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SubZero61992
November 21st, 2004, 09:24 PM
When an author publishes a book, does the publisher pay them money and then send the author off, or does the author gain a percentage of the money gained by buyers?

Scott Lynch
November 21st, 2004, 11:03 PM
Well, SubZero, it's a little of both.

When an author publishes a book, does the publisher pay them money and then send the author off, or does the author gain a percentage of the money gained by buyers?

When a publisher and an author sign a contract for a book (or books), they agree upon a sum total of what the publisher will pay. Let's say that Joe Newbie writes a novel called Death-Squid of the Vermilion Empire and an editor at Dingleberry Publishing wants to buy it from him. Joe and Dingleberry agree on the sum of $10,000. It's customary for the author to get a portion of this sum upon signature of contract ("the advance") and the rest at a later date.

It's becoming more and more common, as I understand it, for author payments to be broken down into three major installments, which are:

A. An advance upon signature of contract
B. Another payment upon delivery of the manuscript
C. Remaining payment upon publication of the book

Now, you can probably add a fourth step if the book goes out in hardcover or trade paperback before it goes mass market.

So let's say Joe's lucky, and his editor has great confidence in Death-Squid, and he gets a hardcover initial release and a mass-market release about a year after that. It's would be very reasonable to see Joe's payment schedule broken down like this:

1. Joe gets $4,000 after signing the contract;
2. Joe gets $2,000 for delivering the manuscript;
3. Joe gets $2,000 when Death-Squid is published in hardcover;
4. Joe gets the remaining $2,000 when Death-Squid is published in mass-market paperback.

So, while ten grand is a nice tidy sum in and of itself, remember that Joe Newbie only has half of it when the book is turned in; the rest of it is going to be coming his way over the next two or three years, in all likelihood (1-2 years until hardcover publication; a year after that, if he's lucky, until mass-market publication).

And that's the relatively simple part. Now let's talk about royalties.

A "royalty" is a percentage of the cover price of each book that goes to the author-- royalty rates vary greatly depending upon print run, genre, and the author in question, so let's just say it's probably somewhere between 7% and 15% of the cover price, and it tends to get slightly better as more copies of the book are sold.

Remember that $10,000 Joe Newbie got for Death-Squid? Before any royalties start to go to him, all of his royalties go to Dingleberry Publishing to pay back that ten grand. Joe Newbie will not receive a penny in royalties until Dingleberry is paid $10,000 out of his his royalties. Happy the author whose books manage to do so.

Now, if this doesn't seem fair or nice, there's something else you should know. That $10,000 is Joe's regardless of how well the book does. If it tanks miserably and nobody but Joe's mother buys a copy, he still gets his ten grand, though perhaps future contracts with Dingleberry Publishing might be hard for him to come by. His contract should specify that once he turns in his manuscript and once Dingleberry accepts it, they have to finish the agreed-upon payment schedule even if they don't publish the book at all.

Some author contracts even have clauses specifying that if the author dies or is permanently incapacitated before delivering his manuscript, he doesn't have to give any of the money he already has back. So it's not all doom and gloom for Joe Newbie.

Let's take it easy on Joe and say that after a year or two, Death-Squid recoups enough royalty money to pay back Dingleberry Publishing, so from that point on Dingleberry owes Joe royalty money. Typically, Dingleberry will conduct a yearly or twice-yearly audit and send Joe a royalty check for anything over a paltry sum, such as $25. And for as long as Dingleberry keeps Death-Squid in print, Joe will get a check once or twice a year from them. It might be a nice surprise, or it might be beer and pizza money. One never knows.

This leaves out a few bits of esoterica, such as the "Reserve Against Returns," which I'll skip over for now. And I haven't even discussed foreign rights and subsidiary rights. So if you want to know anything about all of that, just let me know.

Cheers!

SL

JamesL
November 22nd, 2004, 04:53 AM
Hey Scott. :)

I'd be interested to hear what you know about subsidiary/foreign rights, if you're willing to tell!

Also - in your profile it says 'novelist' - what works have you had published and by whom?

