Book Advances, Royalty Checks, And Making A Living As A Writer
By Adriann Ranta
Few writers know what kind of payment to expect once a novel has gone under contract at a publishing house. Money is a frustratingly taboo subject and the sources for authors trying to get educated on book advances and royalties are scant. Though for many writers the whole issue of money is secondary to the satisfaction of having a book actually published (bestselling author Matt Richtel joked that he would have sold his novel for a six-pack of beer), compensation is nonetheless a topic worthy of exploration.
The percentage of writers make a living off of their writing is pitifully small, and that’s one reason so many fiction writers keep their day jobs. Brent Ghelfi, author of VOLK’S GAME, has been in law and business for years. Michael Loyd Gray, author of CONFEDERATE NATION and DECEMBER’S CHILDREN, has been a college professor for thirteen years. Matt Richtel, author of HOOKED, is a veteran reporter for The New York Times as well as a comic strip writer. These jobs double as novel fodder as well as an additional way to pay the rent.
The situation of these authors matches the experiences of Jessica Faust, one of the founding literary agents of Bookends, Inc. When asked what percentage of her literary clients make enough to live off of, she estimated fewer than 10%.
“If you want to make your living off your writing, you need to do more than write books, at least initially,” says Faust. “There are a lot of great ways with magazines and newspapers. Authors I have that really want to make a living often write more than just books. Then over time as their careers grow, hopefully they can survive just on what they make on their books. Don’t expect to pay off your house with your first book deal.”
While Richtel, Gray, and Ghelfi all have hopes of one day making a comfortable living as a writer, this simply isn’t possible yet. All three authors had varying advance amounts, some in the six-figure category, but even the most encouraging of advances doesn’t guarantee dependable income over the long run, which is what making a living is all about.
In some cases, a big advance can actually hurt a writer’s potential long-term earnings because if the first book doesn’t earn out its advance, the odds of contracts for future books diminish considerably. Three of our clients at The Editorial Department have found themselves in this position-a six-figure advance from a major publisher that didn’t earn out and thus made their next book difficult or impossible to sell. This is far too common in publishing when it comes to first novels, no matter how talented the writer. The challenge of being a small fish in a big pond-particularly with the majority of advertising and promotion dollars going to established bestsellers-is very real. Earning out an advance is part of the reason new writers must work so hard on their own, regardless of what their publisher is or is not doing for them on the promotion front.
“Over the long term, it does interest me,” says Richtel on the subject of making a living as a writer, “but I’m very skeptical. I’m not even to the point of cautious optimism because I have a wife, we want to have a family-I think it’s possible to eke out a living as a fiction writer when your expenses aren’t those of a mid-career person. For me, making a living means paying my bills and not living in terror.”
The Advance Itself
Exact numbers of book advances are frustratingly hard to come by. Perhaps reluctance to talk dollars and cents when it comes to book advances is a by-product of either embarrassment or a sort of survivor’s guilt while other writers continue to struggle or starve. Regardless, an advance is perceived as an indicator of value rather than an educated guess about a cut of future earnings.
Faust describes the advance this way:
“With most publishers an advance usually reflects your book’s earning potential the first year it’s on sale, less costs to the publisher. What does that mean? Traditionally when publishers run those elusive numbers they try to estimate how many copies a book will sell its first year in print, then they try to figure out how much it’s going to cost them to make that book-design the cover, pay for paper, printing, binding, and shipping costs-and then they will figure out how much you might make on the book based on your royalty percentage. And that’s your advance. It’s your share of the book’s profit its first year in print. Of course the publisher (and you) hopes you far exceed that number and that first royalty statement blows the advance out of the water.”
Manuscripts are printed in hardcover, trade paper, or mass market editions, determined by comparison books, review potential, high concept, and quality writing.
Rick Horgan, Executive Editor of Crown, an imprint of Random House, was kind enough to break down those “elusive numbers,” which end up sounding like a complicated high school math problem. Horgan estimated a distribution of 25,000 copies on an average commercial fiction launch for an author’s debut novel in hardcover. The publishing house might announce 50,000 copies, but this is a “gross exaggeration because publishers always over-announce,” Horgan says. Of those 25,000 copies, 65% will sell through with the remaining 35% in returns. To put it simply, if the publisher ended up selling roughly 15,000 copies, with the author making 15% in royalties on a $25 hardcover ($3.75 per book), that equates to about $50,000 in author earnings on a hardcover printing.
Many novels also have a paperback life. The formula Crown uses is half-half the distribution, half the author’s royalty rate, at half the book’s selling price. If the hardcover had a sell-through of 15,000 copies, the paperback run would be 7,500 to 10,000 paperbacks, either trade paper or mass market. The typical sell-through rate of trade paper is 70%. The typical royalty rate is 7.5% of $13.95 ($1 per book), making about $7,000 in profit for the author on the paperback run.
“If it had some legs it would sell a little bit more in the next few years,” Horgan says, “but it tells you that for a hardcover fiction novel, publishers probably will be thinking $75,000 and the agent will probably try and pull them up to six figures.” This is a specific example for a hardcover novel, however.
