I thought I’d try my hand at a bit of a series on publishing that chronicles the thoughts behind us, Sandal Press. Of course, ymmv, but here’s our two cents for what it’s worth.
An advance is a sum of money that a publisher forwards to an author in lieu of future profits on a book that the publisher has contracted. I’ve read that the advance was originally supposed to cover living expenses for the author while s/he wrote the next novel but, for whatever reason, it’s money that the author gets in a number of installments and that is counted against future royalties.
Time was, the author used to usually get the advance in two installments: one-half upon contract signing and one-half upon publisher acceptance of the manuscript. Now, an author usually gets an advance in three installments: one-third upon signing the contract, one-third upon manuscript acceptance and one-third upon publication of the book. (Source: the wonderfully straight-speaking Kristine Kathryn Rusch)
This can stretch out the payment schedule from a matter of months to several years.
One reason we keep getting told this is happening is because traditional publishers are hurting in this current economic climate. Amazon is hurting publishers, ebooks are hurting publishers. We keep getting told that advances are low because there are just too many enemies lined up against traditional publishers. Even agents have shared this view on their blogs.
The problem is, that’s not true.
An article from the New York Times clearly points out that:
[I]n 2010 publishers generated net revenue of $27.9 billion, a 5.6 percent increase over 2008. Publishers sold 2.57 billion books in all formats in 2010, a 4.1 percent increase since 2008.
Ah, but that’s 2010, you say. Things changed in 2011. Yes they did. They got better. In fact, as Kiwi Martin Taylor says on his eReport blog:
Are publishers making windfall profits from ebooks? The recent round of financial results coming from major book publishers suggests they are but they are staying tight-lipped.
You can find out the exact figures if you subscribe to Publisher’s Marketplace, and anybody who does will find that 2011 was another year of profit for the major publishers. (A link goes behind the paywall, so I won’t cite it to reduce frustration.)
If you want to hear something even more blatant regarding advances, Ellen Archer, president of Hyperion Publishing (Walt Disney Company-ABC Television Group; not one of the Big Six but still a traditional player in the area of books) even says the following three things in the same interview with Digital Book World:
[On advances:] The one pattern that I have seen is that while there is still big money being thrown around for certain books, there is an awareness that we can’t continue to overpay. Advances are already lowering.
combined with the head-scratching:
We’ve been able to provide advances to authors and unfortunately most of those [advances] don’t drive revenue.
As for profits, however:
[On profits: from the question from Jeremy Greenfield, “You’re projecting big digital revenues for fiscal year 2012 and significant digital revenue growth all the way through 2015.”] Digital continues to take a bigger share of the pie.
Did you hear that? Giving advances to authors is “overpaying” for a product that “[doesn’t] drive revenue”. You know the other publishers are thinking the same thing.
So here’s what I’m thinking. Publishers are saying they’re hurting. Publishers aren’t really hurting. Publishers are using an economic climate that currently has smaller bearing on them than on, say, one of us, and is using that climate to (a) keep advances small, and (b) lengthen the time said advances are paid out. That is, if they’re not trying to stop the practice of advances completely.
Does that strike anyone as being basically…dishonest? Good business practice if you’re watching your bottom line, sure, but not exactly fair to all parties concerned. So this week’s question is, how comfortable are you doing business with someone who says they support authors but who are really only in it for the money?
(One last point. I’m not against people going into business for the money. I’ve done it. I just object when a business cloaks a mercantile interest with lofty statements that have nothing to do with their reality.)