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September 14, 2004

Why A Shitty Deal is a Shitty Deal

A small press publisher named Jeremy Lassen, who is clearly not getting enough hugs, took exception to the Real World Book Deals definition of a $3,000 book advance as "shitty," and responded with a comment which I'll elevate here for you to admire as much for the spirited use of profanity as the content itself. In it, Lassen also tries to suggest that authors really don't want a $20K advance, or above. Follow the logic, such as it is:

$3000 advance = the expectation of selling at least 1,200 copies of a $27 hardcover at 10% royalty.

That's 2,400 copies of a trade paperback at $13.50

For a small publisher with a first time author's fiction book, those are pretty respectable numbers. Shitty deal my ass. Particularly if you still have a piece of paperback or foreign language, or British rights.

A $20,000 advance = "not bad?" Fuck that. A $20,000 advance could mean the end of your fucking career. If you don't sell 7,500 copies of your book in hardcover, or 15,000 of your book in trade paperback, you didn't earn out. If you don't earn out, chances are your publisher just lost money on your ass, and your editor is getting heat from above. Chances are that editor is telling everybody in town what a bad investment you were...

Now if that had been a $5000 advance, and you sold half that --- 3,200 copies, you book would have earned out and made a bit of money, and would have been a good investment, and would probably get another contract.

If you actually sold 7,500 copies after a $5,000 advance, you would have been a long shot that paid off big. Your editor would look like a genius, and you might get a 2 book deal, and... AND YOU WOULD HAVE STILL ENDED UP EARNING $2OK on the first book, after royalties were paid.

Lets be realistic people. If your book sells, you get paid. If your book doesn't sell, and you still got a big fat advance up front, chances are you won't ever get a contract with that publisher again. If you think you can sell more copies then your publisher thinks they can, don't sell it to them, or self publish it, if there's so much demand.

Fucking unrealistic expectations are part of the problem in this industry. Arbitrary lists like this perpetuate this shit. Its more important to understand the economics of your trade (advances, royalties, trade discounts, distributor discounts, returns, Pay-for-placement in chains, etc etc), rather then memorizing some arbitrary range of "advances" and weather it was a good deal or not.

The problem is most writers don't know shit about the business they are in. and assfucks like Publishers Lunch don't seem to be interested in helping them learn anything about it.

Aside from the clear contempt Lassen has for writers, whom he apparently assumes are too stupid/ignorant to follow basic publishing economics, Lassen misses two critical points about the Real World Publishing Deal list:

1. It's primarily supposed to be funny and satirical (although as with most funny and/or satirical things, there's a small bit of truth to it). For the purposes of my little essay here, however, let's go ahead and treat it seriously.

2. It's a list from the perspective of the writer, not the perspective of the publisher -- as befits its creation by a bunch of writers hanging around at a bar. And here's a fact, for writers and publishers both: When the cost of your bar tab from a night of carousing with other writers is an integral percentage of your book advance, that's a pretty shitty advance, no matter how you slice it.

Likewise, if Lassen doesn't think $3,000 is a shitty deal for writing a book, he's welcome to try to live off it. I doubt he'll get a good Internet connection from an underpass.

To be clear, the "shitty" aspect of tiny advances as described in or little list relates to one thing: The raw amount of money involved. The small press publisher who offers you $3,000 or less for your book may sincerely be offering the most amount of money he or she can offer; likewise, a writer may be eminently pleased to take that dinky sum for a number of reasons. Money is not the only thing involved in a book deal.

Be that as it may, here and now, in the year 2004, $3K is a shitty amount of money. It's shitty in exchange for the amount of labor involved in writing a book, and it's shitty in the real world of paying rent, buying groceries and keeping the lights on. $3K is a nickel a word (or less, if you write more than 60,000 words). If you live in New York City or San Francisco and don't have rent control, $3K is a writer's monthly "nut" -- i.e., your cost of living (note to writers: Get the hell out of NYC and SF).

Lassen's exhortations of paltry book economics aside, no author wants to make $3,000 or less from their work. It's "I won't bring up what I was paid to the parents who wanted me to be an accountant" money. It's "I'll never be able to give up my day job" money. It's "I'm glad I've got a tolerant partner" money. An author may take $3K (or less) for an advance, and may even be happy with the deal -- but dollars to donuts they're not actually happy with the raw money. And why should they be? To repeat: it's a shitty amount of money.

(Let's not also fall for Lassen's intimation that authors will make more money on the backend through royalties; most books don't earn out, even the ones with the small advances. And unless the book in question is a wild success, the royalty money will be hella slow in coming -- it can be years before authors see a royalty statement. One of the best pieces of advice I can give to an author is to think of your advance as all the money you will ever get for your book. It keeps you from the credit card mentality of "I'll do 'X' when 'Y' money comes in." And it makes the royalty money you do get even more pleasant.)