“If you sent me a book that was a trade paper submission,” says Horgan, “say it’s a TV companion guide to that Keifer Sutherland show, ’24,’ an episode guide. You’d view it through a whole new lens. No one’s going to pay $25 for this book, every other TV companion guide in the universe, they’re trade paperbacks, you’d price it at $13 at 7.5% royalty rate. You’ll try to get out 15,000 copies, you’d look at what previous TV companion guides ultimately netted. You probably won’t project a net more than 20,000 copies. Therefore the advance I’m probably going to pay is $15-20,000.”
Academic and poetry presses distribute much smaller quantities-2-3,000 copies-at a rate more akin to pro-bono work. The economic model is simply different and can’t be compared to big New York publishing houses like Random House.
Advances are rarely paid out all at once. Usually, half of the agreed upon amount is paid on signing the contract with the other half due once the revised manuscript is delivered and accepted by the editor. According to Faust, however, this payment schedule is on the move.
“It seems that more and more publishers are dividing payments into thirds, or more,” says Faust. “Partial payment on signing, partial on delivery and acceptance, sometimes partial on the delivery and acceptance of proposals for any other books, and the dreaded partial payment upon publication. I hate that. Authors hate it. Agents hate it and publishers love it. It’s becoming standard now at most houses, so complain all you want, you’re not getting out of it, no matter how small your advance is.”
While negotiation on the advance amount occurs between agent and the editor, there is something the author can contribute to a larger payout: marketing.
Marketing and Royalties
Unless your last name is King, Steele, or Evanovich, a book advance is probably not something a writer can live on, unless he/she is going for the lean, hungry look. While writers have very little control over the amount of their advances, they have more responsibility for the size of their royalty checks than anyone else in the food chain. When and if a book has met and exceeded the amount paid on the advance, the author starts making a percentage of subsequent sales. As mentioned above, the average royalty rate for a hardcover is 15% of the book’s list price, and for a paperback, 7.5%. The more copies you’re able to sell, the more money you make.
The success of a first book determines the future of a second book: if a debut tanks, publishers are less likely to take a chance on a large advance amount or to even bring out the second book at all. Demonstrating initiative and eventual profit on a novel is most important for debut authors.
“I’ve taken seriously the marketing piece of this and I’ve done so in part because I’m interested in seeing if I could build an audience for myself that could create a market for a second book,” says Richtel. “I’ve done so in an equal part if not larger part because I really care about this book and the ideas in it, and I really enjoy talking about them and doing radio and TV.”
When purchased by a traditional publishing house, an in-house publicist is generally assigned to your book. This person should be well-connected and knowledgeable about the most viable market for everything from Cajun cookbooks to Jane Austen reprints.
“I didn’t leave it entirely in the publisher’s hands,” says Richtel. “The publisher did a pretty good job-by first book standards an amazing job. They contacted hundreds of media outlets, but I also wound up working with a publicist I know locally who was able to contact more tech-centric journalists, people who might know of me or some of the subject matter in the book that the publicist at the national level probably wouldn’t . And that paid huge dividends.”
On a smaller scale, authors can continue to follow Richtel’s advice without his New York Times contacts. “I also followed the lead of a number of authors who have given me counsel, who’ve said ‘Go into bookstores, introduce yourself, for the love of God, don’t be a prima donna about it,'” Richtel says. “I’ve been fairly unabashed in sending out a handful of e-mails to friends and other people asking them to spread the word. I’ve put up a website, I’ve had a bunch of cards printed out with the name of the book on them and tried to give them out in a not-too-offensive way.”
The initiative of a writer is also important to literary agents.
“I’m not signing a book, I’m signing a writer,” says Kelly Mortimer, literary agent at Mortimer Literary Agency. “I look at the writer’s potential… What kind of personality do they have? Are they a go-getter, or do they lack the skills they need to promote themselves?”
Faust thinks marketability is the most valuable quality in a first novel. Whether the marketability derives from the writing or the author is inconsequential as long as there’s something to pitch.
“For a first novel, if you can come up with a really interesting hook, that’s what’s going to get you in the door almost more than anything else,” Faust says. “Once you have a track record and your name itself is the marketable product, I don’t think you have to worry so much about the hook.”
With such a competitive industry as publishing, it’s natural to seek out alternative modes of publication. Print on Demand and self-publishing companies have gained popularity as a way to publish a manuscript with little or no editorial intervention and regardless of a third-party publisher’s notion of sales viability. When an author chooses to self-publish, the need to be his/her own publicist becomes especially important. Instead of helping a publicity team, you are the publicity team. The financial burden of promoting a book is on your shoulders and dependant on the contacts you have. Gray self-published his first novel and published his second through Publish America, a blend of traditional and Print on Demand publishing.
“You do have to do a lot on your own with Publish America,” Gray says. “Publish America does make the book available in a variety of databases and does some promotion-they send out press releases to some select markets and things like that. I certainly didn’t have to pay for it, but I still have to get it into Borders and Barnes and Noble.”
