Promises, Promises

Ok, Promising Writers, this post is going to be a major buzzkill. So if you don't think you're in the mood for a reality check, then you may want to duck out now. But if you can handle it--and I think you can--it might be worth your while.

The purpose of this blog is to offer encouragement and advice, but I wouldn't be doing my job if I made everything about the publishing business seem peachy keen, now would I? Every now and again it's important to manage expectations. If you know what to expect, then you aren't so crushed when something unpleasant happens. And it will. It happens to everyone.

Getting published is incredibly exciting, especially for the first time. When I got my first gig as a ghostwriter I was so thrilled I could hardly sleep for weeks. Several years later I developed my own series (ON THE ROAD) that briefly captured the attention of a television production company. I ran on pure adrenaline for months. I count the day my agent sold my first literary adult novel to Simon & Schuster (THE GREATEST MAN IN CEDAR HOLE) as one of the best days of my life.

In the early stages of any deal, there's definitely a honeymoon period when everyone is swooning over your work. Editors and sales staff will praise you. If there is buzz about your manuscript, movie producers might come calling. There might be talk about media appearances, tours, promotions, contests, bestsellers' lists, on and on. It is so easy to be swept up in all the excitement--but don't. I'm sorry to say that much of what is promised or merely mentioned probably will not happen.

So many things can happen that appear to be a sure thing then just dry right up. I once thought I had a twelve book series sold that ended up being cut down to four due to a personnel change in the publishing house. I've been contacted by TV/movie producers who seemed very interested and then never contacted me again. I've heard many publicity campaigns that never came to fruition. One of my foreign publishers thought I might make the bestseller list in that country and my book tanked. I've been told, for sure, that my book was going to be featured in a magazine that virtually makes bestsellers, only to have it cut just before publication. My first big disappointment crushed me for a long time. When the last one happened, I celebrated my 'almost' victory by going out to dinner. I ordered a martini and toasted the magazine that nearly put my name on the literary map.

Cynics like to demonize publishers, but I've hardly encountered anyone in the business that I haven't liked. Nearly everyone I've met is professional, dedicated, and their love of books is very real. So is their excitement when they come upon a project they really love. They, too, can get carried away. They might want to give you all the resources they can to give your book a push, but corporate demands, budgets, and shifting priorities can get in the way. Things just happen. And the truth is, even the best editors really can't predict what will resonate with the public and become a bestseller. A lot of it is largely out of their hands.

So, how can you insulate yourself against disappointment?

Expect the Unexpected. Yes, things will go wrong. To you. To everyone. That's life.

Set Your Expectations Low. It's okay to get excited about potential good news--as long as you keep it in perspective. There's rarely a quick path to wealth and stardom.

Don't Count on Anything Until It's Signed, Sealed, Delivered. Your contract is not valid until it's signed by both parties. Consider any talk of publicity, celebrity blurbs, movie deals, etc. to be merely idle chit-chat until something is actually happening toward that goal. Even then, don't consider it real until it has actually happened. Seriously.

Don't Spend a Dime Until the Check Clears. Tattoo this one on your arm so you don't forget. I used to work in the accounting office of a literary agency and I can't tell you how many authors got themselves in a bind by spending money they didn't have. So what if you just signed a contract for $100,000 advance? It could take months for the publisher to cut you a check. Don't spend a dime until it's actually in your bank account.  And then, if you're really smart, you'll sock away a portion for taxes and save the rest until your manuscript is finished, delivered, and approved. Do you know what happens in that rare instance that the publisher doesn't like your finished work or that you fail to deliver it? You have to give the money back! Not so easy to do, once you've spent it.

Be Grateful. Even when things go wrong, be happy and humble about the things that do go right. Because they will. Many things will go right, things you would never expect. A bookseller might fall in love with your book and spread the word about it. You might win an award. A high-profile newspaper might give you a rave review. A town you've never heard of might choose your book as a community read and ask you to speak. You might become a celebrity in a foreign country.

Prepare yourself. Anything can happen. That's half the fun.

The Multi-Book Deal: Is It Worth It?

Just imagine: an editor is so in love with your work that he wants to not only buy your manuscript, but he wants your next book, too. And it hasn’t even been written yet. Ahhhh….this is the stuff that aspiring writers dream of –the multi-book deal. But are these deals all they’re cracked up to be? I’m not sure first-time authors understand all that they’re getting into with these deals, for better or worse. Here are some things to consider before you sign on the dotted line.