Lassen's frantic handwaving about how a $20K advance could torpedo your career, incidentally, is a load of crap. He's doing what he accuses us writers of doing, which is plucking a more or less arbitrary number out of the air and declaring it good or bad. As it happens, I got a $20,000 advance for my very first book (The Rough Guide to Money Online). I've gotten contracts for six books since then -- some whose advances are more, some that are less. In my case, $20,000 was a perfectly reasonable amount for an advance. For some people $20K will be too much; for others, not near enough.

And in fact, the story of Money Online is a fine example of how both publishers and authors view advances. At the time I was contracted to write Money Online, Rough Guide's Internet guide had sold hugely -- more than a million copies -- and from what I was told, the company was expecting pretty large sales of Money Online as well. Because of that, the $20K advance the company extended was viewed as a safe -- nay, cheap! -- bet. But as it happened, the book came out in November of 2000, i.e., just in time for the popping of the Internet bubble. The book's sales were in the thousands, not the hundreds of thousands, and I didn't earn out my advance. It was bad timing.

Yet my second book sale was to Rough Guides as well -- The Rough Guide to the Universe. Why did RG go with me again, even though my first book was a clear financial disappointment? Well, for a number of reasons, I imagine. First and not insignificantly, the number of books an author needs to sell to earn out an advance and the number of books a publisher needs to sell to turn a profit (or at least avoid a loss) are not the same number, which is a point of fact Lassen doesn't bother to point out (but then, why would he). It's my understanding that RG didn't actually lose any money on the book. So that's good. Second, despite the first book's failure to thrive in the marketplace, the folks at RG liked the book's content and liked me as a writer; they were not shy about working with me again. Third, the Universe book filled a hole in their offerings. So there it was.

As it happens, the advance RG offered for Universe was less than for Money Online. I didn't squawk -- the step down was not huge, and in light of the Money Online sales, not at all unreasonable. Also, I really wanted to write a book on astronomy. Everyone was happy with the deal. Universe sold well and was reviewed well; now I'm writing another book for Rough Guides, and the money involved has gone up.

Point here, to borrow from William Goldman: Nobody knows anything. Great books can fail, bad books can thrive; your advance money may seem like a bargain to your publisher today but arterial flow tomorrow, or vice versa; the small press publisher who offer you $1,500 for your book and then takes a bath on it may never work with you again; the large publisher who offers up $150,000 for another book may chuckle quietly into his bourbon about how he got the book for silly cheap. The idea that a writer should be content with a paltry advance, however, is a load of crap; the advance a writer should be content with is the one that is the happy medium between what the writer thinks he or she is worth and what the publisher think it can sell. Any other advance is someone screwing someone else.

This much is true: The economics of publishing from the point of view of the writer and the point of view of the publisher are related but they are not the same. The publisher looks at the economics of publishing from the point of view of needing to create and market product; the writer looks from the point of view of eating. To some extent the publisher's costs are fungible -- how many books to print, where to advertise, whether to fund a book tour and so on. The writer's costs, on the other hand, are fungible across a much smaller range (a gallon of milk costs about the same wherever you go). A publisher's view of economics is institutional; the writer's, personal.

Lassen suggests, in a rather obnoxious fashion, that writers need a dose of reality when it comes to publishing economics. The subtext message in his bloviation is clear: The only legitimate point of view for the economics of publishing is that of the publisher. This is of course entirely wrong. We writers are not ignorant of the economics of publishing; we are, if anything, only too well acquainted with them. Our point of view matters and is indeed singularly relevant, since without writers, publishing has a real supply problem.

This is why a gaggle of writers, only slightly in their cups, unanimously declared certain deals "Shitty," "Contemptible." "Meh," and so on. From our point of view, that's a fair referent for the money involved and what it can do for us. I can buy shit for $1,000, so a $1,000 deal is pretty shitty. I can pay my mortgage for a year on $20,000. That's not bad. And the day I get a deal worth $100,000 or more, I'm definitely buying the next round. Really, I don't know how much clearer this can be.

It's probably that Lassen doesn't like the amount of money he can (or is willing to) offer as an advance referred to as "shitty." Well, I can sympathize, but only up to a point. If the economics of publishing are such that shitty or contemptible pay is what writers can hope to expect, then there's no point pretending otherwise. At the very least, everyone who wants to be a writer will know what they're getting themselves into.

