Thursday, June 12, 2014

The Curse of the Six-Figure Advance

Don't let anyone fool you--writing is NOT its own reward.

Writing is fulfilling, fun at times, and most of us would do it for free (shhhh...don't tell anyone), but a large part of the reward is putting our work out into the world and seeing what comes back. We need to see some positive results, something that tells us our time and effort are worth it, something that keeps us motivated on those days when it feels like the story is going nowhere and we don't think we have the will to carry on.

Among the markers we writers use to gauge our success (for better or worse) are bestseller lists, awards, movie and TV deals, glowing reviews from publications and fans alike, and blurbs from famous people. Oh yeah--and that little thing called a book advance. The single, most concrete measure of the worth of our words. The fact that any publisher would pay to put our words into print is a pretty heady thing, but when a publisher decides they are willing to pay a lot for it, well, that's the stuff of writers' dreams.

The bigger the advance, the better, right? Not necessarily. In fact, sometimes a bigger advance can be a bigger headache.

Before I delve into the reasons why a big advance can be problematic, it's important to understand how publishers determine what to pay for a book in the first place. When it comes to a first-time authors with no track record, it's anybody's guess how many copies of their book will sell. Publishers look at trends, the sales of similar titles, the current marketplace, and then make their best guess. That's right, guess. No one knows which books will hit the bestseller lists and which ones will tank. It's all a crap shoot. So the publisher takes a guess and makes an offer based on that guess. If another publishing company is interested in acquiring the same book they will also make a bid, driving up the price of the advance. Then it becomes not just a game of how well they think the book will sell, but how much money they're willing to risk in order to get the book. As the price goes up, the author gets more and more excited. He may feel this is a reflection of the value of his work, when really it's a competition between publishers to see who will "win" the book. The problem is, it may not be an accurate reflection of potential sales.

Oh, sure, in the short term, a big advance is a wonderful thing. It's lots of money in your pocket that you get to keep no matter how your book sells. It also means lots of publicity--a big book deal is often published in the trades, garnering attention well before publication. The publisher is more likely to make the book a higher priority on their list. And--let's admit it--being in the "six-figure club" just feels fantastic. It's like joining the major leagues.

Over the long term, though, the author's sales might fail to live up to that big advance. In fact, the vast majority of books will fail to earn out their advances. It may not seem like a big deal, I suppose, considering that you've already received a nice paycheck, but what happens when you try to get your second book published? You now have a track record. When a publisher considers buying your next book, they are going to look at your sales. Here, the size of your previous advance matters--a lot.

For instance, let's compare two authors--Author A and Author B. Author A received an average-sized advance of $20,000, while Author B received $100,000. Both earned $30,000 on sales. Who looks better on paper? Author A--she earned out her advance and collected an additional $10,000 in royalties. Her next contract offer is likely to go up considerably.

While Author B sold the same amount of books, his statement shows he still needs another $70,000 in sales to equal his advance. This shows up as a negative $70,000 in total sales. It's likely Author B's next offer will go way down, closer to the sales amount. Some publishers might not even want to take a chance on the next book. And yet both authors had the same earnings. The only difference is that Author B's publisher arbitrarily gave him a higher advance. 

So what's the take away from this? Should you say "No, thank you!" when a publisher makes you a big offer? Of course not! It's free money--are you crazy? What you need to understand is that a big advance does not automatically translate into big sales. Likewise, not being able to live up to your advance is not an indication of failure. On the flip side, a small advance need not feel like a failure, either. In other words, it's a numbers game and nothing more. The game may not always work in your favor, but it's not necessarily your fault. Don't use it to gauge your value as a writer.

No comments: