Monday, May 16, 2011

Book Deals: How They Do (and Don't) Work



I’ve been seeing this question a lot from authors lately. What can I expect with a book deal? How do advances work? Are there royalties? How do they work? What about movie deals? There’s a lot of misconceptions about what comes with a book deal among authors, so I thought I would clear some of those up.

Many authors have the same idea of what will happen when they finally nab that long sought after book deal. Immediately images of 6 figure checks dance through your head. You see yourself on talk shows, posing for photo shoots, landing big movie deals, buying a mansion, a Ferrari and maybe a yacht. Psh. Yeah, right. Sorry, not how it works. So how does it work, you ask?

The Contract:

First, I want to reiterate the most important thing every author must understand about publication. Unless you are self publishing, money always flows FROM the publisher TO the author. Not the other way around. With the exception of the small cost for postage, publishers and agents NEVER EVER ask for money. They pay you.

So after the publisher has read your ms and decided to publish your book, or, if you choose to solicit an agent, after they have decided to represent you, the offer comes in the form of a contract. Typically, a publisher or agent will call your or email you first, telling you they are interested in publishing your novel (or in representing you). They may send the contract out with the initial email, or, upon your agreement to let them publish the novel, they will send out a second email with the contract included. Whether in the initial phone call or email, or when the contract itself is sent out, the details of the contract should be clearly laid out for the author before any contracts are signed.

When the call or email comes in from an agent or publisher, there are a lot of questions the interested party will ask you, and a lot of questions you should be asking them, before you enter into any deal. Here's a great blog from Literary Agent Rachelle Gardner, where she lists the questions you should ask an agent. Also check out this blog from her, where she tells you what usually happens when you get "The Call." In that post, she lists the questions she usually asks authors she's interested in representing. The questions a publisher asks are generally along the same lines, as are the ones you should ask them. The amount offered for advance, the percentage of royalties the publisher wishes to offer, how many books they want to publish from the author (there may be more than one, and I’ll get to that later), are all laid out in the contract, along with possibly a few other things, such as an escape clause, or the inclusion of movie deals as part of the rights. I’ll explain those in a moment as well. But, often there is confusion as to what advances and royalties are, so lets make sure we have the terms straight first.

Advances and Royalties:

 An advance is a loan paid out against the earnings the author makes on their novel. The amount is calculated based on what the publisher thinks the novel will make within its first year after it hits the shelves. So the publisher is estimating the amount the novel will make in its first year and paying that to you ahead of time. This means that until that money is made back in sales, the author won’t receive anymore money on the novel. Once the money is made back, any additional money the author makes on the book is theirs. The amount the author makes at this point is based on the royalty percentage offered in the contract. A royalty is a percentage of the money made from each book sold. Put simply, it’s the author’s cut of the sales.

With me so far? Good.

But what is the usual amount an author can expect for advances and royalties? This can fluctuate so much that there is no one answer. How much an author receives is dependent on a lot of variables. It can change depending on what kind of book you’re writing, whether you’re an established author or a first timer, how well known the publishing house is, and whether or not you’re a celebrity. If you’re novel is a mainstream topic for which there is a wide audience, you will get a bigger advance than if it’s based on something that’s considered relatively obscure, because there won’t be as many sales. If your name is big because of something else – so if you’re Lady Gaga or the Rock – you’ll get a larger advance, because fame sells. A first time author will get a smaller advance because the publisher has no track record on you. Publishers dole out advances based on what they think the book will make, and as a newbie, they have nothing to go on except the book itself. Bigger name authors like Stephen King or J.K Rowling get bigger advances because the publisher knows the name on the book alone will sell. From what I’ve read, advances to new authors are rare. There is no guarantee the book will sell, so they don’t want to take a chance on giving an advance the author can’t make back. Sometimes, when there is no advance, the royalty percentage is higher, but not always. Smaller, less known publishing companies also tend not to give advances. Advances are most often given by bigger houses and to known authors.

So let’s say, you’re a first time author. In my research, I’ve found that average advances range from zero to 2000$. That’s right. Barely enough to cover most monthly mortgage payments. I’ve seen them go as high as 10,000, but this is extremely rare for a newbie, and considered huge for an unknown. For first timers, most times there isn’t an advance at all.   

So what about royalties? Typically, new authors get between 7% and 10 %. It can be as low as 5%. Famous authors can get as high as 25%.

