More About Money
Yesterday, Joni brought up the nearly-taboo topic of filthy lucre. Writers often pretend not to care much about the subject, but it's hard to create good art without food in the belly and a roof overhead, so sure we care. There's just not a lot of information out there to help us understand the financial side of the business.
First of all, a primer. When a editor wishes to buy the rights to publish a book, she typically offers an advance, otherwise known as an advance against royalties. Royalties are usually (but not always) a percentage of the book's cover price. In the world of genre mass market paperback originals, it's usually between 4% (ouch) and 10%, with 6% and 8% being fairly typical. To come up with an advance, the editor fills out a profit and loss statement (P&L) to try to figure out, conservatively, since it's a crap shoot, how much the book will make. For a great description of the process, read this post by Agent Kristin Nelson or buy this one (well worth the $3.50) on profits and loss by former TOR editor Anna Louise Genoese.
After figuring out the expected author's share based on the estimated number sold, book's price point, and the royalty percentage, the editor will shoot a low-ball (or conservative, depending on your point of view) offer to the author's agent. If the offer has no agent, it will be generally be quite a bit more conservative.) In the everyday world of the romance paperback, this can be anywhere from a low of about $1,500 to a high of around $20,000, depending on how excited the publisher is about the project, how deep are its pockets, and about a zillion other factors. For a completely unscientific but still helpful list of advances and percentages broken down by romance publisher and line, visit Brenda Hiatt's labor of love here. More beginning writers report than veterans, so these figures, IMO, are more indicative of what early-career writers can expect to make.
So what about those giant advances we see reported in Publisher's Lunch? They certainly happen, even in genre fiction, but they're pretty unusual, especially for beginning authors. And believe it or not, there may actually be advantages in a slow build rather than a blazing start, which sets up very high expectations in pretty tough financial times.
When/if the book earns back its advance with royalties (called "earning out"), the author begins getting the additional royalties twice annually. One can't count on this money, and it's slow in coming, but it can build to a significant level, especially when a book's become a surprise hit.
I want to add that in the ten years I've been doing this, I've noticed that advances and royalty percentages for beginning writers haven't budged a bit. In fact, they've dropped in some cases. As writers grow more popular, their earnings increase, but many struggle to stay in the game, much less make progress.
So the financial reality of writing is often a harsh one, but sure enough, there are still writers out there (albeit a minority) make a good to damned good to spectacular living. Who's to say that you or I won't be one of them?
I hope some of you have found this helpful. More info on the money questions can be found in the pages of Donald Maass's The Career Novelist (outstanding resource!) and Richard Curtis's How to be Your Own Literary Agent, which you should have on your shelf even if you already have an agent. Does anyone else have any good, up-to-date resources on money and the writer?