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Money


I wrote this post about a month ago, but didn't put it up because I kept tinkering with it. What reminded me to finally post it is the email I just received asking, "How much does being an author pay, anyway?" While I'm not comfortable sharing specific details about my writing income (suffice it to say I still have a job outside writing to support my bills), I am fine with speaking in generalities.

Money is something a lot of authors don't talk about. There's a good reason for their silence - money is a touchy subject. If an author gives a public "whoo-hoo!" about the money he/she has gotten from writing, it can often be perceived as tasteless bragging. If an author gives a public lament about money he/she's gotten from writing (as compared to their bills, perhaps) it's often perceived as ungrateful complaining. So, as an author, it's sometimes best just not to talk about it.

But since there are a lot of questions about money in publishing, I'm going to broach the subject objectively, because money in publishing is a valid discussion topic. Note: I don't claim to know everything about the subject. Far from it. I'm only posting on what I've found out based on my own limited experience, and the experiences from friends or acquaintances in the publishing industry. 

If you don't want to hear about the different breakdowns of money in publishing, then move along, nothing to see here :)

Caution, this is a LONG post.  

 

There are two myths that I frequently come across on blogs, at conferences, or in other places where writers chat and the subject of money is brought up.

Myth # 1: If you're a writer published in print by a large NY-based house, then you're making a lot of money. Or, at least, you've living off your writing income and you've quit your day job.

Nine times out of ten, this is false. Now, I'm not talking about established authors with solid careers and several books out, because a lot of them can and do support themselves writing, but this is more geared toward the New Author. Got it? New author.

The average advance for a new author for a first book is $5,000.00. Out of that, most authors who sell to these larger NY publishers have an agent, so there goes 15% commission right off the top. Then, as an author, you're expected to get a website right away. Average cost of a website, if you're not technically-inclined yourself, is $1,000.00 (and can go way up from there). Then, you're encouraged to either attend a conference to spread your name/your book's title around, or do a mailing. Prices on those vary, but out of the conventions I've attended, between the convention fee, hotel fee, airfare, car rental, and food/drink/books I've bought while there, it's rarely been less than a thousand dollars each time (RT and RWA charge $500.00 just in convention fees, for exp).

So, what do you have left over? Not much (if anything), and then you have to factor in paying taxes on the gross of your writing advance, too. Plus, if you're intending to write full time, and you don't have a spouse with health care coverage, then you're paying out of that advance for your own health care, too, which I don't need to tell anyone, can be very expensive.

But once your book comes out and it starts selling, you're getting the big bucks then, right?

Not so fast.

First, your publisher pays themselves back all of the advance they gave you. Let's say you're published in mass market paperback format, and your contract reads that you get an 8% royalty on the negotiated sale price of each book (let's use what my mass market books go for at normal price, which is $6.99 per book, but book prices and royalty percentages vary, plus if you're published in hardcover or trade paperback, there's a lot more variance. So these examples are for mass-market novels only). At the $6.99 sale price with an 8% royalty rate, that means an author gets around $.55 (yep, that's 55 cents) for every book that is sold. To pay back an average new author advance of $5,000.00, that author would have to sell over nine thousand copies before he or she even begins to earn another dime in royalties on their book.

Now, that doesn't sound too bad, though. Most new author print runs from large NY houses are at least ten thousand copies, so those houses expect to sell that many books. And some initial print runs are far larger, which means the publisher expects to sell many more books than would cover an initial advance of $5,000.00.

But there are catches.

Publishers tally their book sales only twice a year. The first term runs from January 1st through June 30, and the second term runs from July 1st through December 31st. So, if your book comes out just a month or two before that term closes, then your first royalty statement will only account for the sales from your release date up to June 30th or December 31st, whichever date is first after your book's release. Sales numbers won't be tallied again on your books for another six months, and it takes publishers about two months from the cutoff dates of June 30th/December 31st to get those numbers to your agent or you, the author. The closer your book release falls to the publisher cut-off date, the less likelihood that you will have "earned out" your advance when you receive your first royalty statement.