Posted by john at September 14, 2004 09:20 AM

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Comments

Patrick Nielsen Hayden | September 14, 2004 12:01 PM

This is all amazingly sensible, particularly where you point out that:

(1) Under some circumstances, a book can fail to "earn out" and still make money, and

(2) "The economics of publishing from the point of view of the writer and the point of view of the publisher are related but they are not the same."

These two points are just subtle enough that they tend to fall out of many people's brains at the slightest provocation.

John Scalzi | September 14, 2004 12:09 PM

Well, and that's why it's worth trying to hammer them back in from time to time.

Elizabeth Bear | September 14, 2004 12:26 PM

This is the kind of stuff that keeps me linking you. Over and over and over again.

Michelle Sagara | September 14, 2004 12:58 PM

Whose brains are being hammered?

John Scalzi | September 14, 2004 01:10 PM

Certainly not yours!

Burns! | September 14, 2004 01:42 PM

Not being in either end of the publishing business myself, this was more just interesting amusement for me. I did note one thing, though: assuming that you cut/pasted Lassen's comments verbatim, I think it may be important for someone in the business of words to understand the difference between "then" and "than."

That just drives be f'ing crazy.

John Scalzi | September 14, 2004 01:45 PM

Heh. Well, gievn the number of stupid grammar errors I make on the Whatever, I'm not about to start picking someone apart on those grounds.

Jim Winter | September 14, 2004 02:38 PM

Let's get something straight.

I got a shitty deal. I knew it was a shitty deal. My publisher said, "Now, you do realize this is a shitty deal." A friend of mine who also took a shitty deal reminds me every two or three months that I have a shitty deal.

Nothing wrong with that. If I did not take a shitty deal, I'd have no deal at all. Not even contemptible. Now I have an agent because I took the shitty deal and a way onto Borders' bookshelves as a direct result of this shitty deal. So, to paraphrase Tommy Chong, this is some good shitty. If this is what it takes for me to get the next round later on, I am more than happy to sit in the portajohn of publishing for a couple of years.

Having said that, I thought John's post was hysterical and plan to take up the topic in a corner booth of the bar at Bouchercon where I can blog something equally witty from a bunch of drunken, cynical crime fic writers.

Now, next on the agenda, let us teach Mr. Lassen the meaning of this word I like to call "satire"...

Naomi Novik | September 14, 2004 05:04 PM

We-elll. To be fair, you're talking nonfiction there about the Rough Guides, and from what (very little) I know, nonfiction is a whole different ballgame. For one thing, it's more obvious for a publisher to look at the numbers and say, "Ah, sales of internet books have just dried up across the board, it's not the author." That doesn't seem as likely in fiction, where the categories aren't so well defined. ("Sales of books featuring cats have dried up across the board! We should give the author another chance, maybe with spaceships." Hmm.)

Which isn't to say I disagree with you on the definition of a shitty deal (or the other categories of Real World Book Deals, which btw v. funny). I also suspect that selling 3200 copies at a $5K advance is not exactly the recipe for long-term success and repeated book contracts that Lassen suggests. Sure, the book might have been narrowly profitable, but in terms of absolute money and moving books, not so much. The author might get another shot, but seems to me just as likely the publisher will eventually dump the author and try and find someone else who will sell the 7500 copies. Sic transit gloria midlist.

Andrew Wade | September 14, 2004 05:13 PM

Scalzi wrote:
(Let's not also fall for Lassen's intimation that authors will make more money on the backend through royalties; most books don't earn out, even the ones with the small advances.

Heh, clearly a book not earning out is going to be an accepted part of the business and not cause for the publisher to get uptight. It could still be bad news for the writer if publishers are looking only for the writers that will earn out, and if a writer not earning out is a good predictor of the writer never earning out. I'm not in the business, but the way I hear it neither of these is true.

Scalzi continues:
And unless the book in question is a wild success, the royalty money will be hella slow in coming -- it can be years before authors see a royalty statement.

Sounds like insurance: the writer gets a predictable amount of money for the book, and the publisher assumes a bit more of the risk. I assume publishers are in the best place to predict how well a book is going to do, and can afford advances on books that do poorly. So they are the natural entities to offer such insurance.
I don't doubt that advances don't come free; I'd expect that writers whose books do (much?) better than expected don't get as much as they would otherwise get.

John Scalzi | September 14, 2004 05:36 PM

Naomi Novik wrote:

"We-elll. To be fair, you're talking nonfiction there about the Rough Guides, and from what (very little) I know, nonfiction is a whole different ballgame. For one thing, it's more obvious for a publisher to look at the numbers and say, 'Ah, sales of internet books have just dried up across the board, it's not the author.' That doesn't seem as likely in fiction, where the categories aren't so well defined."

