Self-employed in publishing

Is a royalty-only system the way forward for author payment?

Jasmin Kirkbride is BookMachine’s new blogger. Jasmin is the Editorial Intern at Tenebris Books. She is a freelance editor and published author.  You can find her on Twitter @jasminkirkbride. Last year, The 2014 Digital Book World and Writer’s Digest Author Survey revealed that of the traditionally published authors who took part in the survey, 59.3% earned less than £600 per year. A report from the Authors’ Licensing & Collection Society (ACLS), What Are Words Worth Now?, furthered that average author earnings were below £11,000 per year, down almost £3,500 from the previous report in 2005. Not enough to live on and well below the minimum wage. The debate over how we pay our authors was hot all year, and it looks not less important as we enter 2015. Clearly, many authors are not making enough money to live on, but is this because we’re paying them unfairly or because their content isn’t selling? How authors traditionally get paid Authors generally receive payments for their books via a forward, with royalties thereafter. The forward is a lump sum paid to the author by the publisher when the book is first purchased. The author’s royalties are then taken by the publisher and kept until such time as the author has effectively paid back their forward. It is only at this point that they begin to receive royalties. This is termed ‘earn out’. Most authors, however, will never achieve ‘earn out’. The majority of books purchased by publishers do not return the initial investment of the forward. Publishers rely on the big sellers, those one in a thousand books whose profits exceed their forward and can make up for all the titles that didn’t. So we can see why the figures from the studies above might seem misleading: it is expected that most of the books out there wouldn’t make enough to support their author, which would bring all average author incomes down. Problems with forwards Though some say that paying authors is basically ‘charity’, they inescapably provide the raw materials our industry needs and without that, we have nothing to sell. The question is whether we are paying them fairly, and whether this is possible whilst continuing to be a profitable as an industry. Pragmatically, simply, a book is valued in terms of its sales. If a book earns more for the publisher, the author should be rewarded higher than those whose books do not sell as well. Under the current system, this is not strictly the case. Authors whose books are successful earn less than they might if they were not accounting for all the books that don’t turn a profit. Meanwhile, the authors whose books don’t turn a profit have made more money than they should have done. In this respect, paying authors by a royalty-only system would be fairest. What about literary value? Of course, there are issues with a royalty-only system: it would annihilate the titles we publish for love instead of sales. This is just one idea of many. At the end of the day, we will likely see a whole plethora of different payment methods emerge, some of which will work and others of which won’t. What is clear is that not the debate has opened change, though slow, is inevitable.

author payment, literary value, royalties

Comments (6)

  • good debate to get going; very true too that authors ‘inescapably provide the raw materials our industry needs and without that, we [publishers] have nothing to sell. As a self-publishing provider the client (author) pays me to deliver a fully formed book – an even worse scenario than royalties you might say, except a) they get the book professionally published to their satisfaction (no waitIng for endless committees’ accountants number crunching etc; they have their ‘calling card’/kudos which is often why they self-publish, and perhaps a gem of a book that never made it through the slush pile that might now get picked up, and possibly they might break even on sales of the book (which is 100% theirs) less wholesale/retail/online discounts (and original production fee). At least my authors go in with their eyes open and know they must keep the day job too (hack writing, blogging, barrista-ing, whatever..) Of course there are also now many micro- and group- funding options available too.

    • Yes, absolutely. I think author payment is naturally going to look very different in trad and self publishing for reasons like this – and that’s a good thing. Payment systems should be able to grow and develop in ways which make the respective businesses most competitive and productive, and therefore producing the best material they can. Diversity is a great thing!

  • “It would annihilate the titles we publish for love instead of sales”.

    Sorry if this sound cynical, but do publishers still really publish some books just for “love” or for their “literary value”?… And if they do, should they still be called publishers, or “patrons”?

    In any case, as an entrepreneur, I think the current advance model is unsustainable. It made sense when authors couldn’t publish without a publisher. Now, not so much…

    • I really liked your blog post (http://blog.reedsy.com/post/93866473344/authorpreneurs-and-vc-publishers), and completely agree with you. Though I think booksellers’ opinions on indie publishing will inevitably change, and I’m interested to see what publishers do then.

      It’s also true I think that publishers are very rarely able to publish books for the love of it anymore – and even if they were, the midlist/newbie authors would not be able to live on the forwards they are getting. This is a really interesting issue though: there’s a lot of idealism which goes on in the industry about publishers being ‘the guardians of culture’. Well maybe we were once but we sure aren’t anymore! There is significantly less concern over quality and literary value: we sell what sells and we do that very well. Publishers could be great businesspeople if they actually owned up to that.

      But it’s hard to admit, because as soon as you say ‘yes, we’re big business’ you have to begin treating the whole system differently. You cannot reward books which don’t sell, you have to own up to the fact that you’re middlemen in an industry that increasingly finds ways around you and therefore you have to respect the people giving you your raw materials. Pay them what they are worth based on the value they add to your company.

      Admitting this also means that we’d all have to up our game as publishers, prove over and over again our worth in terms of editing, marketing, publicity, salesmanship. Without the lure of a forward we’d actually have to sell every author’s book! And that’s a bit scary!

      • “Publishers could be great businesspeople if they actually owned up to that.”

        And agents. They’re incredibly good at signing those celebrities that are then going to sell their book just because they have a platform. We’re already seeing some “celebrities” (especially the tech-savvy and entrepreneurial ones) going through the self-publishing route themselves, and we’ll see more and more of that in the future.

        If what allows publishers and agents (basically, middlemen, as you say) to turn profit after profit is books from authors who don’t actually need the publisher to sell well, it’s just a matter of time before everyone realises it… Time and standardisation/simplification of the self-publishing process (what Reedsy is going for).

        And then what? Publishers will have to turn into either “VCs”, taking bets on unknown authors, or patrons. Anyhow, that’s just my vision, and I could be totally wrong, as it’s very difficult to predict what will happen in this fascinating industry!

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