Let's say that hallelujah, you're one of the authors whose book came out several months before the cut-off date, or came out really well and book stores were ordering your entire print run for their stock from your publisher. You'd think you'd be getting a check with that first royalty statement, wouldn't you? Yet there are three words in publishing every mass-market author knows and loathes: reserves against returns.

What does "reserves against returns" mean?

It means that even if your entire print run has been shipped to book sellers, and you've sold a good number of books, your publisher isn't sure how many of your books will be returned to them unsold. So, they hold back a percentage of your royalties to cover their liability if in a few months, or up to a year, usually, a large number of your books come back unsold. What's this percentage? Anywhere from 30% to 60% of your royalties, depending on how close to the term's end your book came out, what genre you're in, whether this is your first book, how well similar books like yours have been selling or being returned, etc. There's a formula - don't ask me what it is - but there's a formula publishers use to determine how high of a percentage they will hold back.

So, your publisher holds 30-60% of your shipped/sold books as reserve against returns, then deducts your advance from the remainder of the money. Those reserves against returns don't get released until at least the next royalty period, either, which, as you know now, is six months away (plus two months processing time). Some publishers hold it longer than one royalty period, so it could be over a year before you see any of the money that your book made before the closing of the first royalty period. Do publishers pay you interest on that money, if it turns out less of it was needed to be held? Nope. (Note: this is not a complaint against publishers. Publishers assume all the risk and all the costs when they put out a novel, and if an author doesn't sell through their advance, the publisher takes the loss. It's not like the author has to return any of their advance money to the publisher if a book doesn't sell as expected.)

Now, if you've gotten a multi-book deal, you could get more money in the interim when your publisher accepts the second or third book in your contract. Usually, contracts are set up where X-amount of money is paid on signing, and the remainder on acceptance of any subsequent books (this can vary, so I'm speaking only in general terms). Therefore, as you wait for that first royalty statement to actually have some dollars attached to it, you can still receive money on the remaining books in your contract once your publisher has deemed them acceptable (which means, you've gone through and made any revisions your editor required, and now your book is heading to the print-ready stage). But again, this takes time. If your publisher has decided to put out one book a year with you, for example, then that extra remaining advance money will probably just get sent to you once a year as you fulfil the terms of your contract.

It's true, some new authors are very fortunate by receiving large-enough advances on their first book(s) to be able to quit their day job and take that advance to cover their bills for about the next two years (before you scream, "Two years?!", remember, it takes an average of a year from getting a contract signed to having a book on the shelves. Sometimes up to two years. Then, an author will probably have wait another year - until their second royalty statement - before they get any money from sales of that first book. Maybe more, if the advance was big, because the more a publisher pays you up front, the more you have to pay them back before you earn any royalties).

So, even with a contract from a large NY house, and even if it's a multi-book contract, most authors still can't afford to quit their day jobs right away. Again, there are exceptions to that rule, but there's a reason why something is called a "rule" in the first place. It because that's what generally happens.

Therefore, to all the people I've seen on blogs or in other places saying things like, "I'm going to hold off getting a job until I see whether or not an agent signs me," I say to them, get the job. It takes time to find an agent. Then, the average length of time to sell a book by a new author is a year. Then, it takes a couple more months from the time a deal is agreed on until the time an author gets their first advance check (are you noticing a trend?? Publishing is SLOW).

But if that author is one of the extremely lucky ones who gets an agent right away, gets a sale right away, and gets a huge advance, then by all means, quit the day job and many congrats to him or her! Most of the time, though, authors need another source of income to support themselves while they wait for their books to earn out their advance, get past their "reserves against returns", and have that royalty statement with a check attached to it finally hit their mailboxes. Then, authors repeat the same waiting process for the next book. Which is why a lot of authors don't quit their day jobs until they've had a least a couple books sell well enough to receive regular royalty payments on them, and with more contracted books in the works, too. 

