Time for another glimpse into the behind-the-scenes of publishing! Our question this week is: “I’ve always been curious, do authors really get advances before their books are written, or is it more of a royalty type payment after the book releases?”
(If you’re wondering about some of those terms, no worries, I’ll define them. Don’t even get me started on all of the acronyms involved in publishing. I was joking about all the lingo with a new author and then sent her an email saying, “Just checking on whether you have all the PAFs from the RaT dept so we can put the info in Hot Potato for the MM mailing.” And she panicked for a quick second before realizing that I was just teasing her with a string of terms we throw around at Bethany House.)
At Bethany House, as a traditional publisher, we pay authors an advance—an amount paid to the author, agreed on by both parties in signing the contract, that arrives in advance (clever names are not our forte) of the book’s publication. Often, it comes in different installments: for example, 1/3 on signing the contract, 1/3 upon delivery of an acceptable rough draft*, and 1/3 when the book is published. The specifics of that distribution will be different from house to house, and even book to book.
(*”acceptable” meaning, “Great, let’s go through several rounds of edits and get it ready to publish in 10-12 months,” rather than, “Hold on, you turned in 50 pages plus some notes scribbled on the back of a napkin,” or “Wait, this is an epic space graphic novel instead of the historical romance you agreed to.”)
That advance money lets the author cash a check right away as they work on the book. Sometimes the contract is for multiple books, so the author could get part of the advance payment up to several years before the actual book-writing is finished!
Royalties are something else altogether. An author’s contract with a traditional publisher like Bethany House also specifies the amount of the profit of a book the author will be paid, and how much goes to the publisher to pay for printing/distribution expenses, and the salaries of everyone involved in working on the book (editors, marketing, sales, designers, rights, etc.).
But the publisher only starts to cut those royalty checks once the author has earned more than the advance that the publisher already paid. Put another way, royalty payments kick in once sales go above and beyond the advance, as seen in the carefully calculated (and boring) statements sent to authors on a regular basis so they can keep track of all of this. That’s called “earning out,” and it’s a great thing.
But wait, there’s more! (Don’t worry, the math only gets so complicated. We’re book people; advanced math is not our thing.) If a book sells over a certain number of copies, say, over 25,000, they might start to earn a higher percentage of the profit in royalties. And so on with other sales tiers, all specified in the contract. That way, if a book sells above and beyond what we expected, the author benefits from that even more.
As well, the royalty rate the author gains from ebook sales is usually higher than the percentage for print sales. (Because, while you still have to pay editors and such from ebook profit, you don’t have the added expense of printing a physical book.)
Authors also get a percentage of the profit from license deals our rights team strike for things like translations, audiobooks, or other formats.
As to how all of the numbers and terms are decided on, an author and their literary agent (if they have one) will work with our publishing team, especially the acquisition editor, to agree on a final contract.
But, in the end, the simple answer to how authors get paid is that authors have thousands of patrons supporting their work: readers like you! Whether you’re buying their book outright, requesting that your library buy it, or recommending it to others, you’re helping to support authors in their storytelling career (and us in our publishing careers, too).
I hope you enjoyed this little glimpse into the nitty-gritty of our world, especially if you’re an aspiring author wondering how all of this works.
Did you learn anything new, readers? Or do you have any guesses about the obscure abbreviations I used?