Brian McClellan: How an Author Gets Paid

ratsy

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Interesting blog from Brian McClellan.

http://www.brianmcclellan.com/blog/how-an-author-gets-paid-the-big-picture

I was surprised to see the average advance for a new SFF author in 2005 was $6,000. I have a feeling this was not including small presses. And he says that only 20% of books 'earn out' on their advances. This seems baffling, because publishing is a business, so why would 80% of the books not earn enough to break the publisher even on the advance they dished out.
 
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HareBrain

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And he says that only 20% of books 'earn out' on their advances. This seems baffling, because publishing is a business, so why would 80% of the books not earn enough to break the publisher even on the advance they dished out.
"Earn out" means the royalties the author would have got matches the advance they did get. It has nothing to do with how much money the publisher makes. (Not the same as "break even" in other words.)
 

ratsy

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Yes, fair enough. 20% still seems low to me.
 

Brian G Turner

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Ray McCarthy

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I was surprised to see the average advance for a new SFF author in 2005 was $6,000
I'm surprised. I thought that now only established authors or something exceptional got an advance any more. I thought that went out with typewriter written manuscripts.
 

Teresa Edgerton

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I find it surprising ... well, not surprising to me now, but it would have surprised me back then ... that the average advance is no more now than it was about ten years ago.

And HareBrain is right. The publisher does make a profit even if the book doesn't earn out the advance. But of course, just like any other business, publishers want to make a profit that justifies all the work that went into production and marketing, which is why writers with low sales get dropped and why writers who are mega-bestsellers get huge advances that will never earn out but the publisher still makes a huge profit.

There was a time when the books that brought in huge profits helped to subsidize less popular books that made little or no profit but that the publishers felt ought to be published for their merit alone. That was when most publishers were run more like family businesses instead of subsidiaries of huge corporations. (There is, of course, the famous story of Allen and Unwin publishing The Lord of the Rings even though they believed it would lose them a thousand pounds to do so—rather a large sum in those days—because Rayner Unwin was convinced it was a work of genius.)

Those days are long in the past.
 

Ray McCarthy

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That was when most publishers were run more like family businesses instead of subsidiaries of huge corporations. ... The Lord of the Rings ... because Rayner Unwin was convinced it was a work of genius.)

Those days are long in the past.
Without vision the people perish.
Run a business too long looking only at the bottom line, with ONLY the rules of a book keeper and someday there is no business. How many successful start-ups have been created by Accountants or Mega corps.

Mega corps today only innovate by buying start-ups and then usually strangling them after integrating the IP. Apple's iPhone and MS's phone (via Zune) interfaces bought in. Android bought in. Google Earth bought in.

How many great companies are asset stripped or run into the ground by "investment groups" after the founder has died / retired/ left / voted out?

How imaginatively are the traditional publishers dealing with netflix, Amazon, Google, iTunes /Apple etc by engaging with consumer and technology, or just trying to do deals with bigger new mega corps that are going to suck them dry. Some new big companies are IP and corporate vampires.
 
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MWagner

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Yes, fair enough. 20% still seems low to me.
A lot of creative industries (books, music, movies) have a very high rate of misses to hits. But the hits tend to be huge, so they make up for all the little misses. Why don't the publishers just sign the hits? Because they don't know which ones will be hits. Nobody does.

This is one of the reasons I think music publishers, movies studios and the like are unfairly demonized. Yes, they pretty much care about only the bottom line (which is true of almost all businesses). But by signing and promoting a bunch of authors/acts/movies with potential, knowing they're going to lose money on most of them, they provided a valuable service to new artists. As that system breaks down, we're left with a bunch of individuals struggling alone in a howling maelstrom of pop culture. And the ways they try to distinguish themselves and be heard above the roar (social media, fabricated personas, pre-existing celebrity) aren't any better than the old studio/publisher system. Maybe worse.
 

Brian G Turner

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@BrianMcClellan - congrats on earning out. :)
http://www.brianmcclellan.com/blog/earning-out

Yesterday, I got an email from my agent telling me that The Powder Mage Trilogy had earned out it's advance. This is fantastic. This is like, holy crap freaking awesome, and I'll tell you why. Warning: I'll be patting myself on the back a bit here.

So, why is earning out my advance a big deal? It basically means that I'm no longer living on "fronted" money. An advance is just that; an advance against royalties. Authors don't see any money beyond their advance check until they've earned enough via their royalties... . The rule of thumb thrown around the publishing industry is that only about 20% of books earn out.

The Powder Mage Trilogy is, for accounting purposes, viewed as a single book. ... As far as I can tell from my own spreadsheets, it earned out about three weeks after The Autumn Republic hit shelves, which was just a little less than two years after Promise of Blood. The powder mage books are not bestsellers by any means, but to have this happen means they've sold at a solid, consistent pace for those two years.
 
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