Avance Money?


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  1. #1
    Member Chris Stevenson's Avatar
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    Avance Money?


    Certainly, your best advance deal would come from one of the imprints owned by the Big Five corps or houses. Although a great deal could come from a well-known independent like Kensington and others. (Disregard Publisher’s Market Place definitions for a moment) I would consider a substantial deal, or something I was very happy with, as an advance of five figures and over. I would not scoff at $2,000 to $5,000, provided they had reputable distribution for bookstore placement and library inclusion. And, department store and book club sales would be icing on the cake. A participating marketing team and publicity manager is always a plus, and automatically provided by the big guys. These larger houses also have a foreign rights team and go after those huge overseas markets.

    In the prehistoric past, I asked Ray Bradbury, Alan Dean Foster and Poul Anderson the same question: "What's the best way to go; high advance, or no advance with higher royalties?" They were unanimous (and our own James D. McDonald will tell you the same thing): "fight for the highest advance because it's more than likely it will be all you will ever get." So, if the advance is high and the book doesn't earn out, you're in fairly good shape. The publishers may not be in very good shape but that depends. I just had that happen to me recently. The money was good but the book is a snail in sales. I don’t think I’ll ever earn out and I’ve done everything humanly possible to promote the title. Remember that you are the one who spent months, maybe years sweating and toiling over that book, possibly costing you some money to bring it up to high publishing standards.


    Now, if your earn-out is fairly close to your advance payment, the publisher can/will make money. It also depends on the book—Manufacturing costs (for paper), editing, cover art and maybe shipping, might determine a break point outlay for the publisher until they make a profit. If sales are really dismal, it is possible that the publisher may lose some money, or maybe a lot.


    About small press: It’s highly unlikely that you will get an advance from a small or independent press. They just don’t have the budget for it. There are exceptions—an agent can work a contract and obtain, at the very least, a token advance payment. What’s the typical advance range for a small publisher? This is also subjective, but climbing out on a wobbly limb that may break, I’ll say I’ve seen $50 to $1000. The sweet spot seems to be about $100 to $200, judging solely by the deals I and my agent have tried to wrangle in the past. If the small press has legitimate distribution like Perseus, IPG or Midpoint, there is a higher probability that they may cut loose with a small advance. It’s not a guarantee, it’s just more likely.

    To paraphrase: Go to the publisher (with agent or not) with a knife in one hand and a money bag in the other. Don't settle on a boilerplate contract—they are not written in your favor. Never be overwhelmed and giddy with the prospect of publication and sign a contract in haste and then swoon ohhhhhh...mighty God, it's Random House, or Tor, or Baen!

    Never, ever be afraid to stand up for yourself and play hardball. State your wishes to your agent, if you have one. The juggernaut publishers have heard it all before--they are professional negotiators--they do not flinch. If they say no, you backtrack a bit and start over. Take your time. They will never say that your demands are unreasonable and that they've changed their mind about giving you print (small press has been known to do this, BTW). The largest publishers come from a place of power--you don't. That means you upscale your importance and worth. They will actually respect that attitude. Besides the talent, it means they have a serious business partner on their team. Business...sound familiar? That's what publishing is first and foremost.

    Back in my day, the (stated rumor) average advance was about $5000. King got $2,500. Anne rice pulled an astonishing $12,000. So you can see the amounts can vary wildly, even today, depending upon the expectations of sales and the budget of the house. But we all thought that five grand was pretty cool back then. Anything over that, damn, we were rich and bragged it up! Takin' about the 1970s here.

    Advances today? I'm going out again on that long limb that might break, but I'd say that $7,500 is a common, general average for most categories and genres from the advance-paying Big 5. Marketing has more say-so about this upfront money than any division of the publishing company. And never forget the importance of rights sales; they can often top out over everything, but it might take a little time. Case in point; Jo Rowling's reprint rights to America were $105,000, where her Bloomsbury advance was $1,275 pounds. King's paperback rights went for $400,000, giving him a 50/50 split. These are examples of big houses, big deals and what it could me to you.