So here’s how it works. Let’s say your contract gets you a thousand dollar advance, and 10% of the royalties, on a novel that goes for 15$ apiece, the typical price of a paperback book. It’s important to understand that the advance isn’t made back when the book makes 1000$ in sales. It’s made back from YOUR CUT. 10% ON THE DOLLAR. Then, the rest of the royalties are yours. And that’s assuming you don’t have an agent. If you do have one, agents typically charge 15%. This means, the agent gets 15% of your 10% of the royalties, and 15% of your advance. And you still have to make the agent’s 15% of the advance back.

Oi. I’m probably scaring all of you out of making a living as a writer, and if not that, then out of getting an agent. That’s not my aim. (There are advantages to getting an agent, even with the cut-aways to your checks, and you can read about those here). But the truth is, making any real money off of writing is exceedingly rare. Even with the influx of books on the market today, the ones that become best sellers are a drop in the bucket compared to the number of books that no one has ever heard of. Writing must be a labor of love, done not for the money, but because you love telling stories. If you choose to become a writer for money chances are, you will wind up sorely disappointed, and probably broke. And don’t start spouting off to me about famous authors like King or Rowling. Writers who achieve fame such as that are the exception not the norm.

Anytime a contract is signed, there is money involved, and if you are an unknown, publishers take a huge chance on you. That’s why publishers and agents say they have to really love a book. It’s in a publisher’s interest to see that a book does well, and it’s in an agent’s best interest to see that every book they pick up is sold to a publisher, and that the author gets the best possible deal for their work. Getting a book to a publisher and getting it onto shelves is expensive. It costs agents and publishers thousands, sometimes millions of dollars a year. If the agent or publisher is not one hundred percent behind your novel, they won’t take the risk of losing the money involved.  

Escape Clauses:

I’m not certain this is the correct term, but with some publishing contracts, there is a clause by which the author can get out of the contract if things aren’t to their liking. I’ve heard of authors asking for one to be included in the contract up front. This is usually done with a newer, unknown publishing company. Escape clauses can be beneficial if the author is signed on for a series of novels in a long term contract. Before asking about this, check with a lawyer or someone else in the know to find out what the correct term is, and how best to approach the subject with a perspective publisher.

Multiple Book Deals:

It’s common for publishers to sign authors on for more than one book at a time. These days, series books are huge sellers. There are people who only read a novel if it’s part of a series. Publishers love these, because they are the gift that keeps on giving. If the first novel in a series becomes a best seller, the second book in a series has a greater chance of doing as well if not better than its predecessor.  

Take my series, Shadowsword for example. Shadowsword is planned to be at least three books, with the possibility for more. When the first book, Children of the Dragon, is published (yes, I say when, not if, lol) chances are the publisher won’t sign me on for only CotD. They will probably sign me on for all three books in the series. Why? Because if readers love CotD, they will want book 2, so it will probably do as well if not better than CotD. If book two does even better, Book 3 will probably do even better still. Signing me on for all three books guarantees that the money made from the books go to that publisher.

But what if you’re not writing a series? Will a publisher still sign you on for more than one book? If you have more than one book, possibly. Why? Because even if it’s not a series, if a novel from an author does well, the next book from that author will have a better chance of selling because it bears the author’s name. Signing you on for more than one book prevents you from going to another publisher until you write the required number of books according to your contract. It also allows the publisher to squeeze more books out of the same advance.

When it comes to multiple book deals, advances are sometimes split up over several books. Typically, with a multiple book deal, the author is required to write a certain number of books within a set amount of years, usually 3 or 5 years, with the advance sometimes split up over that 3 or 5 year period. Splitting the advance up ensures the books are delivered before the author sees the money, and offers less chance of a publisher ending up paying for books that are never delivered.This is why it's a good idea to get as many story ideas as possible, to get them down as fast as you can, and to try and finish every story you start. Having more than one book on hand lets publishers and agents know you won't be just a one book wonder, and that, even after your first book, you'll keep making them money. There's a great blog with more information on multiple book deals here.

Movie Deals:

Ah, the ever coveted movie deal. Every author dreams of seeing the world and characters they create brought to life on screen. There is something about the thought of seeing their character walk across a screen that makes writers go gaga. Not to mention the potential money they can make. But what are the chances of seeing your novel on the big screen?

