difference.
no subject
Date: 2010-02-12 04:47 pm (UTC)Yeah.
authors are being robbed by the publishers
Date: 2010-02-12 04:49 pm (UTC)e-publishing will change that eventually but not until the majority of sales are electronic... at which point the traditional publishing house will lose thier leverage and either get on-board or get locked out of the e-marketplace.
no subject
Date: 2010-02-12 05:07 pm (UTC)no subject
Date: 2010-02-12 05:21 pm (UTC)So on a $10 paperback (which is basically what we're up to these days), about $3.33 covers paper, copyediting, manuscript acquisition, typesetting... That is not very much money, and it has to go cover a lot of tasks. And since the distributor is actually paying *wholesale* for the book, it's going to be out of a lot less than $10.
Not a great scene. Electronic books do a lot to cut distributor costs, but they don't do a great deal for publisher costs. And they (generally) still go through a distributor, which means there's two businesses between you as a customer and the publisher... and those other businesses still need their cut.
no subject
Date: 2010-02-12 09:31 pm (UTC)no subject
Date: 2010-02-12 11:23 pm (UTC)The distributor is going to use a different estimation technique to figure out if it's worth distributing a given book.
The nice thing about the retail version is it lets us customers get a quick and dirty view of what a publisher's raw income might be. It won't be dead on accurate, because books tend to be specialty retail, and the contracts between publisher, distributor and retail outlet will be heavily negotiated. But for eyeballing the practicalities of a sample midlist book... you don't need the details. Just a reasonable estimate of "so how much would the publisher gross?"
Mostly, the answer is... not very much.
no subject
Date: 2010-02-13 11:49 pm (UTC)This is especially true because books are priced flexibly, in tiers (limited edition, regular hard cover, trade paperback, mass-market paperback, etc.),
Ironically while that typically brings up dreams of "what the market will bear" which makes consumers think they might be paying more than the cost to produce the item, Sharon's example reminds us that, if you're not a best-selling author, "what the market will bear" may well mean that the authors are paid less than their cost-to-produce...
no subject
Date: 2010-02-14 12:59 pm (UTC)So yes, you *can't* just pretend that the paper is free. Nor is the binding, nor the shipping costs. And from a bookstore's point of view, those notebooks are a lot less trouble to deal with. They can mostly sell on the basis of fashion, and no one will complain if a particular style vanishes.
Bookstores are in business to make a profit. In the case of an indy bookstore, if the owner doesn't make a profit, they don't get to eat. For a big chain, the scale is a bit different, but if they don't make their sales numbers, ultimately everyone is out of a job. The distributor and publisher also have to be out to make a profit. Same reasons.
The author is one of the easiest people to squeeze in the whole chain. They tend to not watch the bottom line like a hawk, and in some cases it's easy to convince them to take less pay for the sake of vanity or publicity. (see also: Author's Guild settlement)
I love novels as an art form, but the plain fact is from a commercial point of view, they're a commodity. Losing sight of that fact makes it a lot harder to figure out how best to make the author money. And since I *want* authors to make money... I have to look at the business side just as sensibly as I'd look at any other way of making a living by art. That means looking at the retail basics, and doing things like counting fixtures, find the discount areas, and in general see what's selling.
no subject
Date: 2010-02-12 04:42 pm (UTC)I looked the other day (tax time) at the total income in my Quicken category for "royalties and advances" -- this for about ten years in the published ranks and four novels. Works out to under $4000 per year . . .
no subject
Date: 2010-02-12 05:43 pm (UTC)I very much appreciate this breakdown, if only for the sake of enlightening others. Kudos on a very clear explanation. :-)
no subject
Date: 2010-02-12 05:46 pm (UTC)no subject
Date: 2010-02-12 05:50 pm (UTC)Maike
no subject
Date: 2010-02-12 06:07 pm (UTC)no subject
Date: 2010-02-12 11:11 pm (UTC)Other kinds of freelance writing used to be reasonably profitable (you could survive, maybe have a family), but not now. (http://ow.ly/14zpm)
no subject
Date: 2010-02-13 01:45 pm (UTC)After Meisha Merlin melted down, I made some calls, thinking to reconnect with my old editors. The local daily was now offering a by-line; the local weekly, interestingly enough, still paid for articles -- at a flat rate, rather than by-inch, and no longer paid for photographs, because -- as the editor explained to me -- "it doesn't cost you anything to take a picture with a digital camera."
