Monday, February 13, 2006

Jeremy Snippet quotes from real life

Jeremy Snippet has contributed a lengthy comment on my post of 2 December 2005, which was written in response to an earlier comment of his. As 2 December is now far back in the mists of time, blogwise, you are unlikely to see this comment unless I point it out, so that I now do.

Jeremy (a pseudonym) is evidently a person well connected in the media/book world and he gives some real-life examples of the advances paid by publishers to real-life writers. These advances he describes as fees, a terminology which I think is appropriate. He also maintains that 'known names', or favoured parties, get paid a hell of a lot more than unknowns from the sticks. I wouldn't disagree with that either.

Where I do differ from Jeremy slightly is in this respect: I do not believe that publishers wholly disregard sales calculations when deciding what advance to offer an author, whether a person of standing or otherwise. But their sales calculations are made on a basis different to that which most writers might expect, given what is stated (or used to be) in the typical bog-standard contract.

Writers' remuneration used to be based on a royalty rate, typically (for hardback) 10% of the recommended retail price. That used to be sensible for books with sales of a thousand copies or two (and maybe still is sensible). But when you get a book which is likely to sell tens of thousands -- or which they hope will sell tens of thousands -- the arithmetic becomes completely different.

If you order a print run of 100,000 copies, then the unit cost of each book falls to an amazingly low figure. Which means that a publisher can afford to pay to a writer a sum of money for each book which is far in excess of traditional royalty rates and still make a substantial profit.

That is the main reason why huge advances can be 'justified' -- at least in the eyes of an optimistic editor/publisher.

Other factors also enter into the calculation. A bidding war may 'force' a publisher to pay more than she would wish. After all, you've got to win an auction every now and then or you cease to be a credible player, and you don't get offered 'big' books at all.

Also, there may be other perceived (if not readily demonstrable) benefits from publishing a famous name for well-publicised huge advance. Prestige. Getting talked about as a big-time publisher, which encourages other big names to write for you. And some of those big names may be dumb enough to be so dazzled by your big name that they will work for less than their market value. That kind of thing.

Of course, it isn't an exact science, and, yes, many hard-working writers do end up getting a pittance and little thanks. But, as they used to say in the trenches in World War I, if you can't take a joke you shouldn't have joined the army.

2 comments:

peter said...

All fascinating, and no doubt accurate. Thanks for posting this - it's a great insight all round.

On the one hand, I think massive advances for obviously doomed celebrity / friends-of-the-publisher titles are insane, but publishers do pay big advances for books for a number of reasons: recouping the outlay through rights being one (including translation and serial), prestige and 'loss leaders' being another. A third of course is the insane belief that it will sell enough copies to earn out its advance, which is statistically very improbable I think, with Jordan and Sharon Osbourne recent exceptions to the rules set by Greg Dyke, Jon Snow and (back in the day) Anthea Turner.

However, publishers obviously need to offset the books they pay a lot of money for (which may or may not sell) with books they pay less money for (which may or may not sell). In the same way that bookies stagger the odds on bets, publishers need to do this with risk on titles. And of course, economies of scale do mean that a publisher eanrs more money on books that sell lots with a lower unit cost. But an author also tends to earn a 'flat' rate of royalty: so if the book sells past the advathen income is guaranteed and is proportional to sales.

Anyway, staying on topic. I wanted to add by saying that whilst this is all true, there is another tier to the equation: the retailers. Publishing is insane (we all know this) but particularly so when you look at the retailers. Publishers take all the risk (see above) *and* take the risks of printing enough/too few copies when a book comes out or as it takes off - the opportunity cost against unit cost axis. It's a tough balance to strike.

Retailers on the other hand have a win-win situation and enjoy fabulous terms: 'overnight' re-orders for fast-moving stock, minimal stock, inventory and 'supply chain' charges and - of course - full term 90 day returns.

If this weren't enough, publishers have agreed to discount structures where they tend to not only pay for marketing a title (or sumbitting it for a marketing campaign) but also meet the retailers on the discounts.

The ones with all the money are the retailers, surely?

Anonymous said...

A last word on this, I promise.
I think you are too sanguine and forgiving towards publishers. Some are very nice, and most would like it said of them that they advanced the cause – whatever the cause is. But, as a profession, they are rank amateurs. It could be argued – indeed, this seems to be your settled view – that authors who complain that publishers are insensitive and calculating are like punters who feel cheated when the prostitute with whom they have just passed the last ten minutes turns out not to have a heart of gold.
There is merit to this argument, but I doubt that anyone feels the better for it.
Most individual publishers and agents are well off and economically stable – at least until they are fired or go bankrupt. Most authors, by contrast, are poor as church mice. This is not a happy state of affairs. Itt smacks of exploitation. But what really sticks in my craw is the cosying up by publishers to a certain kind of author – often a top Fleet Street columnist or commentator, or else a showbusiness "celebrity' – to whom they advance huge fees as if fame and past success in another field were in themselves a guarantee of good writing.
Many of the books that result from this corrupt practise turn out to be third rate, with tiny sales. But the publishers are not put off. They are happy to throw good money after bad, believing that success in one area merits success in another, regardless of the facts.
Meanwhile, those at the bottom get screwed. Whatever happened to good business practise? Those who are awarded huge advances for books that bomb should find at the second time of asking that their "fee" has been commensurately reduced. The considerable savings resulting could then be passed on to deserving and struggling authors who have no platform and no clout but may well have the quality that is so often overlooked: talent.
Anyway, thanks for listening. I love the blog.