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Category: contracts

How to figure an advance against book royalties

This will be a little basic for many but maybe helpful to others. Authors often wonder whether the advance a publisher is offering is a fair one. There is a simple formula that can help you to judge.

Advances are, in theory, a prepayment against expected royalties. Authors are often concerned about whether their books “earn out” their advances — that is, whether royalties from actual book sales are equal to or greater than their advance against royalties. The advance represents a kind of benchmark for expectations of a title, and when actual royalties fall short of that number authors feel their titles have underperformed. There is a degree of truth to this, but it’s not the whole story. There are many factors behind the size of advances, and a book that doesn’t earn out can still be a success — the advance excess is in effect the equivalent of a slightly higher royalty percentage.

Still, authors have to do their best with the information they have, so we will assume the advance is logical relative to expected royalties. This being the case, the best way to judge the advance is to get a sense of the publisher’s sales expectations. To do this, try to find out about how many copies will be printed and about what the retail price is likely to be. Those figures will give you a sense of how the publisher is thinking about the title in terms of sales.

As an example let’s use nice round numbers for ease of calculation. Say the publisher plans to print 10,000 copies and sell them at $20 each and is offering the author a royalty of 10 percent off the full retail price. Now, many of the copies that are being printed will not be sold: copies are needed for reviewers and other purposes (among them the inefficiencies of book distribution), but we are only trying to get a ballpark figure, so we’ll ignore that level of refinement.

With that caveat, sales of 10,000 books would equal a total retail value of $200,000, of which 10 percent would be $20,000. Consequently, a logical advance for this title would be somewhere around $20,000. ¬†Woohoo, you’re rich!


Mailbag: What should my royalty rate be?

Rightreading hereby initiates a new feature (no doubt destined to be as fitful as all our others) in which we answer e-mails from readers.


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A reader writes

I know very little about book contracts.

Can you please elaborate on this subject?

Specifically, what percentage of each book sold should I receive as the author?


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Dear reader

The most general answer is “whatever the market will bear.” If you are writing great poetry that will someday be taught in university classes, the answer is no one is likely to pay you any royalty at all. On the other hand, if you are a famous and controversial public figure — Sarah Palin say — you can pretty near name your price.

But the general answer isn’t much help to the vast majority of writers who fall somewhere between those extremes.

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Creative Commons

flickr cc

If you will glance down at the footer on this page (or follow the “about” or “policies” links) you will see that I have replaced my copyright notices with creative commons ones. I’m hardly a leader in this — as a guy who has worked in book publishing for many years I have had the notion of copyright deeply ingrained. And there remain a few pieces, like my article on Gutenberg and the Koreans for example, that need to remain under copyright because of publishing arrangements.

But as a blogger I know that people want and need materials they can use readily and with a minimum of fuss. If I want this for myself, why should I deny it to others? Information, it is said, wants to be free, and I don’t want to be the one to enslave it.

Creative Commons is especially helpful when you need an image to accompany something you’re writing about. Flickr makes this wonderfully easy. By going to http://www.flickr.com/creativecommons/ you can search for photos that have been uploaded with a CC license. As a photo user I would always start there and only go through the hassle of contacting owners of copywrited photos if really necessary. As you can see from the Flickr CC search page, CC licenses have several flavors:

  • Attribution License
  • Attribution-NoDerivs License
  • Attribution-NonCommercial-NoDerivs License
  • Attribution-NonCommercial License
  • Attribution-NonCommercial-ShareAlike License
  • Attribution-ShareAlike License

I’m not sure which is best — there are arguments for each, I suppose — but I chose Attribution-NonCommercial-NoDerivs, in part because this was the most popular among Flickr users, so it’s probably where the majority of the searches will occur. (Is this the best choice? Let me know your thoughts.)

There are a few websites that automate Flickr CC searches, including:

Behold seems to apply some kind of quality filter to search results. FlickCC lets you browse through thumbnails, at 36 to the page. A screenshot from this site is shown above.

There is also a WordPress plugin called PhotoDropper that lets you search for Flickr CC photos from within the WordPress dashboard. Once a photo is selected it will automatically insert the photo along with any required credit. Cool, but I have not installed it because it sounds like your ability to format the results is limited.

Finally, I would like to see the CC logo — which looks like a copyright symbol but with two cees rather than one — become a standard glyph in fontsets.

creative commons loog

Links

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Recognizing scam publishing offers

Ellen M. Kozak has written a nice summary at Wisconsin Lawyer about “Spotting the Publishing Scam.” You can read the full post there, but I think it’s worth summarizing the main points:

  • Real publishers don’t make offers overnight. A publisher who offers an agreement a couple days after the ms. arrives is pulling a scam.
  • A scam publisher may be especially persistent in pushing its contract
  • Check out the publisher on the web and in bookstores
  • Vanity publishers ask for money; real publishers don’t
  • Token advances, such as $1, should be viewed with suspicion
  • A publisher that grossly overprices books may be hoping to make money off sales to authors — in such cases the contract will likely show a below normal number of free copies (normal tends to be around 10-20 copies)
  • A highly restrictive option clause is a common feature of scam contracts
  • Rights not specifically assigned by the agreement should be reserved by the author, not the publisher

In my experience — having negotiated many book contracts — agents generally represent authors better than lawyers, because lawyers know contracts but agents know the book industry. The author of this article, however, is an exception. She appears to know the law and publishing.

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via Adventures in Writing

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Read the contract

You don’t want this sad story to be yours.

your book contract: read it

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