Possibly, but I'm not entirely convinced. There's a lot of fiction out there which is easily categorized, and indeed finely categorized, and a lot of non-fiction that is cross-category (as I myself found out the first few times I pitched a non-fiction book, only to have publishers reject it by saying "It's an interesting idea, but we don't know where to put it."). So I don't know if the schism between fiction and non-fiction is as pronounced as you may think. In my experience with both, the machinery of the process is more similar than not.

It *is* my experience that non-fiction advances are better (at least initially) than fiction advances, and I wouldn't be terribly surprised if that's the way it is on average.

Scott Westerfeld | September 14, 2004 07:08 PM

As one of those who was there on the contemptibly drunken night in question, I am amazed how many of the small-advances-are-good crew keep missing one point:

When you get a big advance, the publisher spends more money pushing your book! (In for a penny, in for a pound.)

A few nights ago, I was drinking with a certain publisher who was complaining about the trouble she was having getting her marketing dept. to push a certain great book. They were focusing all their efforts on another title, not because they thought it was great, but because its acquiring editor had paid half a million for it. They had a stake in it, in other words. They were dead meat of they didn't justify that insane advance.

Now, I'm sure this little drama plays itself out at many levels, not just in the exhaulted $500K sphere. When publishers take a real risk with an author, they are more likely to expend the effort to follow up that risk. What's personal to you becomes personal to them.

And what if your big-advance book fails? Well, everyone can look up the approximate numbers sold on Bookscan, but not everyone will know of your ridiculous advance. So what's the bottom line of such a "failure"? You'll be richer, you'll have sold more copies (because of more intense marketing), and _someone else_ will use their job, and that only maybe.

You can always change your damn name.

Justine Larbalestier | September 14, 2004 07:16 PM

Bravo, Mr Scalzi. Well, said. We've stirred up a controversy. Yay us!

As another drunken sot on that night I'd like to reiterate teetotaller Scalzi's opening point:

We were *mocking* Publishers Lunch on account of the ludicrous broadness of its money scale. None of us had ever got within cooee of the upper end of their lowest category. How on earth is a zero advance the same as a hundred grand advance? That's just silly.

The best result of our more fine-tuned and honest categories was that we all started fessing up about our advances. That's a very good thing. Writers need to know what other writers are getting.

Michelle Sagara | September 14, 2004 07:23 PM

An oar: In my limited experience of it, non-fiction advances are higher, partly because for non-fiction, the editors are looking for people with expertise -- and people with expertise are usually already getting paid a decent sum to talk about or do whatever it is the publisher wants them to write about. It's why 35K can be peanuts to a non-fiction person who somehow expects that s/he'll be paid enough to live on.

Scott | September 14, 2004 08:48 PM

It's strange, when Lassen started on the "advance v royalty" thing, I thought I was hearing Courtney Love. But instead it just highlit my ignorance about the difference between publishing books and music.

It seems that most musicians have to PAY BACK, and/or OWE IN CONTRACT the difference between their advances and their royalties. Which is very harsh. And leads to a lesson somewhat like, "Take the absolutely smallest advance you possibly can and survive to make the album."

However, I think the key thing between Lassen and Scalzi here is that Lassen thinks that "shitty deal" means that the publisher is SCREWING the writer, where Scalzi thinks that "shitty deal" means that the writer is missing some _thing_ in the publishing world which will make his book worth more than $3000 and that lack, or sudden comprehension of that fact is "shitty".

Or something.

John Scalzi | September 14, 2004 08:59 PM

Scott says:

"However, I think the key thing between Lassen and Scalzi here is that Lassen thinks that 'shitty deal' means that the publisher is SCREWING the writer, where Scalzi thinks that 'shitty deal' means that the writer is missing some _thing_ in the publishing world which will make his book worth more than $3000 and that lack, or sudden comprehension of that fact is 'shitty'."

Huh?

I think a $3,000 book advance is a shitty advance because it's a tiny amount of money. End of story.

Michelle Sagara | September 14, 2004 09:15 PM

While I think Mr. Lassen's language (if I'm spelling his name correctly) and sentiments are a tad on the harsh side, I like the books his press produces, and given that the majority of the ones I saw were short story collections, it's rare for an author to see more than the heirarchical shitty deal for those. (Rare. I said Rare. Not unheard of).

Collections have a niche readership, but in my admittedly subjective experience a majority of novel readers don't want to read short story collections, even if they otherwise buy every novel the author writes. Doing the hardcovers gives one a reasonable shot at library sales, and the readers who are interested in the author's shorter works, and as it's the kind of thing a major publisher is almost unwilling to touch (I say "almost" because I really don't need to have the exceptions pointed out) it's a perfect fit.

