Unfortunately, We Slept Through Econ

May 23rd, 2004 · No Comments
by Booksquare

All that macro/micro stuff…frankly, we didn’t care about supply and demand unless it affected our immediate needs. However, we know the author’s lot in life, well, sucks. Especially from a money perspective. We calculate the average hourly wage for a novelist at approximately three cents an hour. That’s factoring in overtime.

We also understand (more than the average soul) that after a book is sold, a publisher incurs lots of what they call hard costs. That’s a technical term for “actual money paid to someone.” This is why our jaw drops when we see outrageous advances paid for dubious projects. Because overpaying advances on one end of the scale seems to result in underpaying on the other. Or the inability of publishers to do things like promote mid-list authors. That sort of thing.

a little behind on our weekly PW print editions (yes, we know we can read them on the web, but sometimes we get busy with gossip columns and stuff), so we just got around to the May 3 issue. You know, the roundup of the PW confab (please, publishing industry, study Variety more closely…you have sufficient creative minds to develop a true “industry” vocabulary and, in the process, make your headlines more interesting). The following quote caught our attention:

    On the cost side, the greatest “point of pain” for publishers is unearned advances, [Kosmos] Kalliarekos said. He estimated that publishers write off $500 million in unearned advances annually. Authors most likely not to earn out their advances are those who receive $250,000 to $1 million up front. Publishers need to be disciplined when considering signing authors to contracts in that range, he said.

At the risk of writing something with meaning (which is not our purpose), we remind all involved that advances are paid against future earnings. We know (we really do — this is as close to a moral dilemma as we come) that advances pay the bills. We also know (again, we really do) that in publishing, no money is made until a book’s sales exceed its costs. Advances are, as hinted at by the term, money paid against future earnings. And, if Kalliarekos is correct and a certain range of advances fail to earn out on a regular basis, perhaps publishers should rethink their thought process.

It is our belief that reducing certain advances will have a positive impact on all authors (obviously there are some authors out there who have proven track records and don’t fall into this discussion). If the more modest advance is earned out in a timely manner, then perhaps a bump may be justified in the next contract. Until then, why not put more money into midlist and promotion?

File Under: Publishers and Editors · Square Pegs