Myth # 2: You'll never make ANY money as an author.

Despite those who may have thought this is what my first response was saying, there still IS realistic hope for supporting yourself as an author. I've heard some fairly emphatic statements by people saying that seeking a career as an author is akin to taking the fast lane to Broke-ville, so don't pursue a writing career, because nothing but poverty and disappointment await.

I disagree. While trying to get a book published should never be someone's idea of a get-rich-quick scenario, publishers are still looking for authors. They're still willing to take chances on unknowns, too, and in rare but notable cases, they will shell out some pretty impressive bucks on a first book. It does happen. If you don't believe me, check out Publishers Marketplace and look up the deals posted there. Even if a book isn't sold for a huge advance, there are still pretty respectable advances given on a regular basis for well above the average new book advance of $5,000.00. So some authors will have significant amounts of time shaved off their wait to receive financial stability from writing.

Also, as an author, you can sell books in one genre, and then also sell another books in another genre (contract restrictions may apply). There are quite a few authors with books/series' being published in different genres at the same time. So, even though that makes an author twice as busy, that author is also getting twice the number of initial advances, twice the remaining advances on book acceptances, and in the future, royalties from two sets of book contracts versus one. Needless to say, this doubling-down with genres can have a big impact on the author's ability to support themselves financially by writing.

Then, if your contract was for English-speaking rights only, some authors can also have foreign rights purchased on their novels. This is where other countries buy the right to translate and sell a novel in another language/country. Advances are paid to the author for these foreign rights, and if an author sells in multiple countries, at times, the foreign rights advances can equate to more than the initial publication contract. If an author sells through their foreign rights advance, a royalty percentage is then calculated as well.

Other sales after the initial sale of a book can include film rights and audio rights, if a publisher did not buy an all-encompassing rights when they first acquired the novel. If a book becomes a huge hit and films are made from it, merchandising may earn money for the author as well.

Most of the time, as I stated in long detail above, authors do have to work their way through a few books and a few years before they start to really see the fruits of their labors. Still, there are still plenty of authors who do reach the point where they can say buh-bye, Day Job, and support themselves by writing. Plus, once an author does have their book sell through their initial advance/reserves against returns, then every copy sold thereafter becomes residual income for the author (unless/until a book goes out of print). So, an initial sale for a book might not be the end of the advances for that book, in some cases (again, contract clauses vary).

Yes, there is still career potential in publishing. It's slow, it's hard, and it's uncertain, but it does exist. There are many authors supporting themselves by writing to prove it. I think aspiring authors should have cautious optimism when it comes to the topic of money. Don't expect a windfall of cash right away, because that's just not realistic, but with luck, hard work, and time, the dream of living off your writing income could become your reality.

For all those authors at that point, congratulations, whether you came by it from an unusually big initial advance, or from waiting until your career built to that level several books later, or some other writing-related circumstance. It's worth a hat-toss in the air any way you slice it, in my opinion. And whichever stage of the publishing career you're at, authors, keep those books coming! How boring would life be without good books to read, right? 

Aspiring authors, keep trying! Every successful, full-time author first started out as an aspiring one :)

Comments

( 53 comments — Leave a comment )
wldhrsjen3
Jun. 24th, 2008 03:00 pm (UTC)
Great post! Thanks for the information. It's sobering, but I also find it incredibly motivating. :)
frost_light
Jun. 27th, 2008 07:34 pm (UTC)
Thanks! This falls under the heading of "things I wish I knew when I first started writing" :)
sanguinepen
Jun. 24th, 2008 03:05 pm (UTC)
Thanks for writing all this up Jeaniene. I'm showing it to my mom who has visions of grandeur floating in her head about me getting rich over night. Gotta love the mom support though.
frost_light
Jun. 27th, 2008 07:35 pm (UTC)
Yes, gotta be glad for the moms. Mine is my biggest fan - and she doesn't even like supernatural stuff, lol.
(no subject) - sanguinepen - Jun. 27th, 2008 07:40 pm (UTC) - Expand
tybalt_quin
Jun. 24th, 2008 03:13 pm (UTC)
Good post.