Money, Money, Money

One of the best things about multi-book deals is that you get a higher advance than if you sold just one book, right? Well, sort of. Publishers sometimes use the multi-book deal to buy two books at a discount. For example, if you sold only one book, they might pay $10,000, but instead they offer $15,000 for two. That’s only $7,500 each.

One way to look at this is to say that if you take the multi-book contract you are guaranteed $15,000—which is $5,000 above the hypothetical single book offer. If your first book ends up tanking, this might not be a bad deal. It might be hard finding a publisher who will pay you $5,000 the second time around.

On the other hand, what happens if your first book becomes a runaway bestseller? In the case of the multi-book contract, you’d be on the losing end of the deal to some extent. If you had signed a one-book contract and the book made millions, you’d be virtually guaranteed a huge advance for your second book. Alas, if you signed the two-book deal, your advance would remain the previously agreed-upon $7,500 and the terms would remain at the newbie author level, instead of reflecting your status as a bestseller. You can take some comfort, however, in knowing that you’ll be rolling in royalties.

Creative Accounting

Multi-book contracts are accounted for a little differently than one-book contracts. This can occasionally work to your advantage, though often it doesn’t. The first way it works against you is in the payout. For those of you who are new to the world of advances, it’s important to know that publishers do not pay your advance in one lump sum. Instead, it is divided into installments. Here’s a typical payment schedule for a $10,000 advance:

      $3,333 on signing of the contract (which is paid immediately)

      $3,333 on delivery & acceptance of the complete manuscript (several months down    the road)

      $3,334 on publication of the book (maybe a year or two later)

Now here’s the payment schedule for the two-book contract described above, with an advance of $15,000:

      $5,000 on signing of the contract

      $2,500 on delivery & acceptance of the complete manuscript of book #1

      $2,500 on publication of book #1

      $2,500 on the delivery & acceptance of the complete manuscript of book #2

      $2,500 on the publication of book #2

In this scenario, you’re getting slightly more on signing, but your payouts are smaller. Considering how long it takes to write and publish a book (let alone two), it could be several years before you see the final two payments.

Basketing

Another form of creative accounting in multi-book contracts has to do with royalties. Since the books were sold together they are accounted for together, which is called basketing. This means that all earnings are bundled together and treated as one unit.

For example, let’s say that your first book does well and you earn $8,500 in sales on your statement. If this was a single-book contract with an advance of $7,500, you would earn out your advance and be paid the excess $1,000 in royalties. In a multi-book deal, however, that extra $1,000 gets applied to the $7,500 advance for book two, instead. You will have to earn out the remaining $6,500 on that advance before you see a dime in royalties. As you can see, if you have a contract for many books it will take you damn near forever before you start to see some royalties.

You’re On the Clock

Before entering into a multi-book deal, it’s important to carefully and realistically examine the delivery schedule of your manuscripts. The publisher will want a deadline commitment and you’ll want to be sure you’re not getting in over your head. Committing to a schedule is a great motivator for many of us creative types and can work very well if you already have a completed outline or first draft of your next book. But if you don’t know what your next book is going to be, proceed with caution. Negotiate for as much time as possible. Beware that if you are unable to deliver your manuscript as promised, you may be asked to return that portion of the advance. Usually, by the time this happens, the money is long gone.

Job Security: The Good News and the Bad News

One of the best aspects of a multi-book deal is that you have the security of knowing when your publishing home is for the next several books. You’ll develop solid relationships within the company and you’ll have a chance to prove yourself if your first book isn’t a hit right out of the starting gate.

That’s the good news.

The bad news is you might hate your publisher. You might discover early on that you don’t click with your editor, there is too much politics, promises aren’t kept, your promotion is nil. In this case, you’re stuck through the next several books.

So Is a Multi-Book Deal Worth It?

That depends on you. If you’re a first-time author it’s hard to say no to any offer that comes your way. If you’re dealing with a good, solid publisher, then by all means take the deal—being aware of the pitfalls. Well-seasoned authors have greater options and the benefits are more likely to outweigh the risks. Either way, it’s important to thoroughly understand any contract before you sign.

Understanding Your Royalty Statement—Part II

As I mentioned before, royalty statements can be confusing to read, but it’s in your best interest to become familiar with them. In general, the larger the publishing house, the more confusing the statement. On the other hand, big publishing houses also give more information, which can be helpful. Because statements vary so much, you may or may not find some of the elements I’m about to discuss. Know that if you ever have any questions about your statement, your agent or editor will be happy to help you make sense of it.

