Authors & Speakers Network Blog with Larry James

Saturday, June 29, 2013

Dr. Seuss Never Took an Advance

Filed under: Book Advances,Guest Author Articles — Larry James @ 8:30 am
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Seth Godin, Guest Author

For the last fifty years, the driving economic force of the book business has been the advance against royalties.

bookadvanceVirtually all books aimed a mass audience earn precisely the same royalty per book. Stephen King, the unknown first time author and I get paid exactly the same royalty per book by Penguin.

What changes is the advance. This is a non-refundable earnest payment the publisher puts up to entice the author (and her agent) to sign on, to choose them. When everything else is equal (and it often is), the advance is the thing that gets looked for and reported on.

As you can imagine, this affects the rest of the process. The royalties earn out against the advance and in fact are rarely paid at all (if the advance is bigger than the royalties, the author gets no new money). Most publishers don’t associate an advance paid four years ago with a royalty statement that comes in today. (And if they do pay attention, they’re likely to make a non-economic decision– “let’s promote this book even though it’s not selling, because we have a big advance at stake.”)

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If there are two publishers, one with a great marketing and publishing program, and the other with an advance that’s three times as big, guess who wins the author? A publisher with a big checkbook is able to land famous authors, which excites the salesforce, which gets more shelf space in the store which, perhaps, leads to a self-fulfilling prophecy.

Of course, for the last half century, in a static publishing environment, all of this was very good news for authors. Not only did it remove risk for a profession that could ill afford to take risk, but big advances focused the attention of the publisher. You were getting paid a lot and it bought you a better publishing experience at the same time…

(Dr. Seuss rejected this and refused to take an advance from his publisher. He wanted his publisher to have the same incentives he did.)

The advance makes it very clear who’s in charge. The publisher pays, so the publisher calls the shots. The author has a scarce asset, and sells it to the publisher, who exploits it. The friction comes when the author/tribe leader/impresario believes that risks and new technologies can help get her work into the world, and the publisher demurs.

As the underpinnings of traditional publishing start to shift, the pressure to change the culture of the advance are sure to mount. Of course, as long as there are two publishers willing to spend freely, advances will stick around.

Having been paid advances for years, I’m not arguing they should be abolished even if they could be. For those curious about the future of the book business, though, it’s impossible to talk about [digital, the long tail, free editions, sub rights] without acknowledging that they drive the decisions in the heart of the industry.

Copyright © 2013. Seth Godin. Seth Godin has written thirteen books that have been translated into more than thirty languages. Every one has been a bestseller. He writes about the post-industrial revolution, the way ideas spread, marketing, quitting, leadership and most of all, changing everything. Seth is the founder of The Domino Project. Listen to an 18 minute interview with Seth about The Domino Project. Click here! Check Seth’s Blog.

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Larry James is a Professional Speaker, Author and Coach. Larry James presents networking seminars nationally and offers Networking coaching; one-on-one or for your Networking Group! Invite Larry James to speak to your group! His latest book is, Ten Commitments of Networking: Creative Ways to Maximize Your Personal Connections! Something NEW about Networking is posted on this Networking BLOG every 4th day! Visit Larry’s Networking Website at: “Networking HQ!”

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Thursday, June 14, 2012

All About Book Advances

Rachelle Gardner, Guest Author

Let’s talk about advances today. Please keep in mind all of this information is very generalized and won’t accurately describe every situation.

First, what’s an “advance” anyway?

BookAdvanceAn advance is a “pre-payment” of the royalties the publisher expects you to earn on your book. Let’s say the publisher has agreed to pay you a royalty of 8% on the retail price of the book, and your book is going to sell for $14.00. You are going to earn $1.12 for each copy of the book sold. So if the publisher has paid you an advance of $10,000, how many copies do you have to sell to earn out your advance? Your break-even would be 8,929 copies. Your publisher has already paid you the royalty on those first 8,929 units sold. If and when your book sells more than that, your additional royalties will start accruing at the rate of $1.12 per book sold. The publisher will issue royalty statements (usually twice yearly) showing how many copies have sold, and if they owe you any royalties, a check will be included.

What is the average advance, in CBA versus ABA?

It’s impossible to give an “average” advance in either CBA (Christian Book Market) or ABA (American Booksellers Association). They’re wildly all over the map depending on so many factors. I’ve done contracts for advances ranging from $1,000 to six figures. I haven’t found ABA advances to be a whole lot higher than CBA for comparable books, but it’s true the big New York houses can generally pay more than the smaller independent Christian houses. Of course, there are plenty of smaller, independent general-market (ABA) publishers who pay smaller advances, too.

While there’s no average, agents can usually look at a proposal and make a pretty good estimate about the range the advance will end up in. We look at who the author is, what kind of book it is, where it fits into the marketplace, and how much platform the author has. It becomes clear what kind of advance the book should attract.

How are advances paid out?

Advances are usually paid out in halves, thirds, or quarters. The author gets the first portion upon signing the contract (within 30 days), the next portion after the manuscript is delivered and declared “accepted” for publication, and if there is a third portion, it’s due on publication of the book, and the fourth is due sometime after that.

openbookAnother question that’s been asked is about multiple book deals and how the advances get paid out. Here’s how it works. Let’s say you’re offered a 3-book contract with an advance of $10,000 per book, $30,000 total. The contract states you will get half of your advance upon signing, and the other half on delivery of an acceptable manuscript. So, after contract signing, you will get half of the advance for all three books. Half is $5,000, so you’ll get 5,000 x 3, which means you’ll get $15,000 upon contract signing.

Then, as you deliver each manuscript and each one is declared acceptable, you’ll receive the other half of the per-book advance. So, you’ll get three more checks for $5,000 as you turn in your manuscripts.

Is an advance negotiable, and if so, to what degree?

Most advances are negotiable, but that always depends on how much leverage we have. Are there other publishers interested? How excited about the book is the publisher? Is this book a perfect fit for the publisher? Is the book risky or more of a sure-thing? These and other factors determine how negotiable the advance is. On the lower end of the spectrum, particularly for first-time authors, a publisher may offer a small advance that’s basically “take it or leave it.” But as the value of the book goes up, and more publishers are interested, it generally becomes more negotiable.

How does the agent get paid?

The agent’s fee is usually 15% of the advance and royalties. In CBA, the standard practice is for the publisher to disburse two checks, one directly to author (85%) and the other to the agent. General market publishers normally send one check to the agent, who then turns around and sends the author their 85%.

Copyright 2012 by Rachelle Gardner. Rachelle Gardner is a Literary Agent with Books and Such Literary Agency based in California, founded by Janet Kobobel Grant. She works at the foot of the Rocky Mountains in Colorado. Visit her Blog.

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Larry James is a professional speaker and the author of three relationship books, “How to Really Love the One You’re With: Affirmative Guidelines for a Healthy Love Relationship,” “LoveNotes for Lovers: Words That Make Music for Two Hearts Dancing” and “Red Hot LoveNotes for Lovers.” His newest book is “Ten Commitments of Networking.” Larry James also offers “Author & Speaker” coaching. Contact: AuthorsandSpeakersNetwork.com, P.O. Box 12695, Scottsdale, AZ 85267-2695. CelebrateLove@cox.net – More than 110 articles especially for Authors & Speakers at: www.AuthorsandSpeakersNetwork.com

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