If I may add a point from a UK point of view (and speaking as someone who has a high paying day job and no publishing contract yet - so take it for what it's worth), if you want to think about how much money you'll make from writing, then you need to factor in tax on earnings when you write and work in the days.

I'm a higher rate tax payer (i.e. I earn over the 33k threshold and pay 40% taxes on that revenue over 33k). My employer deducts my tax and National Insurance (for non-Brits, your health insurance, social security and state pension) from my day job under a tax code assigned to me by the Inland Revenue.

Any income I earn from writing will be on top of my salary and will have to be declared to the Inland Revenue under a self assessment form. These things are a NIGHTMARE of bureaucratic gobblygook that basically make you give details not only of the additional income, but also relevant expenses incurred pursuant to that additional income (to the extent allowable), tax taken on bank accounts (including savings acccounts) and a host of other personal information.

Assuming I get the UK average YA advance of 5000 quid split between two payments, I'll lost 40% of EACH batch of 2500 to the Inland Revenue. I will then lose 40% of whatever royalties I receive each year. And all the time, I will be incurring the expenses that you set out as I try to get my writing career up and started, effectively subsidised by my day job.

Having taken the precaution of chatting about it with an accountant (because a girl can dream of just writing for a living), I will probably be worse off financially by having a day job and writing on the side, than I would be if I never sold a book or made any money from writing.

I would certainly need to be making more money than most authors get from publishing in order for me to consider giving up the day job and focusing on it.

And I haven't even begun to consider the effect of international sales/translation rights on the above, all of which will also be diminished by Her Majesty's tax people.

So my point is that if you're in the UK, there will come a point when you need to think through the implications of writing for a living and the extent to which it is compatible with what you actually do for a living.

[/hijack]
frost_light
Jun. 27th, 2008 07:36 pm (UTC)
I can't even imagine all the intricacies of publishing outside the US. The only thing I've heard is that in Ireland, writers don't have to pay income tax *ponders moving*.
(no subject) - tybalt_quin - Jun. 28th, 2008 10:52 am (UTC) - Expand
dmoonfire
Jun. 24th, 2008 03:23 pm (UTC)
That's pretty much what I've experienced myself. Very nice to see it written out in print though. Thank you and it reminds me why I write, but I decided to take the wandering path.

As speaking for the two genre thing: it is a killer. I've been doing that for a few years now, and it is really hard to keep up, since you end up burning out twice as fast (and only one of them is actually published at this point).
frost_light
Jun. 27th, 2008 07:39 pm (UTC)
Burn out would be a definite factor. I don't see doing two series' at the same time unless I'd be writing full time, because I'm not the best multi-tasker. Between writing new books for my current contract, revising them, the yearly anthology story, blogging here and on MySpace, doing other promotional stuff, day job, and not totally ignoring my husband/family, my free time's already limited.
mroctober
Jun. 24th, 2008 03:29 pm (UTC)
Nicely worded.
frost_light
Jun. 27th, 2008 07:40 pm (UTC)
Thank you.
robinellen
Jun. 24th, 2008 03:30 pm (UTC)
Good info to have -- thanks for sharing :)
frost_light
Jun. 27th, 2008 07:40 pm (UTC)
Glad it was helpful!
katiebabs
Jun. 24th, 2008 04:19 pm (UTC)
WOW
If I became an author I would do it for the love. Wouldn't mind making millions, but as long as I could walk into a bookstore and see one of my books there, my dream has come true.
And then I can think, wow I made a big $5 this week on sales! :P
Again, I am in awe of those who keep writing.
frost_light
Jun. 27th, 2008 07:42 pm (UTC)
Re: WOW
"If I became an author I would do it for the love."