Know Your Editions

Most books are published in several different forms, so you will often find separate listings for each edition of the book. For example, we’re all familiar with the hardcover and paperback editions. Did you know, however, that paperbacks are divided into two categories? There are the fancy, larger-sized, more literary-looking trade paperbacks and then there are the cheaper, drugstore variety mass market paperbacks. Most hardcover books become one or the other, unless you’re a mega-bestseller, in which case you might become both.

Other editions you might find on your statement are library editions, large-print, electronic, and audio books. Your publisher may or may not control the rights to these editions (look at your contract to know) so you may or not find them on your statement. If, for instance, your agent sold the audio rights to another company, you can expect to receive a separate statement from that company.

Check the Contract

When you receive your first royalty statement, it’s important to have your contract open and to compare the details with those on the statement. Is the pub date correct? Is the advance correct? Do they list the correct royalty payout (very important)? Is the retail price correct? If any of these numbers are off, it will affect your bottom line.

Units Vs. Earnings

Your sales are represented in two ways: units and earnings. Units are the number of books sold and earnings are your monetary share of those sales. For example, if you sell 100 books at $20 each and your royalty is 10% of sales, your earnings are $200 (100 x 20 x .10 = 200). Therefore, under the heading “Units” you’ll see 100 and under “Earnings” you’ll see $200.

On your first few statements, the number of units sold will be a pretty decent number. DON’T GET EXCITED JUST YET. Now is not the time buy a boat or head to the nearest watering hole and buy everyone a round of drinks. The units sold on your statement is actually the number of books purchased BY BOOKSTORES and not by consumers. For example, a Barnes & Noble might say, “Sure this looks like a good book—we’ll put five copies in each store.” This purchase is what you see on your statement. The catch is that if Barnes & Noble doesn’t sell those copies, they have the option of returning them to the publisher for a refund. This is why your publisher will occasional hold back a percentage of sales, called a “Reserve for Returns” until a certain amount of time has passed (more on this here). For the first several royalty statements, you’ll see all kinds of sales, and then after a few accounting periods have gone by the returns will kick in and you’ll start to see negative units (unless, of course, you’re Stephenie Meyer). It’s a discouraging sight, but take heart—it happens to most authors.

As far as earnings go, it’s important to remember that just because there were sales, it doesn’t mean you’ll be seeing a fat check anytime soon, due to that pesky thing called an advance. Advance is short terminology for “Advance Payment Against Royalties,” meaning you won’t see a penny of your royalties until you “earn back” your advance. Any amount above the advance is your true royalty. The nice thing about an advance though, is that you get the money up front and if you fail to earn enough to equal your advance (also known as “earning out”) you still get to keep it.

Be Aware of Escalations

Many contracts contain different royalty percentages, depending on sales. For example, the publisher might agree to pay you 10% of sales for the first 10,000 copies sold, 12% for the next 10,000, and 15% thereafter. This is called an escalation. If your contract contains an escalation, it is very important you pay attention to the number of units sold, and that the royalty percentages escalate properly.

Cumulative Units and Earnings

The cumulative columns are the most important part of your statement. This is where you’re going to find mistakes, if there are any. The cumulative columns show the total units sold to date and the total earnings to date.

This is where you need to do a little math. When you receive your second royalty statement, add the units sold with the units from the first statement and make sure it agrees with the cumulative units on the second statement. Do the same with the earnings. If you have an unearned balance from your advance, you’ll also want to subtract cumulative earnings from the initial advance to make sure the balance is correct. It sometimes helps to keep a small ledger of just statement dates and unearned balance amounts, since this is the most important number to know.

Next Time--The Multi-Book Contract: Is It Worth It?

Ghostwriting Part IV—Landing the Gig

Finally, after weeks and weeks of waiting, the envelope you’ve been waiting for has arrived. Maybe it’s a rejection letter. Being rejected from a teen series might carry with it an extra bit of sting—you know you’re capable of writing gorgeous prose and meaningful stories, so you might be tempted to throw up your hands in disgust and say, “What do they know? I can write a story a thousand times better than this junk.” Don’t let yourself become bitter. I assure you that the people working on these series are highly educated and are well-acquainted with good literature. What a rejection simply means is that you weren’t right for the part. As I mentioned before, hiring ghostwriters is a lot like finding actors for a movie. If you were a casting director, would you have given the role of Forrest Gump to Al Pacino? Probably not. Several years ago, I tried out for a series (after having thirteen teen novels under my belt, mind you) and was rejected. Even though I had a lot of experience, my writing was deemed not edgy enough. That was fine by me—I have no interest in being edgy.