Lately it seems for better or worse, every novel that does even semi well in book stores ends up on screen. There is a reason for this. Coming up with new and interesting story lines for movies is becoming more challenging for producers every year. With so many other forms of media to choose from, and with the ability to obtain much of it for free, producers have to rely more and more heavily on special effects to grab the attention of movie goers.  So it’s only logical that when the public loves a book, producers will jump at the chance to get it on screen. Plus, for us readers, there is something about seeing a character we have come to love walk across a screen that drives us to the theater in droves. How many of you have fallen head over heals for a character in a book and the moment you see an advertisement showing him or her in a live action film, you felt a huge rush, and proclaimed, “I gotta see that!” But what does this mean for authors? Doesn’t it mean that the chances of seeing your novel in Hollywood are petty good? Not necessarily.

Time works differently on film than it does in books. Slow or talkative books don’t do well in live action, so the story has to allow directors to adapt those parts so that they at least feel action packed. Plus, there are certain things readers will accept in book form, but as soon as we see it on screen, it becomes cringe worthy. It’s easier for us to suspend our disbelief when reading than it is visually, and turning something into a cartoon doesn’t always make it easier to watch.

In reality, the chances of seeing your novel in movie format are astronomically small. Publishers may include the right to turn the book into a movie in the contract. But this doesn’t mean the novel will be turned into a movie. What it means is that it’s included in the rights. What it means is that if a producer comes to the publisher asking to adapt your novel for a movie, you can’t prevent them from accepting the deal. If movie adaptations are included in the contract, you will need to ensure that your contract allows you to receive a percentage of the cuts, or that the right to sell the book to a movie company remains in your hands, but that’s usually a separate deal. Still, the chances of that happening are tiny. In reality, if a publisher or agent tells you right off the bat that they will take your book to Hollywood, it’s not only unlikely to actually happen, but it’s a red flag. Publishers and agents know this is a rarity, so if they promise it, I caution you to seriously question the legitimacy of the agent or house. It’s not impossible to see your book hit the big screen, but don’t expect it, and if someone makes that promise, something is wrong.

Promotion:

Writers often think that once they publish a book, the publisher or agent does all the work of promoting the novel and the author need only sit back and let the money role in. Not so. It’s important to understand that, while publishers will pay for printing and production of a book and get it onto shelves, and agents will help a writer find a publisher and secure a contract, in order for readers to buy a book, they have to know about it, and promotion is not included in the contract. Getting the author’s name and title out there is the author’s job. Publishers and agents will put you in touch with the right people and point you in the right direction, and they offer connections that make it easier to get your foot in the door with people who can get you exposure. But actually gaining that exposure is the author’s obligation, not the publisher or agent.

Editing and Rewrites:

When a deal is struck between publisher and author, chances are at some point in the production process, a writer will be asked to rewrite parts of their book. Adding scenes, deleting them, changing parts of the story or characters, all to make it more marketable and give the book the best chance of selling well. And since it's an agent's job to see that an author gets the best deal on any novel, they will often make suggestions on how the author can make the book more marketable. But authors need to remember that  publishers and agents don't do rewrites, agents don't offer line by line edits, and publishing editors only fix 1% of editorial mistakes. While agents will make suggestions for improvement, and publishers will ask for rewrites, it's the author's responsibility to implement the changes themselves.

Copyrighting:

This is one of the most common questions I see from authors – is it necessary for me to copyright my work before sending it out? This at least has a simple answer: No. It is not. Legally, when an author writes a novel, until it is either printed or a contract is signed, all rights belong to the author. And by printed, I don’t mean when it’s printed off your printer on paper. I mean when it’s printed by a vanity press. (Vanity Presses are a whole other issue, and they are a scam every writer should be aware of. I will be posting a blog on vanity presses later this week, so stay tuned for details on that).

When a publisher buys a novel, it is registered by the Library of Congress. It’s automatically copyrighted. Copyrighting your work before sending it out shows publishers you are an amature who doesn’t know how the business works. I’m not saying it doesn’t happen. Unfortunately, there are agents who steal work, and there are companies who pretend to be legitimate publishing houses in order to take an author’s work. But publishers who do it are usually vanity presses, and there are red flags to watch for when looking over perspective agents. Writers Beware Blogs has a list of agents and publishers who are known to scam writers. This list is updated regularly. When researching for agents and publishers, check out that site to see that the ones you're considering haven't been blacklisted on there.

In addition, I know that sometimes writers also steal work. It’s unfortunate, but it happens. But there are ways to safeguard yourself against this. I’ll also be doing a blog soon, explaining how to minimize the chances of being defrauded by agents and other writers.

