February 15th, 2005

books

Here's hoping I can add....

x-posted from my own comments in reply to one made on my entry of 2/7/2005:

Aren't advances money against royalties? If I get a smaller advance, won't I eventually make it up in royalties? Author A, who never had an agent, and author B, who does, sell the same amount of books. They both have a 7.5% royalty rate - do they make the same amount of money in the end?

Taken in isolation the answer would be yes. However, it presupposes that the book will sell enough copies to earn out so that royalties start getting paid. And stay in print long enough to do that. Let's take the 7.5% royalty you mention (and I have gotten higher than that for paper/trade - hardcovers start off higher than that) and do a simple comparison.

If author A gets an advance of $4,000 (Tobias' median unagented advance for a first novel) and the cover price on the book is a standard mass market one of around $5.99, you get almost 45 cents per copy as your royalty share. At that rate, you have to sell 8,889 copies (if my math is right) to "earn out" and see the first cent of royalties after your advance. And that means any books returned by the bookstores are above and beyond that number (insert essay on irritating returns system here).

Author B at $5,500 (Tobias' median agented advance), with the same cover price and same royalty share needs to sell 12,223 to see their first royalty check.

If both authors sell 15,000 copies, they get the same amount of money. If both authors sell 5,000 copies, Author B retains their higher advance against royalties and makes more money. With many publishers, if the numbers remain that low it doesn't bode well for book two, but that's another essay.

To a certain extent these numbers are speculative. One doesn't know ahead of time how many books will ultimately sell or be returned by the bookstores. Publishers generally run a profit and loss statement to make an educated guess about what these numbers will be. It would be helpful to my math if I could get a poll of everyone's first novel print run and sell-through rate. Then I could figure out just how difficult it tends to be for an author to earn out their advance for the first novel. I know from experience that it's tough.

Maybe the advantage is the agent can negotiate to have more than 7.5% royalties, a more interesting foreign rights deal, and a movie offer as well? Or do publishers take care of that?

As to this question....the answer is yes, an agent does a lot more than simply negotiate an advance. A good agent does anyway. They may improve other terms of the deal, such as the royalty schedule or which subisidary rights remain with the author, which they can then market on the authors behalf. There's more math to that too. If the publisher retains, for instance, foreign translation rights, they split the sales with the author who gets 50%, still minus the agent's commission on that 50%. If the author retains the rights and the agent sells them, the author gets 100% minus the commission. To keep that simple, if the foreign rights are sold for $1000 by the publisher, the author gets $425 (that's with a 15% commission on 1/2 the amount). If the agent does it, the author gets $800 (that's with a 20% commission, which is the typical overseas rate because the agent generally splits their commission with a foreign representative).

And that's quite enough math for me today. Now I shall go read some contracts for relief!
  • Current Mood
    busy busy