Thank you
Date: 2010-02-13 01:54 am (UTC)Re: eBooks - I think we are still a long ways away from a stable pricing protocol. We don't have a stable eReader device yet - Kindle's close but it's too expensive for many. Once the devices and formats have settled out (anyone remember Betamax?), there'll still be pricing volatility as the publishers figure out What The Market Will Bear. This is going to be a bumpy ride for the next decade. ish. The current eReader-user is angry but they are a small minority compared to those buying the dead-tree editions - the publishers should remember that eventually the eReader-users will be in the majority and should avoid annoying them. I saw Macmillan as attempting to do that --- they never said the eBooks
would STAY at 14.99. They said the eBooks should start there and go down in price as the paperback editions get released.
But this is my own opinion as a bookseller (who gets the maximum price of her books DICTATED to her by the publishers),
Lauretta@ConstellationBooks
PS One of my successful thriller authors once quoted 0.25 royalty on each Mass Market paperback book (7.99) he sells. And that was with a big publishing house. That's not even a postage stamp anymore!
Re: Thank you
Date: 2010-02-13 02:05 pm (UTC)Royalties vary, depending on format. Our mass market rate is 8% of cover (retail) for the first (ahem) 150,000 books, then 10% unto eternity. So, for each sale of a $7.99 mmp, we get...sixty-three cents?
Re: Thank you
Date: 2010-02-13 07:53 pm (UTC)Hmn, maybe that's because you are a Known Author, with Attendant Fans. (Dave's still building his base.)
Yay, fans, yay better royalties...
Lauretta@ConstellationBooks, where we can't shovel the sidewalks
because State Highway's front loaders dumped the ice/salt/snow
from the street onto them. Grrrr.
Re: Thank you
Date: 2010-02-15 05:02 pm (UTC)Personally, while I prefer saving the shelf space, and I love having a hundred books in my purse instead of one or two, I like reading paperbacks better than I like reading my Kindle. So if I'm going to pay paperback prices, I want some value added beyond not having to find a place for the paperback. Getting a book without going anywhere can count, but only if I'm feeling sick or *can't* get to the bookstore; I like bookstores. Getting a specific book I've been longing for months early most certainly does count -- I've bought the ARCs for both Fledgling and Saltation, am hoping eagerly for one for Mouse and Dragon, and don't begrudge the $15 extra (extra because I'm going to want the final copy, too.) That's not even getting into DRM, which is the main reason I buy very few ebooks actually from Amazon.
Anyway, if you have a taste for classics, you can get a huge library for ereader or computer for the effort of downloading the files (& installing an ereader client for the appropriate format if you're using your computer), or for under $20 on CD from ebay.
BTB, from Baen, what do you get when someone buys the $15 ARC, when they buy the $5/$6 ebook, and what do you get when someone buys a $15 month which includes one of your books (or two of your books, in the case of 6/2010.)
An Excellent Reality Check
Date: 2010-02-13 03:14 am (UTC)Don't forget the editors
Date: 2010-02-13 03:45 am (UTC)Perhaps however the biggest thing publishers did, before they outsourced to agents, is act as gatekeepers. In the past, you might not like a particular writer (I am not all that fond of Stephen King, some disagree with my position) but you could usually rely on certain publishers to print writers who could tell a tale. All this infrastructure costs money, and whether you are printing with ink or electrons, you are going to have the overhead.
How do I give you more money?
Date: 2010-02-13 08:46 am (UTC)Re: How do I give you more money?
Date: 2010-02-13 04:11 pm (UTC)Authors (for now, at least) get a percentage of the cover price on each sale (as I said to another poster, above, in the case of mass market paperbacks, we get 8% of the $7.99 stamped on the cover). That's the same piece of the action for the writer, whether you buy from Uncle Hugo or from B&N.
no subject
Date: 2010-02-13 10:15 pm (UTC)Cathy
no subject
Date: 2010-02-13 10:23 pm (UTC)Say that the anthology earns a whole buck in royalties every time one is sold. In the case of Low Port, there was a 21-way split (20 contributors and the editor). So, for each buck taken in, each author/editor got four-point-something cents.
no subject
Date: 2010-02-14 10:39 pm (UTC)no subject
Date: 2010-02-15 06:21 pm (UTC)(sarcasm off)
Seriously, thanks for writing this. I keep telling people that authors don't make as much as you would think.
I remember back when I was in High School I worked in the library that an author used occasionally. When I found out who she was I mentioned how much I was looking forward to reading her next book but that I had to wait for the paperback. Her response was something like "that's okay I don't need the $0.25 I'd get if you bought the hardback." That has always stuck with me as an idea of what how much money authors are NOT making