So what is the bottom line, here? With the likelihood of making little to no money on novels, am I saying you shouldn’t enter a career in writing? Not at all. What I am saying is that if you think nabbing a book deal will make you famous or earn you buckets of money, think again. If you choose to pursue publication, be prepared for a lot of hard work, long hours, a lot of pressure, and very little pay. If you really love writing, and I mean really love it, go for it. The sense of accomplishment and seeing your name in print, the rewards of having even a small audience enjoy your stories, is more than worth it. I’ve seen plenty of writers regret having gone into the field for the money. But I’ve never seen one regret having written a book. If you enter into the field of writing, do it not for money, but for the sheer love of the craft.  

Until next time, everyone, write on!

Raven

15 comments:

  1. Wow Raven... That was great! I've always had the idea that getting published requires a lot of hard work followed by good luck, the wind blowing in the right direction and possibly divine intervention? Anyway... I'm still going to have a go (mainly because I promised Ree Vera I would, and I don't go back on my promises!) Fab topic and very informative. Thanks.

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  2. Thanks, AlinasVoice. Glad you found it helpful. If you love writing, go for it. It's hard work, but if it's what you love, it's worth it. And yes, you should always keep your promises. lol.

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  3. whoa this was very good! I myself have been wondering all these questions so I'm glad the topic was requested. Otherwise I'd have requested it. Lol. Great job as always Raven. You covered everything I could think of asking. Just wondering though...is there a typical amount that new authors make? I heard from several ppl not to expect more than two grand for your first book. But when I ask around, it seems ppl are squeamish to talk about money. Do you know? Or is it just...taboo to speak of such things?

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  4. Thanks, Ree. I'm glad you liked it. As to the question, yikes. That's a really broad question with a complicated answer, but I'll try and give it in the easiest way.

    As to why people don't talk about it, it's probably because it falls under the same catagory as asking a woman her age, or asking a business person how much they make. lol. But it might also be because, like with advances, there is no one answer that fits all. How much a person makes on any book depends on many of the same variables as I mentioned in the blog with advances. There are so many variables it's impossible to give a definitive answer. What I can do is give you an example.

    J.K Rowling, a first time author with her Harry Potter books, was making roughly 20,000 a year in royalties on the first and second books. It wasn't until she landed the first movie deal that she earned any real wealth. And that amount is normal for a first timer with a fiction novel. It might even be a little high. Fiction is a harder sell, and new authors don't have the benefit of a fan base in order to generate sales. They have to rely on promotion and a certain amount of luck. Many readers look for books from authors they like first, so barring a stroke of luck, sales are smaller than with an established author. Rowling would have got a relatively small royalty rate, and the books didn't start doing really well until the movie deal. Which is also normal. The large majority of books don't even hit mid-list sales, and an even smaller amount reach best seller status. I'm not sure if she got an advance, but I do know she was signed on for all 7 books.

    Since you asked me another question in chat, "How come new authors get nothing in advances?" I'll answer that too. As I mentioned, publishers have no track record on a new author, so they have no way of guaranteeing that a novel will sell from a newbie. Since advances have to be made back in sales, when publishers give them out, they are taking the risk of doling out money that the author won't end up making back, which means the publishing house is out the cash. Most smaller publishing companies can't afford the risk, which is why only the huge name houses tend to give them out, and only to established or famous authors, because there is a greater chance they will see a return on their investment.

    Does that make sense?

    Raven

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  5. Informative and quite detailed. Answered all my questions. :D

    Though, now I'm a bit squeemish. Not about the agent/contracts and such--though they do make me kinda nervous. The point that made me squeemish was the point on serial books and how they are quite popular just because there is a possiblity to continue with characters people fell in love with from a previous novel. Not that it's a bad thing at all, it just made me think about my novels. There's just two books in the...series? (Can it even be called that?) The story could be stretched into a third book, but that's pushing the story too thin.

    So what I'm wondering is, basically, how many books are typically in series books?

    I've seen some as many as 3 (trilogies), 4 (quartets), 5 (usually I see this many in epics), and some as long as 13 books (Namely, Wheel of Time. This is the longest I've heard of for a series).

    This 'series' issue has been on my mind for a some time and not knowing if I can squeeze at least ONE more book out of this duo (I've been wondering, particularily, if they ask to make it at LEAST a trilogy for a deal), has made me just a little...worried, I guess.