And, given that you've already been paid for most of the shorts, if Night Shade or any other small press is paying you more than the 1 cent a word that is not uncommon in reprints, it's almost found money. And the books -- did I mention? -- look nice.

John Scalzi | September 14, 2004 09:29 PM

Michelle Sagara writes:

"While I think Mr. Lassen's language (if I'm spelling his name correctly) and sentiments are a tad on the harsh side, I like the books his press produces..."

Heh. Well, to be clear, my snarking on Lassen is neither here nor there regarding his press. I visited the press' site briefly but otherwise know very little about his business.

Michelle Sagara | September 14, 2004 09:40 PM

Well, this would be the thing with snark -- it's riotously funny, except when it pinches the single nerve left. Okay, at that point it's still riotously funny, but only for those of us in the peanut gallery.

And I admit, having heard the "why hasn't Publisher X made me Robert Jordan yet, damn them?" from countless people whose books are in no way alike, I can sort of understand the hair-pulling.

tam | September 14, 2004 09:54 PM

Isn't there a limit to the negotiation process with publishers? Big advance, less maneuvering room with rights and such? Royalty percentages? Accounting schedules? Other cobtract particulars? I truly think there's more to a publishing contract than the cash up front.

And what about a book with a "meh" advance that actually gets decent marketing? Building a career with legs? Looking long term instead of just gimme the money now!

Maybe I'm a naive git, but it's not so simple.

Is it?

Michelle Sagara | September 14, 2004 11:19 PM

John & tam, do you mind if I field this one elsewhere? I'm almost at the point where I'm willing to just grab a random book contract and type it all in, clause by screamingly hideous clause. With notes, even.

John Scalzi | September 14, 2004 11:25 PM

By all means, Michelle, field away!

Michelle Sagara | September 15, 2004 12:40 AM

Done, or half done. I think clicking on my name will take you there.

Julia Antoni | September 19, 2004 01:52 PM

Say, a first-time author received a $70,000 advance for his novel about a man who wears ochre-colored scarves, eats fried bulgur, and writes 15,000 page novels about the process of human digestion (from the point of view of the small intestine). Scrap this.

My real question is how realistic is it that a first-time author will "earn out" a $70,000 advance, in your opinion, Scalzi?

John Scalzi | September 19, 2004 02:16 PM

Julia Antoni asks:

"My real question is how realistic is it that a first-time author will 'earn out' a $70,000 advance, in your opinion, Scalzi?"

Not very. Were I an acquiring editor, I would *very* wary to give that sort of money to anyone. On the other hand, you never can tell. There have been immensely successful first novels, and as others have noted here, the more money a publisher throws at a novel, the more it is obliged to get that significant sum of money back.

Michelle Sagara | September 20, 2004 08:06 PM

I feel compelled to point out that while it's true a publisher will have to recoup the expense of that advance, they don't seem to be spending money that they don't feel they can reliably recoup in genre (SF/F) these days. At the height of the boom (or what I refer to fondly as the Aronica/Silbersack days), they could or did -- but they really don't seem to do that now.

So while it's unlikely that first time author will earn out a 70K advance, it's much more likely that the publisher will still make money than it was 10 years ago, imho, if they do choose to offer that sum.

Madeline F | November 30, 2005 08:19 PM

As time has moved on, the link Michelle Sagara posted to her LiveJournal where she typed out her first-book contract takes you to her recent entries, not those of September 04... So here is the link to the first of her contract entries, so far as I can tell, with many more following:

http://www.livejournal.com/users/msagara/16534.html

I'm looking forward to reading it all!

Writingguy | February 20, 2006 12:14 AM

Here's what's unrealistic: publishers expecting writers to write for nothing, publishers expecting writers to put three years into a novel for a measly $3K advance; crap like that.

To make matters worse, lots of publishers expect writers to promote their own books, leaving the publisher with little more responsibility than that of a printer. Really, what is the difference between a publisher and a printer these days? Why should a publisher rake in 95% of the proceeds for book sales when true printers want only half or even less?

Here's the breakdown:

Writes the book: writer
Promotes the book: writer
Edits the book: writer
Prints the book: publisher
Pockets 90%+ of the earnings from the book: publisher

It is time for writers to cease this groveling and simply say no to the scraps publishers toss to them. STOP WRITING FOR FREE, STOP BEING DESPERATE. Must writers form a frickin' union?

Ever wonder why good fiction is so hard to find these days? Maybe because you get what you pay for.

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