Instead of a rejection, you might get a personal letter encouraging you to re-submit your sample or even try out for another series. This is what happened to me when I tried out for my first ghosting job. The editor thought I had potential, but my sample wasn’t quite up to par. I wasted no time finding out what my weaknesses were and re-submitted the sample within a week. As soon as she received the revised sample, I was hired on the spot.

Maybe you won’t be rejected at all the first time around and instead you'll get a call from the editor. Congratulations--they’d like to hire you to write for the series. You are thrilled—you’re also scared out of your mind. Take a deep breath, enjoy the moment…and brace yourself because you have a lot of work to do in a short period of time.

Before I get into the writing side of things in my next post, let’s cover the business side first. This will be one of the very few times you’ll hear me say this, but you don’t need an agent. That’s because work-for-hire contracts are pretty much set in stone. The pay scale and royalties (if there are any) are pre-determined. Series are run on tight budgets and there is little room, if any, for negotiation. Newbies are given a set price. If you like ghosting and want to do it regularly, my advice would be to write at least three books before asking for more money. At that point, if you proven yourself to be professional and indispensable, you should have no trouble getting bumped up to a higher advance. Other than that, there’s nothing else to negotiate that you can’t handle on your own. It’s generally a take-it-or-leave-it proposition.

When you accept your first work-for-hire job, you'll probably be offered a one-book contract. This is a good thing. It’s better not to be locked into anything the first time around, just in case you discover that ghosting isn’t right for you. After that, I would recommend not signing up for more than three books at a time, which equals about six months of work. You never know what might crop up in your personal or professional life, and it’s best not to be tied down for too long.

Upon receiving your contract, read it thoroughly. It will be short and straightforward. Pay attention to the word count required and mark the deadlines on your calendar. Series deadlines are critical. Imagine that the series is an escalator and the writers are the passengers. If someone suddenly stops at the bottom, everyone is in trouble. Ghosting is an opportunity to establish your reputation as a professional writer. Act accordingly.

Finally, put your advance check in the bank until your manuscript has been accepted. Work-for-hire agreements—especially your first—are more fickle than the average book deal. It’s better to hold onto the advance until you’re sure it’s going to work out than to scramble to return money you’ve already spent.

Understanding Your Book Contract -- Part II

Now that we have the general accounting out of the way, we can focus on the rights and responsibilities of the author. It’s really not as daunting as it sounds.

Examination of Publisher’s Books and Records (Auditing): This means the author has the right, under certain terms detailed in the contract, to audit the publisher's accounting records for errors. Pretty cool, huh? Most authors will rarely have a use for this, unless they are major bestsellers, or have a series of books, or there is a glaring error in their statements and the publisher disputes the numbers. The cost of the accounting is at the author’s expense, unless it is found that the publisher owes the author money and that discrepancy exceeds a certain percentage of total sales (5% is an example). Auditing is a bit of a gamble, but it can certainly pay off.

Failure to Deliver Manuscript/Delivery Extensions/Acceptance of Manuscript: If you submit a finished manuscript to the publisher, these clauses will not pertain to you. If, however, you submit an outline and a few chapters, you’ll need to pay close attention to this one. These clauses outline deadlines and the penalties if you fail to deliver your manuscript. Most publishers will be somewhat flexible if you need a deadline extension, providing you are acting in good faith. Authors who fail to deliver a satisfactory manuscript within the negotiated deadlines risk having to return all or a portion of the advance. This occurrence is infrequent but not unheard of, so it may not be wise to spend your advance before you’ve finished writing your book.

Correction of Proofs: Once you and your editor have whipped your manuscript into shape, the publisher will bind it into a cheap paperback called a galley. Galleys are sent out for publicity and review purposes. They also give you a chance to see the work in print before it goes out for final printing. You will have the opportunity to review the galley and make corrections. Usually, these corrections are superficial (i.e. typos), but if a sentence or word choice really bugs you here and there, you can do a light edit. Heavy edits, however, are going to cost you. If you decide you want to change more than a certain percentage of the manuscript (15% is an example), most publishers will charge you for the cost of making those changes.

Publication: This clause specifies the timeframe in which the publisher is required to publish the book from the date of signature. It is usually 18 months.

Author’s Agent: List the agent(s) acting on your behalf and the percentage they are to receive. Fifteen percent is standard; for foreign sales, usually your domestic agent will receive 10% and your foreign agent will receive 10%.

Author’s Warranties: By signing this agreement, you are stating that you are the sole author of the work (unless, of course, it is known that you have a writing partner), that you have the right to sell the work, that this work has not been previously published, that the work does not libel anyone, and does not break any laws.

