The Passive Voice picks up a piece by Mark Gottlieb, a literary agent turned publisher, about royalty rates. Mr Gottlieb opts to add to the confusion between advances and total earnings. These two things are only related in so far as a book which might expect larger sales, thus larger royalty income, will probably come with a larger advance than one which has less potential — an advance on a big number will, unsurprisingly be larger than a similar percentage advance on a smaller number. Authors’ year-by-year income is of course affected by the timing of payments they receive. If you get a big advance in year 1, covering sales which will be made in years 2 and 3, clearly your income in years 2 and 3 will be lower since you will already have received these royalties as part of the advance. To repeat the trick you’ll have to try getting another publisher to give you a big advance for another book. This is unfortunately tough to do too often without actually buckling down and writing some of the books thus contracted.

None of the forgoing is particularly novel or surprising. What is surprising is how commentators almost always focus on the advance — “So-and-so has sold her latest book to Publisher X for $100,000”. This is just nonsense. Unless the book is a failure the author’s going to be getting a lot more than $100,000 — she’ll be getting a royalty on every copy sold. I guess it’s neater to write “So-and-so has sold her latest book to Publisher X for $100,000” than “So-and-so has received an advance of $100,000 from Publisher X, which implies her book has strong sales potential”. Rather more interesting might be the fact that she negotiated a royalty of 10% on the retail price (not on receipts) and has an escalator clause raising the royalty rate to 15% after the sale of 200,000 copies: but all that detail is too much for the brevity-focussed commentator — plus of course probably nobody’s telling them that sort of detail!

Mr Gottlieb gets really specific though:”Advances range broadly, from a few thousand dollars (or less) to millions, but royalties, at least among the top houses, are basically the same. Authors are paid, for hardcovers, 10% of the cover price on the first 5,000 copies sold, 12.5% on the next 5,000, and 15% thereafter. For paperbacks authors receive 7.5% of the cover price (occasionally with an escalator) and for eBooks 25% of the publisher’s net receipts. Many independent publishers pay lower royalties than these, but rarely do they pay higher. Competition between publishers takes the form of advance competition, with royalties generally being very similar, especially at the big houses.” Now this isn’t really wrong; it’s just stated far too strongly. Royalty rates will group around this sector of the target, but to say “Authors are paid . . .” is much too specific. “Many authors are indeed being offered royalty rates which look sort of like this” is about as far as I’d want to go.

We do not doubt that average authors’ earnings are declining, but this has nothing to do with Amazon, or with reduced royalty rates. It has to do with reduced sales. I’ve no idea what the right numbers might be, but imagine a book market which was worth $100,000,000 a year. If there are 100,000 books published, each book will be earning $1,000. If there are only 10,000 available each will make $10,000. The hard fact is that there are more books being published today that there are (large numbers of) readers out there to buy them. By and large if you’ve read fifty novels in the year you are not immediately in the market for fifty more. For readers this is great: a book dealing with your specialized interest is almost certain to be available. For writers the news is mixed: good in that you’ll almost certainly be able to get your book published; bad in that you become less and less likely to be able to make a fortune from it. We are not happy that authors incomes are not rising, but “employment” as an author is not quite the same as employment as a miner. You didn’t sign up for a wage.

Keep your fingers crossed though, I’m betting we are about to see increases in the cover price of books. As publishers have been doing pretty well over the past couple of years, there may be room for an upward adjustment in royalty rates, to allow authors to share a bit more in the enhanced profitability of the business: but caution — history suggests that a profit boost today will be followed by a drop, back to the long-term norm.