In other words, using a less traditional mode of publishing puts more of the burden on the author. Gray would have to contact every individual Border’s location to ask them to sell his book as well as Barnes and Noble’s regional distributor, a contact that probably isn’t in his rolodex. The benefit of an in-house publicist at a traditional publishing house is that they are professionals at marketing a book. They know what works, they know who to talk to, and they know what makes people buy, buy, buy.
What You Can Do
Despite the rumors, traditional publishing isn’t going anywhere. There are back doors and loopholes, but the surest way to make money by book publishing is through a literary agent and publishing house. While self-publishing and Print on Demand might be a viable technique to get a new voice to the public, it’s generally best thought of as a stepping stone to making a living as a writer. The exception here is when an author has a significant professional platform of some sort that can be exploited to sell books. While authors who self-publish probably have the hardest time when it comes to selling their books, authors of traditionally published books are well advised to be highly proactive rather than leaving the marketing to their assigned publicist, no matter how good they may be. To make the most money off of a book deal, authors, editors, and literary agents have lots of recommendations.
“Look into promotion,” Mortimer says. “Local newspapers and radio stations love to feature hometown authors. Make contacts. Every author dreams about having a big book signing. Unless you’re famous or have some angle, these often end up as if you threw a party and no one showed. Instead, try public speaking with a signing afterward. A serious writer has to have a website, and give their readers a reason to go back to it. Have contests, writing tips, interviews, etc. Make more contacts. Oh, and one last thing. Make contacts!”
In the same vein, Richtel owes a lot of his success to his business contacts through The New York Times. “Fiction, as much as everything else, is who you know,” says Richtel. “I discovered that the agents that made an offer to take me on were largely those who I had a personal connection to through a friend or through a work colleague. It was a startlingly high correlation between who wanted to take me on and who I had a connection to, and that flows in part from the Times. You know a lot of writers as a journalist.” Making the job easier for the often overworked editors and agents is another technique to increasing a payout.
“It’s really important to have an idea that can be easily summed up,” Horgan says. “It just makes everybody’s task of pitching something easier. That’s very helpful. Know your genre, too. There are so many people working in genres who have read only sporadically in their genres and they make the mistake of using devices that have been used way too much already. The job of a writer is to assess and build on what has been done, so they have to know what has been done already.”
Building a platform is another way to make yourself attractive as a client and marketable author. In the context of publishing, a platform is the marketable aspects of a writer, encompassing past accomplishments, media exposure, and public notoriety. A platform is the best indicator of your ability to sell your book on your own-this is why celebrities are such a hot commodity. While Faust believes that a writer’s platform isn’t as important in the grand scheme of things, Mortimer disagrees.
“A strong platform is vital to a debut author,” Mortimer says. “I’m in a situation right now that really chaps my hide. I have a couple of exceptional manuscripts editors loved that have gone to committee numerous times and get shot down because, ‘The writer doesn’t have a strong enough platform.’ My advice to aspiring authors: GET A STRONG PLATFORM. NOW!”
Richtel felt being able to write “New York Times journalist” next to his name affected his advance amount, Ghelfi has several more book proposals lined up, and Gray has been working for years on collecting short story prizes.
“I’ve discovered that when you’re soliciting agents or soliciting editors, if you can send them a letter or e-mail saying I won this, or I won that, they pay more attention to you,” Gray says. “It all adds up to a record so they can see I’m not a rookie, I’ve been out there and done some things… I was very fortunate to win some nice short story awards and that opened some doors. They don’t look at you as some wannabe but as someone who’s done it.”
The most important aspect of wringing the most money out of a book deal is something that all the interviewed writers and agents agreed on: The absolute necessity to love what you’re writing.
“Make sure it’s exciting and interesting to you, because if it’s not then it won’t be interesting to someone else trying to read it,” Ghelfi says. “I think that anybody who gets into writing with the expectation to be rich and famous is making a big mistake… I tell people, if you love it then you’re doing it for the right reason.”
When an author cares about his project, it shows. The writing is more passionate, the author is more willing to devote the long hours to editing drafts, and marketing the book becomes a labor of love instead of a chore. Putting your utmost effort into every step of the publishing process is what will affect your book sales, and thus your bank account.
Founded in 1980 by Self-Editing for Fiction Writers coauthor Renni Browne to help writers turn promising manuscripts into salable properties, The Editorial Department is the oldest independent editorial firm in operation today. What sets us apart from others in our field are our 27 years in business, our high rate of success with conventionally published first fiction, our literary agent matchmaking program, and our commitment to candor and high standards in evaluating our clients’ work.
Our editorial staff comprises a team of dedicated editors, many of whom are published writers themselves with distinct areas of specialization. While we can’t guarantee you publication as a result of working with The Editorial Department, we can dramatically improve your odds.
Check out our website at: http://www.editorialdepartment.com
Between the Lines, our e-zine: http://www.editorialdepartment.com/content/view/50/356/