Scott Lynch
November 23rd, 2004, 05:34 AM
Howdy, James.

Published? What's that? ;) Technically I suppose what I am is a "sold" novelist, certainly not a "published" novelist. I've recently signed two contracts with a large UK publisher (which is very cool and very odd, as I'm smack dab in the middle of North America) and expect to deliver the first book covered under those contracts at the end of this year, which is (gulp!) fast rushing toward me.

We expect to see it published initially in the UK in early 2006; rights for at least two other countries have already been arranged. I'd say more, but it's like this: I'm not technically sworn to secrecy, but we'd just like to keep things a bit low-key for another month or two, when my editor has all the formal announcements and press releases and foofarah planned. That's all. So please look upon me as some sort of Schroedinger novelist, still in the box, neither alive nor dead. Don't ask, don't tell. ;)

But as to foreign and subsidiary rights in general, I can blather on quite a bit. Let's deal with subsidiaries first...

Subsidiary rights are licensing rights to anything derived from a novel or based upon it. Let's return to our earlier example, and give Joe Newbie another break, and say that the Death-Squid series was a big hit. It's possible that someone might want to try and produce a role-playing game, or a film, or a video game, or a calendar, or a line of collectible action figures, or a comic-book series, or a limited edition of scented bath-soaps based upon it. An author's contract will generally discuss all of these possibilities, and specify exactly how these rights are split and how they are controlled and under what time-frame subsidiary rights may be purchased or used.

It's also quite possible that some subsidiary rights may be totally glossed over or ignored by an author's contract with his publisher. Remember, there's absolutely nothing stopping an author and his publisher from adding mutually agreeable clauses to their contract (or subtracting previous clauses) to deal with unforeseen or unusual situations.

There are also a few other weird secondary rights most contracts deal with-- preview excerpt rights, for example, in case the author or the publisher might want to try and get part of the novel published as a teaser in a magazine like Asimov's. Audio-book and e-book rights, too.

But the important thing is that Joe Newbie is supposed to be guaranteed additional money (of some sort, in some percentage) for every subsidiary right a third party secures. Death squids on film? Joe gets paid for that. Death Squid action figures? Joe gets paid for that. How much he gets paid, and when, and how often, will depend upon the commercial power of his creation, and upon the negotiating skills of himself, his agent (if any), and his publisher.

I'll talk about foreign rights in a bit.

Cheers!

SL

juzzza
November 23rd, 2004, 11:41 AM
Hey Scott,

On behalf of SFFW, just want to welcome you to the forum and thanks for the very informative information.

We love it when authors drop in and share their experiences and it is fantastic that you have made it so far with your own writing, please stick around and let us know how things progress.

I am sure the members here who are aspiring writers will have many questions for you.

Once again, welcome, congratulations and good luck!!!

JT

juzzza
November 23rd, 2004, 11:51 AM
One more thing, I know you are sworn to secrecy, lest the Death Squid be set upon you, but can you elaborate on the genre? Fantasy (Epic, New Weird, Heroic Fiction), Sci Fi, Horror... Without giving plot away?

Thanks

SubZero61992
November 23rd, 2004, 08:29 PM
One more thing, I know you are sworn to secrecy, lest the Death Squid be set upon you, but can you elaborate on the genre? Fantasy (Epic, New Weird, Heroic Fiction), Sci Fi, Horror... Without giving plot away?

Thanks


Are you reffering to me or Scott?

Scott Lynch
November 24th, 2004, 03:55 AM
One more thing, I know you are sworn to secrecy, lest the Death Squid be set upon you, but can you elaborate on the genre? Fantasy (Epic, New Weird, Heroic Fiction), Sci Fi, Horror... Without giving plot away?

Since you haven't mentioned wishing to preserve secrecy for anything, SubZero, I'm just going to let my oversized ego run rampant and assume he meant me. ;)

It's definitely a fantasy. I guess you could call it a swashbuckling crime fantasy. Urban setting, late Renaissance/early Elizabethan level of technology and social development, plus all sorts of crazy magic twists and additions. My editor and I have chuckled over all the high-concept descriptions we've come up with so far.