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  6. Seriously?! Some authors make nothing with their first book? I didn't know that! Wow. No wonder they say writing doesn't pay. But still, I want to be a writer so bad. I don't care what I get paid at first.
    So how much do new authors have to sell to be considered for another book deal? Or worth paying more?

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  7. Ok, I get what you're saying. And yeah I do see how that could be considered a question like a woman's age. haha!
    But what happens when a new author already has a fan base? Even if it's small? Do publishers take that into consideration? I know some take things like blogs into thought when signing. Especially if they are well liked and have steady streams of traffic. But I'm curious as to where fan bases fit in. Nowadays, with facebook, twitter, and other social networks, it's very possible for a new author/unpublished author to gain a sizeable fan base even before their name hit shelves.

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  8. Lots of questions here, so I'll try and make this as short as possible, but bare with me if it's a bit long. It kept saying the reply was too long, so I'll have to answer in two parts.

    @Maddie, As far as how long as series can be, I don't know about other books, but I know with fantasy and romance, there is no set limit. Romance series tend not to have a lot of novels in the same series, but there are the occasional ones. Erotica and paranormal romance writer Gena Showalter's Lords of the Underworld Series is currently 7 books and rising. R.A. Salvatore's long running fantasy series Dritz Jordan is currently at 18 books (I think). Dritz has been running for 26 years, and just released it's 25'th anniversary addition last year. On the other hand, I have two series that are only two novels. One, by Dennis L. McKernan, has book one, Into the Forge, and book 2 as Into the Fire. The other is by Margret Wiess, the first being Mistress of Dragons, the sequel being The Dragon's Son. How long a publisher will allow a series to be depends on how well the books sell. As long as a series continues to sell well, the author can continue the series. But publishers will not accept or deny a novel based on whether or not there are three books, or even two. If a publisher things a book will sell, they will accept it. They may ask you to extend the series if it's doing well, but unless you sign on for more, you don't have to do them. Publishers typically ask authors how long they plan the series to be before a contract is signed, and if the author says they can only do two, then the contract includes two. If the publisher wants more, they may leave the contract open ended, meaning that if the author is able to do more, they have the option of adding on more books. Whether or not a contract is a set number of books or if it's open ended is one of the questions an author should ask an agent o publisher. So, as you are planning on HB being two books, this is what you will tell the publisher, and if they want the book, they will accept the terms. They may try to convince you to do more, but they won't refuse the book for saying no.

    Other two comments answered in the next post. :D

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  9. Chirri, that's right. New authors often make nothing up front, and see no money until the royalties come in. And I feel the same way.

    As far as your question, I don't think there is a set amount an author has to make in order to be considered for another book. I think it's a judgment call. If the publisher feels there is interest in another book from the same author, they will want more from them. As Rachelle Gardner says in her blog, publishers aren't looking just for books. They are looking for authors whom they can turn into a brand name, one upon whom they can build a fan base and a following. So the more chances that they can generate sales from a new author, the more chances the author has of getting a deal for additional books after the first.

    Ree, that's a great question. As I said in reply to Cherri, publishers want authors for whom they can build a following, because it increases the chances the author will continue to bring in sales after the first book is published. Among the questions she asks perspective authors, Rachelle Gardner asks how market savvy they are and whether or not they have a following. This is why agents and pubs ask this, because when authors have a following, it increases the chances of sales, and it means the book will have an easier time breaking into the public. If an author has a substantial fan base, they have a better chance of getting accepted faster than if they don't. I am not sure, but I would think that if an author makes themselves widely known before publication, they may get an advance where they otherwise would not, and the advance may be bigger for it. But I would think the fan base would have to be substantial in order to influence the deal, enough to guarantee a large number of sales. But a fan base doesn't guarantee an advance or a larger sum. It's easy for people to like a page or say they will buy a novel, but whether they will actually buy the novel when it comes out is a whole other thing, because they are spending money.

    To anyone who reads any of my blogs, I love answering questions and hearing what people have to say. If anyone has any questions, please feel free, and I will do my best to answer you as soon as possible. Thanks for reading.

    Raven

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  10. I read this yesterday but didn't comment. Now I am. That's a lot of information you got here but it's stuff every writer needs to know and probably wonders all the time--they just don't ask. Or don't know who to ask. Great post!

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  11. Thanks, Rue. I love posting things like this, that help writers and provide a place to get information that might otherwise be difficult to find.

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  12. This is incredibly helpful. Thank you so much for spelling it out so clearly; I really had no idea how half this stuff works.

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