    Happy hunting.
    Blog: Guerilla Warfare For Writers:Hidden Content

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  2. #2

    I would Agree

    Quote Originally Posted by Chris Stevenson View Post

    Certainly, your best advance deal would come from one of the imprints owned by the Big Five corps or houses. Although a great deal could come from a well-known independent like Kensington and others. (Disregard Publisher’s Market Place definitions for a moment) I would consider a substantial deal, or something I was very happy with, as an advance of five figures and over. I would not scoff at $2,000 to $5,000, provided they had reputable distribution for bookstore placement and library inclusion. And, department store and book club sales would be icing on the cake. A participating marketing team and publicity manager is always a plus, and automatically provided by the big guys. These larger houses also have a foreign rights team and go after those huge overseas markets.

    In the prehistoric past, I asked Ray Bradbury, Alan Dean Foster and Poul Anderson the same question: "What's the best way to go; high advance, or no advance with higher royalties?" They were unanimous (and our own James D. McDonald will tell you the same thing): "fight for the highest advance because it's more than likely it will be all you will ever get." So, if the advance is high and the book doesn't earn out, you're in fairly good shape. The publishers may not be in very good shape but that depends. I just had that happen to me recently. The money was good but the book is a snail in sales. I don’t think I’ll ever earn out and I’ve done everything humanly possible to promote the title. Remember that you are the one who spent months, maybe years sweating and toiling over that book, possibly costing you some money to bring it up to high publishing standards.


    Now, if your earn-out is fairly close to your advance payment, the publisher can/will make money. It also depends on the book—Manufacturing costs (for paper), editing, cover art and maybe shipping, might determine a break point outlay for the publisher until they make a profit. If sales are really dismal, it is possible that the publisher may lose some money, or maybe a lot.


    About small press: It’s highly unlikely that you will get an advance from a small or independent press. They just don’t have the budget for it. There are exceptions—an agent can work a contract and obtain, at the very least, a token advance payment. What’s the typical advance range for a small publisher? This is also subjective, but climbing out on a wobbly limb that may break, I’ll say I’ve seen $50 to $1000. The sweet spot seems to be about $100 to $200, judging solely by the deals I and my agent have tried to wrangle in the past. If the small press has legitimate distribution like Perseus, IPG or Midpoint, there is a higher probability that they may cut loose with a small advance. It’s not a guarantee, it’s just more likely.

    To paraphrase: Go to the publisher (with agent or not) with a knife in one hand and a money bag in the other. Don't settle on a boilerplate contract—they are not written in your favor. Never be overwhelmed and giddy with the prospect of publication and sign a contract in haste and then swoon ohhhhhh...mighty God, it's Random House, or Tor, or Baen!

    Never, ever be afraid to stand up for yourself and play hardball. State your wishes to your agent, if you have one. The juggernaut publishers have heard it all before--they are professional negotiators--they do not flinch. If they say no, you backtrack a bit and start over. Take your time. They will never say that your demands are unreasonable and that they've changed their mind about giving you print (small press has been known to do this, BTW). The largest publishers come from a place of power--you don't. That means you upscale your importance and worth. They will actually respect that attitude. Besides the talent, it means they have a serious business partner on their team. Business...sound familiar? That's what publishing is first and foremost.

    Back in my day, the (stated rumor) average advance was about $5000. King got $2,500. Anne rice pulled an astonishing $12,000. So you can see the amounts can vary wildly, even today, depending upon the expectations of sales and the budget of the house. But we all thought that five grand was pretty cool back then. Anything over that, damn, we were rich and bragged it up! Takin' about the 1970s here.

    Advances today? I'm going out again on that long limb that might break, but I'd say that $7,500 is a common, general average for most categories and genres from the advance-paying Big 5. Marketing has more say-so about this upfront money than any division of the publishing company. And never forget the importance of rights sales; they can often top out over everything, but it might take a little time. Case in point; Jo Rowling's reprint rights to America were $105,000, where her Bloomsbury advance was $1,275 pounds. King's paperback rights went for $400,000, giving him a 50/50 split. These are examples of big houses, big deals and what it could me to you.


    Happy hunting.

    Go with the high advance option.

