What is profit sharing publishing?
So much of the conversation about how much authors are paid for their work is around advances. But we pursue a totally different business model. So we’re breaking down how advances work, what we’re doing differently and why…
Last year, L.L. McKinney got #publishingpaidme trending on twitter, urging authors of all races to disclose and compare their advances. This told us a lot of things, most glaringly that white writers are higher paid than black writers, so it was a really important conversation to get out there.
But however much that conversation revealed, it is also true that whenever we see public conversation about advances, it also distorts our idea of authors’ pay. Take a really high advance like £100,000. When we see that someone is paid that much, it looks a bit like life changing, jackpot money; money out of the blue and all of a sudden. But it takes anywhere from two to ten years (maybe more) to write a book so best case scenario you can break it down to a £50,000 a year salary, worst case £10,000 a year and that is for a top level advance that someone like Jesmyn Ward, right up there at the top, receives.
During the #publishingpaidme trend, it was horrible (though unsurprising) to see that black writers were being underpaid, but we were still seeing figures in the hundreds of thousands for the most famous names who took part in the online reveal regardless of race. And the fact is that the vast majority of writers who will get a conventional publishing contract won’t get anywhere near that kind of money. First time authors will often get no advance at all, or maybe something around the £5-10,000 mark if they’ve got some way of proving their work is really going to sell.
Probably a big reason why these public conversations focus so heavily on advances is because there really isn’t that much payment from traditional publishing after an advance. A typical royalty is 10% of the RRP on hardbacks and 7.5% on paperbacks: so, on a £16.99 hardback the author would receive around £1.70 for each copy sold and on an £8.99 paperback they would receive 67p. This royalty usually drops when retailers demand higher discounts. For instance, at a 52-55% retail discount (which is very normal for large retailers) the author gets four fifths the full royalties, with a further drop on sales at even higher discounts. If you’re getting your full 67p you’d need to sell about 30,000 copies to make £20,000 (around about a living wage), but if you’re actually making 4/5 of that or less, the final figure will be much lower. And with so much buzz, and respect, around so many authors' work, it’s easy to imagine that 30,000+ copies is a reasonable number to aim for. But sales tend to be lower than you’d think.
A few years ago, there was some media fuss over the realisation that even Man Booker finalist books didn’t reach a high number of sales. A Brief History of Seven Killings by Marlon James, for example, and A Little Life by Hanya Yanagihara had sales between 15,000 and 20,000 when they were nominated. Tom McCarthy's Satin Island sold 3,600 copies.
Nigerian writer Chigozie Obioma's debut novel, The Fishermen, which was written about a lot, sold just under 3,000 copies. As their critical acclaim proves, these figures don’t show books doing badly. It just goes to give some indication of the book buying market and the kind of sales that even ambitious authors might get.
"A sensational sale would be about 25,000 copies," says literary agent Jane Dystel who has been a well known name in the game since the ‘80s. But well under 5,000 is the overwhelming norm even for a good book.
This is where the profit-sharing model comes into its own. An author earning 70% of the profit from 5,000 books retailing at £8.99 is in a very different position to someone who got no advance and moved straight to 7 or even 7.5% royalties of heavilty discounted retail prices.
Add to that a boycott of retailers like Amazon that are well known for pricing down books thereby driving publisher and author payments down and the margin is much healthier even at realistic levels of sales.
There is so much glamour attached to the offer of an advance, but the result for the vast majority of writers is far from glamorous with that business model being one of the reasons that most authors end up paid less than minimum wage. If you can command millions of sales and six figure advances, the model can certainly work well for you, but it’s important not to be blinded by the lights and to understand how you can get the best out of the book market.
The business model that a publishing company follows has greater knock on effects than those felt in the wallet of the authors. An advance is a gamble. The structure of offering advances and low royalties, alongside courting the lowballing sellers like Amazon, means that publishers cannot take a risk on a new voice that might not immediately be a blockbuster even if it might be really important for a particular community of readers and really popular with engaged readers. They have to crowd-please because their model relies on quantity. Something has to happen to refocus our attention on quality and trying to create a meaningful audience over time.
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For more on authors’ pay click here.