That is the only reason I'd recommend ANYone trying for a career in publishing. Sure, yes, if it all works out, you can make a living from it. Sometimes a very good living. But if you don't love writing, all the stuff you have to go through before making that living wouldn't be worth it, IMO. If you love it, though, then it's always worth it.
del_kaidin
Jun. 24th, 2008 04:24 pm (UTC)
Thanks for this! It was nothing I hadn't learned from a lot of research but it definitely condences the information. Still trying for that first contract myself... don't expect for writing to make me wealthy, but getting a paycheck - no matter how small - from something I've always done for fun is really appealing.
frost_light
Jun. 27th, 2008 07:43 pm (UTC)
See, I hadn't known any of this in advance, lol. You get the gold star for researching *before* plunging into a field :).
cmerun12
Jun. 24th, 2008 05:03 pm (UTC)
Wow. Not being a writer - at least of this sort of magnitude, I never really gave it much consideration how authors earn their money. It's a sobering look at an often romanticized profession.
frost_light
Jun. 27th, 2008 07:44 pm (UTC)
It still is a great profession, don't get me wrong. It's just that it's also a slowwww profession when it comes to income stability. Ah, well. Life is more exciting that way, right? *laughs*
wandereringray
Jun. 24th, 2008 05:20 pm (UTC)
Thanks Jeaniene! That was awesomely informative. :D

Yeah, hubby and I talked (and planned) for a year before I quit my job so I could write full-time. Plus there were extenuating circumstances in the job (I would probably have stayed if they hadn't been there).
frost_light
Jun. 27th, 2008 07:45 pm (UTC)
Glad the post was helpful. Planning ahead = smart :)
almond_tiger
Jun. 24th, 2008 06:51 pm (UTC)
Great info! Thanks for making it very clear.
frost_light
Jun. 27th, 2008 07:45 pm (UTC)
Thanks! I'm glad it made sense.
niamhaevalnimue
Jun. 24th, 2008 10:05 pm (UTC)
wow. so much I didn't know. But it all makes sense. thanks!
frost_light
Jun. 27th, 2008 07:46 pm (UTC)
Glad it shed a little light. I'm standing on the shoulders of people who've blogged before me about the same topic, though.
ritamalone
Jun. 25th, 2008 12:31 am (UTC)
thanks so much for the post and the information. It helps alot
frost_light
Jun. 27th, 2008 07:46 pm (UTC)
Thanks, glad to hear that!
winkingoutloud
Jun. 25th, 2008 02:51 pm (UTC)
Thank you!
Got here from Smart Bitches, and wanted to say, thank you so much for doing this. I'll definitely be printing this out and saving it.
frost_light
Jun. 27th, 2008 07:47 pm (UTC)
Re: Thank you!
Hey, you're the reason I found out SB linked me, so thanks for dropping a comment! I feel so special that I've been "Bitched" :D
rkvincent
Jun. 25th, 2008 02:58 pm (UTC)
Well said. I've linked. ;-)
frost_light
Jun. 27th, 2008 07:47 pm (UTC)
Thank you, ma'am!
danne_cole
Jun. 25th, 2008 06:34 pm (UTC)
nice
Just what I have always wanted to know! That was a really great post. Thank you for taking the time to put it out there. :)
frost_light
Jun. 27th, 2008 07:48 pm (UTC)
Re: nice
Glad it was coherent. I was hoping people wouldn't have a big "WTF??" reaction to it :)
ex_kaz_maho
Jun. 25th, 2008 07:15 pm (UTC)
What a wonderful post - thank you so much!! I'm going to save this and read it often. ;) Seriously, it's very generous of you to share such great information.
frost_light
Jun. 27th, 2008 07:48 pm (UTC)
Thanks, and congrats again on your news!
(no subject) - ex_kaz_maho - Jun. 27th, 2008 08:00 pm (UTC) - Expand
thewylddream
Jun. 26th, 2008 09:59 am (UTC)
I have read many author blogs, and have many "successful" author friends in real life and none have explained the intricacies of the reality of being a published author as well as this post. Thank you for sharing the harsh truth.
frost_light
Jun. 27th, 2008 07:49 pm (UTC)
You're welcome, but hopefully the truth doesn't come across as so harsh. It's not all bleakness. It just takes time.
fearismyenemy
Jun. 26th, 2008 11:22 am (UTC)
Thank you for the informative post. I've always wondered how the fees for writing a book were broken down, and now that you've cleared it up I have an even greater appreciation for the hard work that authors put into their books. Thank you again for your candor on the subject. I love your books and hope your success as a author goes form strength to strength.
frost_light
Jun. 27th, 2008 07:50 pm (UTC)
Thanks. Glad you like the books. I hope things continue to go well, too!
kelly_gay
Jun. 27th, 2008 02:49 pm (UTC)
I'm learning the reality of all this first hand. Great post. I'm gonna link this on my blog as I know a bunch of folks will find it helpful. There's a lot you've given me to consider when I look at the future and planning my career. Thanks! :)
frost_light
Jun. 27th, 2008 07:52 pm (UTC)
It was meant to give people a good idea of what to plan for when they contemplate the "should I or shouldn't I quit my day job/delay getting a job?" when it comes to that first writing contract. A lot of this I didn't know when I first got a writing deal, so, thought passing along what I'd found out might be helpful to someone else.
wologal
Jun. 27th, 2008 09:49 pm (UTC)
Like to chime in here with a big thank you as well! Always nice to know the realities of the situation.
frost_light
Jul. 3rd, 2008 10:54 pm (UTC)
Glad it was of use :)
darkmagiciangrl
Jul. 2nd, 2008 09:23 pm (UTC)
Thank you soo much for this. I've wanted to be an author since first grade, but the money is flat out the scariest part about it. It's nice to actually have some facts on how things work. It's interesting, to say the least. Surprisingly enough it makes me want to go write more. lol <3
frost_light
Jul. 3rd, 2008 10:55 pm (UTC)
"Surprisingly enough it makes me want to go write more."