Indemnity: This is where we hit the real legalese—the clause pertaining to what will happen if you or the publisher is sued because of the book. The terms and scenarios are quite varied here and frankly, I don’t have the patience to sort any of it out. Consult your agent on this one.

Free Copies: Yahoo! As the author, you are entitled to free copies of the book. Twenty-five copies is a common amount—not enough for all the people that will be begging you for a copy, but a good number. If you have a contract with a German publisher and don’t speak German, you’ll find this amount to be more than sufficient—in fact, a hindrance. Feel free to ask for more or less. It’s probably one of the easiest clauses to change. This clause also states the discount rate given to you if you’d like to purchase additional books on your own—50% is standard.

And this concludes our brief contract overview. Remember, this is meant only as a basic guide and your terms may vary, but I hope it was helpful.

Understanding Your Contract -- Part I

I thought it might be helpful to give a brief overview of that most intimidating of documents--the twenty-page book contract. It’s been ten years since I’ve worked with author contracts, so please take my info as guide and not gospel; that being said, the publishing industry is old and slow to change. Most of what I knew then should still be relevant today.

The first thing you need to know is that you will be given a standard contract with just a few variables thrown in. Ninety-five percent of the contract will apply to you as it applies to everyone else. This contract has been carefully hammered out over the years by attorneys, agents, and publishers alike, and is relatively fair to all involved. There are sections that protect the publisher and sections that protect the author. There is no reason to approach a contract from a reputable publishing house with undue paranoia. At the same time, it is imperative that you and your agent review the contract thoroughly. If there is something you don’t like in the there, negotiate a change. I’ve rarely encountered a contract that didn’t have a clause or two axed or amended.

Here’s a brief overview of the major clauses in an average contract:

Grant and Territory: This describes how long the contract will be in effect, where the publisher will publish the book, and in what language. Exclusive world rights, for example, means the publisher can print the book in any language and sell it anywhere in the world. If you live in the US and your contract says "exclusive publication in the English language in the United States", that means you will able to sell your book to any number of foreign publishers—which means more opportunities to make money.

Subsidiary Rights: Sub-rights cover a whole host of things from motion picture rights, to Braille editions, to e-books, etc. There is also something called “first serial rights” and “second serial rights”. First serial rights are when a magazine publishes a portion of your novel before its release; second serial rights are when it’s published after. Sub-rights are side deals made with other companies, and the advances paid out are often split between the author and the publisher, 50/50, though first serial rights are usually split 90% to the author and 10% to the publisher.

Advance: This is the amount of money the publisher has agreed to pay you for the manuscript. The advance is rarely paid out all at once, and is commonly paid out in thirds. For example, if your advance is $1,500, it will usually state that $500 is to be paid out upon signing of the contract, another $500 is to be paid out when you deliver the final manuscript to the publisher, and the final third will paid out upon publication of the work.

Royalties: Here is where you’ll find the details of what percentage you’ll be paid for each book sold. Usually there is an escalation, which means the royalty rate increases with the number of books sold. Here are some typical royalty rates and escalations:

Hardcover:

10% for the first 5,000 copies
12 ½% for the next 5,000 copies
15% on all copies sold thereafter

Trade Paperback (fancy, larger paperback)

7 ½ % for all copies sold

Mass-Market (cheaper, supermarket paperback)

8% for the first 150,000 copies sold
10% on all copies thereafter

Reserve For Returns: In order to understand the reserve for returns, you first have to know a little bit about how bookstores purchase books. Initially, they put in an order—for the sake of argument, let’s say 100 copies. On your royalty statement, these 100 books will show as sold. Unfortunately, the bookstore might only sell 50 copies. After some time has passed, the bookstore then has the option of returning the unsold books to the publisher for a refund. So even if your royalty statement shows 100 sold, in reality only 50 books were sold.

To plan for eventual returns, the publisher picks an arbitrary percentage called the reserve for returns. Twenty-percent is common. This means that if your royalty statement says you should be paid for 100 copies sold, they have the right to withhold 20% of the payment in reserve on the chance that some of them might be returned. After a pre-determined amount of time has passed, the publisher will then release the reserve, meaning that 20% may now be accounted for. (Note: The reserve for returns is a frequent sticking point for authors. A 20% return, in my opinion, is fair, but something in the range of 40-50% is excessive. Also, any author would do well to monitor their royalty statements, to make sure the reserve is released at the agreed time.)

On my next post, I’ll cover clauses related to production, as well as an author’s responsibility and rights.