A Different Way to Pay Writers
So to hear it from some, publishing is on its knees and it's only a matter of time before it dies (and no, goth_poser_guy, this isn't directed at you).
There's no doubt that it's been a rough year for publishing houses, but readership has steadily been increasing for years, and things aren't as horrible as they may seem. mfelps and I agree that it's a good time to be a writer. Mark teases me about being an optimist, and I secretly admire his pessimism; when the Yin Yang Nihilist Brothers are in a state of perfect balance, it's clear that what we say is true!
Without going into a huge breakdown of profit and loss statements, publishing's typically worked like this simplified version: A first time writer writes a book with no promise of publication, and they hopefully sell it. If sold, they get an advance (let's say $10,000...yes, for a couple years' work!). They get a certain amount per sale on each book (let's say $1 for this example). All that money initially goes toward paying back the advance. If the book sells 15,000 copies, the writer gets the $10,000 advance (usually paid out in several installments over the course of the time it takes for the book to reach shelves), and then $5,000 more from what they are owed beyond the advance on the sales of their book.
One of the big problems with publishing is the same thing that hit the housing market, the stock market, and so many other things: people just threw a lot of money around. Those first time "sure thing" authors who get a $1,000,000 advance are in some ways in a very crappy situation. If the publisher only makes $750,000, they didn't even make back the author's advance. The writer who is given a $25,000 advance, but makes a publisher $75,000 has done more for the publishing house, in many ways, than the writer who brought in ten times as much money.
Publishing houses have typically done something akin to a smart gambler: they use their best judgment and spread their money around, hoping for a couple big payoffs to cover all their little losses.
Gambling isn't the best way to run an industry, though.
There's been a bit of talk about publishing changing the way they do business.
Instead of paying advances, some publishers are striking deals with writers where no advance is paid. (Imagine working for years not just for $10,000, but for nothing!!! Writing isn't as glamorous as most people think.)
But here's where it gets cool...
Publishers in these deals are paying more on the back end. Again, for the sake of generalized simplicity, let's say a writer is paid a $10,000 advance and they make $1 from each book and they sell 10,000 books, they break even, and they walk away with 10 grand.
Now let's say they get more on the back end...say $4/book. Now that 10,000 copies sold for $10,000 in the first example becomes $40,000 in the second example.
The writer makes more, and the publisher hasn't taken a huge gamble. If anything, publishers can now see how it is working with a particular writer, and what kind of sales the writer may be able to generate.
If you're a first time novelist, you've written the book for nothing but a chance anyway, so why not reduce the stress of paying out your advance and stand to make more money in the long run (or at least on every book you sell from the first sale)? This way of doing things will allow publishing houses to still do what they love more than anything: discovering that next big thing...only without so much of a gamble. (Right now, a lot of publishing houses aren't taking chances on new writers. Hell, many aren't even taking chances on their established writers!)
In the early 90s, mfelps, darthcynthia, and I worked at a small comic book company. The publisher paid up front, and the rates for independent comics was good. We all worried that the money could have been better spent on production costs and promoting the company--not paying us. We would have all taken a larger percentage on the back end, after things sold, in exchange for nothing up front. But the publisher believed they would make a decent chunk of money, and they wanted all the back-end cash. It was a typical work-for-hire deal, with a small percentage in royalties to talent.
The publisher folded because they sank too much money up front into things.
Had the publisher paid us all a larger percentage on the back end, they would have been able to produce more books.
Kind of like some larger publishing houses are doing with talent now.
So that's where things may be headed with publishing. Of course, there's still no sure thing, but I think especially with first time novelists, everybody wins! (Agents may not be to keen on this idea, though.)
In the middle of rough economic times, there may be no better time than now to be a first-time novelist!
EDITED TO ADD: Some writers are obviously still receiving huge advances!
There's no doubt that it's been a rough year for publishing houses, but readership has steadily been increasing for years, and things aren't as horrible as they may seem. mfelps and I agree that it's a good time to be a writer. Mark teases me about being an optimist, and I secretly admire his pessimism; when the Yin Yang Nihilist Brothers are in a state of perfect balance, it's clear that what we say is true!
Without going into a huge breakdown of profit and loss statements, publishing's typically worked like this simplified version: A first time writer writes a book with no promise of publication, and they hopefully sell it. If sold, they get an advance (let's say $10,000...yes, for a couple years' work!). They get a certain amount per sale on each book (let's say $1 for this example). All that money initially goes toward paying back the advance. If the book sells 15,000 copies, the writer gets the $10,000 advance (usually paid out in several installments over the course of the time it takes for the book to reach shelves), and then $5,000 more from what they are owed beyond the advance on the sales of their book.
One of the big problems with publishing is the same thing that hit the housing market, the stock market, and so many other things: people just threw a lot of money around. Those first time "sure thing" authors who get a $1,000,000 advance are in some ways in a very crappy situation. If the publisher only makes $750,000, they didn't even make back the author's advance. The writer who is given a $25,000 advance, but makes a publisher $75,000 has done more for the publishing house, in many ways, than the writer who brought in ten times as much money.
Publishing houses have typically done something akin to a smart gambler: they use their best judgment and spread their money around, hoping for a couple big payoffs to cover all their little losses.
Gambling isn't the best way to run an industry, though.
There's been a bit of talk about publishing changing the way they do business.
Instead of paying advances, some publishers are striking deals with writers where no advance is paid. (Imagine working for years not just for $10,000, but for nothing!!! Writing isn't as glamorous as most people think.)
But here's where it gets cool...
Publishers in these deals are paying more on the back end. Again, for the sake of generalized simplicity, let's say a writer is paid a $10,000 advance and they make $1 from each book and they sell 10,000 books, they break even, and they walk away with 10 grand.
Now let's say they get more on the back end...say $4/book. Now that 10,000 copies sold for $10,000 in the first example becomes $40,000 in the second example.
The writer makes more, and the publisher hasn't taken a huge gamble. If anything, publishers can now see how it is working with a particular writer, and what kind of sales the writer may be able to generate.
If you're a first time novelist, you've written the book for nothing but a chance anyway, so why not reduce the stress of paying out your advance and stand to make more money in the long run (or at least on every book you sell from the first sale)? This way of doing things will allow publishing houses to still do what they love more than anything: discovering that next big thing...only without so much of a gamble. (Right now, a lot of publishing houses aren't taking chances on new writers. Hell, many aren't even taking chances on their established writers!)
In the early 90s, mfelps, darthcynthia, and I worked at a small comic book company. The publisher paid up front, and the rates for independent comics was good. We all worried that the money could have been better spent on production costs and promoting the company--not paying us. We would have all taken a larger percentage on the back end, after things sold, in exchange for nothing up front. But the publisher believed they would make a decent chunk of money, and they wanted all the back-end cash. It was a typical work-for-hire deal, with a small percentage in royalties to talent.
The publisher folded because they sank too much money up front into things.
Had the publisher paid us all a larger percentage on the back end, they would have been able to produce more books.
Kind of like some larger publishing houses are doing with talent now.
So that's where things may be headed with publishing. Of course, there's still no sure thing, but I think especially with first time novelists, everybody wins! (Agents may not be to keen on this idea, though.)
In the middle of rough economic times, there may be no better time than now to be a first-time novelist!
EDITED TO ADD: Some writers are obviously still receiving huge advances!