It's written by an American editor at Tor, but even so I think the general points it makes may be relevant to the UK publishing industry too.

http://alg.livejournal.com/84032.html

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This, in particular, was sobering:

The author makes $4,697.28 in royalties. This means that she does not make back her advance. You may think this means she owes the publishing company $7802.72. You would be wrong! It's in the contract -- she doesn't have to pay that back. However, she can't get another book deal to save her life.

Interesting and somewhat frightening.

*Represses memory of it and gets back to writing*

Dan

Isn't it fascinating - though I think it's not always true that failing to earn out an advance is automatically a death blow - it depends by how much, and whether the book as a whole is seen as a success within the trade.

Emma

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It also sheds light on why editors don't take on promising-but-not-quite-there books too often in the hope that book number three will be brilliant - that's quite a loss to support meanwhile.

Emma

Sorry, Dan.

Emma - yes. Plus the editor writing the article goes on to say that such writers sometimes disappear for a few years, then come back under another name and do well.

It's fine roger - my writing skin is getting thicker by the day!

Dan

The skin on my business self is rhinocerous-like, wrapped around the shivering nakedness of my writer's self.

I hope she posts Part Two of her P&L, the book that does make money. We can all hope...

Emma

Head swirlingly interesting, ruthless, scary...
Thanks for posting... I think.

Derek

Thanks for posting, Roger. Sobering isn't it, when you're reminded that the publishing industry is a business. Something I think us creative types forget, perhaps even intentionally sometimes!

Nik.

You could regard these figures are comforting, in that a rejection need only mean, 'we don't think that we will probably be able to make these figures add up', not 'we don't like your work'.

As Grumpy Old Bookman says, not so long ago publishing people just couldn't do these sums routinely several times for each book, and had to go on hunches. I'd be interested to know if really experienced publishers' hunches in those days actually got roughly the same P&L results - I suspect they did.

What the figures also show is that contrary to how it appears from outside, publishers routinely expect some books to subsidise others - and betting on which will be which is where the hunches still come in.

Emma

I once had a manuscript rejected by an editor on the grounds that 'he didn't think he would be able to sell enough copies'. OK. Fair enough, was my reaction to that.

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I didn't realise that Grump had posted something on the same article.

Doesn't some of this suggest that a royalties-only (no advance) contract could be in the long-term interest of the first-book writer? Initially painful of course and unattractive to the agent who wants a quick cut but more of a motivation to the publisher making a borderline 'shall I do it' decision. Are such deals in use at all in the UK in fiction publishing? Most other types of business support a 'no sale, no fee' approach and, for example, it is only a minuscule minority of artists who get an advance from a gallery for picture.

Chris

Most other types of business support a 'no sale, no fee' approach and, for example, it is only a minuscule minority of artists who get an advance from a gallery for picture.

The analogy isn't quite accurate, in that a gallery acts more as an agent for an artist than a publisher, and take the commercial risk to spend exhibition-costs in the hope of a sale, just as literary agents do. They both wait for a connoisseur/publisher to produce actual money. And meanwhile the painting at least gets seen at the launch and in the gallery and catalogue, even if it doesn't sell. The problem with novels is that, effectively, we have no outlet except commercial publication.*

There is an argument that the importance of an advance is as much that it's an earnest of the publisher's intent to promote the book as anything else. If in the year or so between paying even a small advance and the book being launched the publisher gets cold feet about how many they're going to sell, it can be cheaper for them to kiss good bye to the £5 or £10 grand advance that they've paid, than to throw 'good' money after 'bad' in the attempt to sell a book that isn't going to do well. How much more true would that be if there was no advance? If they've put no money up front, what incentive would a publisher have to do even the minimum for a book that wasn't looking promising for sales, however promising in the literary sense?

The Macmillan New Writing model does try to change the habits of a publishing lifetime by paying no advance (with a high royalty to compensate). But it explicitly doesn't expect to make money, only to break even, and to hand the more successful authors over to Macmillan proper, on a conventional contract. It's a clever scheme, and one of its cost savings lies in being being able to promote all the titles at once. No one of those titles' marketing and PR budget could possibly have supported that much PR effort, but of course it's spread over six, with splendidly high-profile results, and later titles should benefit too.

Emma

*lets not get into the internet and self-publishing, just for the moment. They're different arguments, but if you want an interesting discussion of attitude of the trade of self-publishing, try this: http://www.slushpile.net/index.php/2006/04/21/why-people-hate-self-published-authors/

Emma - I'm not sure I agree about the galleries. I think they perform the same role for the artist as the publishers + booksellers do for the writer. However, on your main point, which is the role of the advance in forcing commitment from the publisher, I think you are absolutely right. You've exposed the weak point in my not-too-well-thought-out argument!

Chris

Chris, to be honest, I don't know much about the art trade, so I'm happy to be told I'm wrong. Thinking about it, the role of galleries does seem a bit like agent + publisher + bookseller, and obviously their financial risk is much greater than a literary agent's, who in principle needs only a photocopier and a phone.

An author's relationship with an agent is effectively 'no sale, no fee'. Only scam-merchant agents ask for fees from authors: reputable agents recoup their outlay solely from commission (and a few costs) on sales. Most agents I think have a tale of an author they absolutely loved, whose work never, in the end, sold. That costs the author nothing except heartbreak.

The publisher does pay up-front, and is the only part of the process that risks serious money in trying to sell an author's work. When we are frustrated by the way that publishers seem deaf to the appeal of aspiring writers' work, we should probably remember that.

The bookseller risks nothing except overhead, since (almost) all books are sold on sale-or-return. But the overhead on running a shop is not negligible.

Interesting. I'd never thought of it in those terms before, so thanks for prompting it!

Emma