"It's like Winnie the Pooh meets Star Wars!"

"It's like Chicken Run meets The Matrix!"

Actually, we didn't use those. They weren't wildly goofy enough for our tastes...

As for labels, "new weird" and so forth, I don't consider myself part of any literary movement and I would cordially but firmly snark off at anyone who tried to cram me in with "new weird" in particular. If I were going to cite some major influences, I'd offer up The Three Musketeers, Ray Feist's stuff, Matt Stover's Caine books, quite a bit of Mary Gentle and Liz Williams' work, and any particularly cool heist/caper films I might have seen, especially Guy Ritchie's British gangster films (Lock, Stock, and Two Smoking Barrels and Snatch) and The Godfather.

Whew. Say that three times fast.

Cheers!

SL

juzzza
November 24th, 2004, 04:14 AM
Well, I thought my post was clearly supplemental to the one before it, but I apologize if I was unclear. :confused:

Thanks Scott, sounds good.

Scott Lynch
November 24th, 2004, 04:53 AM
Okay, I also promised to talk about foreign rights sales.

Basically (and keep in mind that my understanding of the legalities involved in this process is far from perfect), when an author sells a novel to a publisher, that publisher is granted the right to put the novel out in one "sales area," such as the United States, or the United Kingdom, or Germany, or wherever. Other publishing houses in other countries are free to make offers for the rights to publish the novel in their own sales areas. In some cases, language differences make these zones pretty clear-cut and intuitive. In the English-speaking world, I don't quite know exactly how things work regarding Canada and Australia, if Canadian rights are totally separate from U.S. rights (most of the books on my shelf have both US and Canadian prices on 'em, so I'd guess no), or what.

You know... I think I'll ask the rights people at my publisher about this. I'm sure they can give us a clear answer in just a day or two.

Basic payment conditions for foreign rights are the same as the original payment the author gets from his primary publisher-- a (non-refundable) lump sum up front, to be paid back by a cut of the author's royalties, with the possibility of eventual royalty checks once the lump sum payment has been "earned out." Generally speaking, though, few authors of my acquaintance sit around holding their breaths for foreign rights royalties-- most of them just think of their lump sum payments as the totality of their payment, and anything beyond that is a very pleasant surprise indeed.

Generally speaking, it's the responsibility of an author's agent to negotiate foreign rights deals. Since the agent typically gets a 15% cut of any such sale made, an agent has quite a financial impetus to get on the phone or press the flesh at book conferences.

Interestingly, in most cases, a foreign rights sale covers just the text of the book, and none of the proof-reading, typesetting, jacket design, or illustration work done by the author's primary publisher. The new publisher has to come up with all of that stuff for themselves, which is why a single book can show up in such a wild panoply of cover designs in different countries. I love hunting for cover images from foreign editions of my favorite fantasy series, such as The Black Company and A Song of Ice and Fire.

Anyone who wants to read an in-depth dissection of an author contract, including a description of the sales process, should take a look at Michelle Sagara's LiveJournal (which is chock full of writerly stuff in general):

http://www.livejournal.com/users/msagara/16534.html#cutid1
http://www.livejournal.com/users/msagara/16938.html
http://www.livejournal.com/users/msagara/17154.html#cutid1
http://www.livejournal.com/users/msagara/17653.html#cutid1
http://www.livejournal.com/users/msagara/17673.html#cutid1
http://www.livejournal.com/users/msagara/18285.html#cutid1

And so on, scrolling up through her LJ archive...

She dissects an older contract (10+ years older), and although it's quite different in a few respects from, say, the one I just signed (her older contract discusses many fewer subsidiary rights than mine, as some of the technologies involved in those subsidiaries were either brand-new or not yet invented), it's still really useful.

John Scalzi also has a blog post from a few months ago about writer perceptions of book deals, and the money involved:

http://www.scalzi.com/whatever/002860.html

Cheers!

SL