Quote:
Originally Posted by darryl
Thanks for your comments. You are certainly closer to the industry than I am. However, it seems to me that not "earning out" is not synonymous with the publisher making a loss on the book. This is perhaps why agents try to negotiate an advance high enough that a book will never earn out. And also perhaps why publishers agree to this often enough that "the vast majority of books don't sell well enough to generate royalties",
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Whether not earning out is synonymous with taking a loss depends on how you look at the numbers. Most folks who think books are priced too high either don't read or don't understand publisher's financial statements.
Every book has a budget that includes all the costs involved in publishing it. The advance paid to the author is only one of the many costs, and likely not the highest one. How much of the cost the advance will be will depend on the author and the author's track record. I heard pretty believable claims a while back from someone in a position to know that
nobody made money publishing Stephen King. He was in a position to demand enough up front, and a high enough royalty rate, that what might have been profit for the publisher went to King. They published him for the prestige of doing do.
Agents trying to negotiate an advance that won't earn out is a rational response to a situation where the advance is usually all the author and agent will ever see. But that advance will
not be the reason the book won't generate royalties.
An old friend was an editor at a trade house that was a unit of a diversified entertainment and media corporation, in the days when there were perceived synergies in having all forms of content under one roof. He recounted getting a visit from a guy on the movie production side of the company who pointed at the mid-list titles and said "Why did you publish those? Why not publish just the best sellers?" The question to ask back in those cases is "Why did
you greenlight notable bombs A, B, and C, and instead just produce $100 million grosser D?"
The answer in both cases is that you have no idea what might become a hit until you offer it. You put it on the market and see what happens. You pray to $DEITY that enough of what you produce will be hits to cover your losses on what tanks. Sometime you lose the bet, and go out of business.
The problem publishing has faced for as long as I've been paying attention has been "Way too many books chasing too few readers". Back before the Internet Ate the World, and eBooks and self-publishing were even possible, I saw American Bookseller's Association stats saying that there were over 50,000 new traditionally published title releases in the US per year. That's a thousand new books a
week. Who would buy and read them all?
The answer is, they
weren't bought and read. The failed to reach an audience, died on the shelves, and got returned for credit. The advance was the only money the author would ever see.
Now we have self-publishing and indie-publishing, and it's more like a thousand new books a
day It's the same question above, with the same answer only more so.
The vast majority of books won't generate royalties because the vast majority of books won't
sell. There is too much competition. The size of the advance won't be a factor.
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Dennis