Good, because I wasn't trying to be discouraging. Just practical about the money authors can expect on average at first.
marybethkelsey
Jul. 3rd, 2008 04:20 pm (UTC)
Love this post! Many thanks. And nice to meet you. I'm Marybeth, btw, and just friended you. :)
frost_light
Jul. 3rd, 2008 10:55 pm (UTC)
Hi Mary Beth, nice to meet you, too! And thanks for friending me :).
daydreammuse
Jul. 5th, 2008 07:55 am (UTC)
Oh, wow Jeaniene. You certainly rocked my world with this oen and gave me the new zest to battle day job fatigue (six days a week 10 hours a day) and finish thtanovel, which by teh way is near the end. From there on it's revision time.

Of course brilliant post. Have you ever felt the need to experiment in a different genre apart from urban fantasy?
frost_light
Jul. 10th, 2008 03:40 pm (UTC)
"and finish that novel, which by teh way is near the end"

Congrats, and keep at it!

"Have you ever felt the need to experiment in a different genre apart from urban fantasy?"

Well, I'm currently straddling two genres: urban fantasy and paranormal romance. I like to combine them and say I write urban fantasy romance, since that seems a more complete explanation to me :). But I'd love to write horror one day too, in addition to urban fantasy romance. Horror is a long-time love of mine, and IMO, some really awesome character developments gets overlooked in horror by unknowing readers thinking it must be all meaningless splatter fiction.
(no subject) - daydreammuse - Jul. 11th, 2008 06:42 am (UTC) - Expand
(Deleted comment)
frost_light
Jul. 10th, 2008 03:41 pm (UTC)
Hi thanks so much! Glad you liked the books. I have so much fun writing them, as series with recurring characters are my favorite to read, so no wonder I'd want to do the same as a writer :).
( 53 comments — Leave a comment )