  3. #3
    The overwhelming majority of all first time authors never earn out of their advance. Get the most you can when you can. Of course, if your book doesn't perform well, the publisher will simply not buy any more books from you and that will be the end of your contract. The only way you're going to get a big advance is if you have a huge sales potential. As an unknown, you're going to be lucky to get much at all.

  4. #4
    I agree that it makes sense to go for the highest advance, but I'd disagree that there's a close relationship between earning out and the publisher making money.

    Big name authors like Stephen King get huge advances and often don't earn out, but the publisher still makes lots of money, because the advance isn't decided based on the break-even point for the publisher, it's based on the anticipated sales (and how much the publisher needs to pay to get the book).

    For example...

    Let's say we have two books. Both the same length, etc. Fixed costs for both (editing, marketing, etc.) are $20K. Gross sales per book is $3, minus royalties per book at $1. (These are obviously very generalized numbers just for the sake of an example).

    Book A gets an advance of $5K and sells 6K copies. Author gets $6K ($5K in advance, $1K after earn out). Publisher spends $20K in fixed costs, pays author $6K. $18K gross sales minus $26K = loss of $8K. Book earned out, but publisher lost money.

    Book B gets an advance of $500K and sells 400K copies. Author gets $500K (advance only). Publisher spends $20K on fixed costs, pays author $500K. Gross sales are $1.2M. Book didn't earn out, but publisher made lots of money.



    So, yes, bigger advances are good, but there's no real connection between earning out an advance and the publisher making a profit.

  5. #5
    Member Chris Stevenson's Avatar
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    Quote Originally Posted by Cephus View Post
    The overwhelming majority of all first time authors never earn out of their advance. Get the most you can when you can. Of course, if your book doesn't perform well, the publisher will simply not buy any more books from you and that will be the end of your contract. The only way you're going to get a big advance is if you have a huge sales potential. As an unknown, you're going to be lucky to get much at all.
    Um, yep. It's kind of a sad reality. Now when you don't earn out, it doesn't mean your publisher has lost money. It does mean you lost some standing.
    Blog: Guerilla Warfare For Writers:Hidden Content

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  6. #6
    Member Chris Stevenson's Avatar
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    Quote Originally Posted by Bayview View Post
    I agree that it makes sense to go for the highest advance, but I'd disagree that there's a close relationship between earning out and the publisher making money.

    Big name authors like Stephen King get huge advances and often don't earn out, but the publisher still makes lots of money, because the advance isn't decided based on the break-even point for the publisher, it's based on the anticipated sales (and how much the publisher needs to pay to get the book).

    For example...

    Let's say we have two books. Both the same length, etc. Fixed costs for both (editing, marketing, etc.) are $20K. Gross sales per book is $3, minus royalties per book at $1. (These are obviously very generalized numbers just for the sake of an example).

    Book A gets an advance of $5K and sells 6K copies. Author gets $6K ($5K in advance, $1K after earn out). Publisher spends $20K in fixed costs, pays author $6K. $18K gross sales minus $26K = loss of $8K. Book earned out, but publisher lost money.

    Book B gets an advance of $500K and sells 400K copies. Author gets $500K (advance only). Publisher spends $20K on fixed costs, pays author $500K. Gross sales are $1.2M. Book didn't earn out, but publisher made lots of money.



    So, yes, bigger advances are good, but there's no real connection between earning out an advance and the publisher making a profit.
    Bayview, I think you pointed that out more accurately than I did. I do agree. Not earning out doesn't mean the publisher did not make money. Name brand authors aside, I would say that debut authors with a total failure in sales might prompt a publisher to think twice about your next book. That goes without saying. If you have a good track record with previous books and all of sudden get a stinker, it doesn't mean you're going to be dropped or barred.

    Also consider this. I have a book that is miles away from earning out. I might never earn out. However, the publisher has no qualms about publishing me again. Know why? Because it's written in my contract that if a previous book doesn't earn out, the next book's sales/royalties will go toward the last advance until it's met, and then anything after that will be sent to me as regular royalties. Nice protective little clause, wot?
    Blog: Guerilla Warfare For Writers:Hidden Content

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    Christy's Young Adult Fabuliers: Hidden Content

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